Bookkeeping Business Plan PDF Checklist for Starting a Bookkeeping Business
Bookkeeping Business Plan PDF Checklist for Starting a Bookkeeping Business

This will make your business appear more professional and maintain your privacy. This step is important because it establishes your business as legitimate and may help to limit your personal liability if your company is ever sued. Whether you’re doing this part-time or full-time, you don’t want to skip this step. If you’re not a CPA and want to prepare tax returns, I recommend becoming an Enrolled Agent (EA) through the IRS. EAs must initially pass an examination and then complete annual continuing education to renew their certification every three years. While no formal education or classes are required, the examinations are difficult and will prove you have the knowledge to serve tax clients properly.

  • As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business.
  • You should plan on paying for help with online advertising, web design, search engine optimization (SEO), and website content management.
  • QuickBooks’ ProAdvisor program, on the other hand, is designed specifically for bookkeepers and accountants.

And while there are certain state-by-state exceptions about what can and cannot be undertaken by a CPA, they are not a requirement for starting an accounting firm. If you’re specifically interested in working as a bookkeeper remotely, establishing a website and social media profiles may be a starting point for your marketing plan. Both can make it easier for potential clients to find you in online searches.

Type your email below to get our comprehensive 69-point checklist to start your bookkeeping business. After establishing the purpose of your accounting business, you’ll need to establish early on in your first year exactly what your ideal client profile looks like. Now that you have your business plan sample donor survey questions for nonprofits in hand and all the paperwork and legal matters finalized, there are a few more things you need to do to make sure you’re prepared to begin bookkeeping. For a more detailed guide to developing a business plan, check out this article by NerdWallet on How to Write a Business Plan, Step by Step.

Check each of these tasks off of your bookkeeping checklist

Unlike accounting, bookkeeping does not require any certifications. Individuals who are successful bookkeeping professionals are highly organized, can balance ledgers accurately, have an eye for detail and are excellent communicators. Bookkeeping focuses on recording and organizing financial data, including tasks such as invoicing, billing, payroll and reconciling transactions. Accounting is the interpretation and presentation of that financial data, including aspects such as tax returns, auditing and analyzing performance. Though often confused for each other, there are key differences between bookkeeping and accounting. At its core, bookkeeping is about recording financial data, while accounting is about interpreting financial data.

You can start a bookkeeping business with minimal capital from your home or manage it with your current job (if you are employed) and scale from there. You can use your presence in online communities or social media to generate interest in your firm and connect with potential leads in your target market. Josh Bauerle, founder of CPA on Fire, offers evergreen insights on his Growing Your Firm podcast episode on getting the initial clients for your new business. He attracted his earliest clients by tapping into his network of other business owners. You should have a professional-looking website that interested small business owners can visit to learn more about you and your services. You technically don’t need specific credentials or a certain level of education when offering bookkeeping services.

  • For business owners who don’t mind doing the data entry, accounting software helps to simplify the process.
  • Bookkeeping businesses have the potential to generate substantial profits due to the relatively low overhead and startup costs of this industry.
  • In general, the startup costs for a bookkeeping business can be low if you work out of a home office as opposed to leasing office space, which we’ll discuss in the next section.
  • After getting a website or e-commerce store, focus on optimizing it for search engines (SEO).
  • The best way to get a loan for a new business is to approach banks or other financial institutions and provide them with a business plan and your financial history.

The bookkeeping profession takes many forms, including virtual services and home-based businesses. Some CRM systems even offer a customer portal to make it easier for you and your clients to communicate. The best systems even integrate with popular accounting and bookkeeping software so data is always within easy reach. While sole proprietorships are typically the easiest to manage, other business structure options can be helpful if you add employees as your business grows.

Hire an Answering Service

While a bookkeeper won’t need a business degree to start a bookkeeping business, certain skills and experiences can increase the business’ chance of success. Your expenses could include software subscriptions, which are around $50/month, and possibly a coworking space at $200/month. Add in marketing costs, let’s say $100/month, and a budget for ongoing education and professional development at about $50/month. Bookkeeping businesses have the potential to generate substantial profits due to the relatively low overhead and startup costs of this industry. With most of the steps out of the way, it’s time to get a game plan together to let clients know you exist. If your personal savings are falling short, you may need to explore other avenues like loans or financial help from friends and family.

Low Start-Up Costs

You or your bookkeeper have processed all the paperwork and put it in a format your accountant can use. Your accountant will go through your small business bookkeeping reports, third party statements and government information reports submitted to CRA (or IRS). The only thing bookkeepers really don't need are your personal receipts. Personal expenses should not be going through your business accounts. Consider using one of the best bookkeeping services to make managing your books a breeze. Small businesses often work with tax advisors to help prepare their tax returns, file them and make sure they’re taking advantage of small-business tax deductions.

Get Listed in Online Directories

Some accounting software products automate bookkeeping tasks, like transaction categorization, but it’s still important to understand what’s happening behind the scenes. It all begins with getting your accounting software set up correctly. Are you considering starting a Bookkeeping Business and you’re in need of a bookkeeping business plan PDF? To keep your business organized, consider using a bookkeeping software that allows you to track expenses, generate invoices, and manage your accounts payable and accounts receivable. You should also create a filing system for all your financial documents, such as receipts and invoices, to ensure that you can easily access them when needed. Effective organization and record-keeping are essential for any bookkeeping business.

Free Accounting Workflow Templates

However, if your business grows to the point of hiring employees, you need to consider becoming an LLC or corporation. In addition to tax consequences, your personal liability in the event of a lawsuit can vary dramatically by business structure, so be sure to consult with an attorney. You will also create a financial plan that should include a 12-month profit and loss projection, projected cash flow, and a projected balance sheet. You will likely want to establish a business banking account and credit card. This can help you keep your own business expenses organized and separate.

Should I use a bookkeeping service agreement with clients?

If you get behind, it derails your whole financial system, not to mention your business. Whatever your recordkeeping system, just make it organized so your accountant can easily find any information s/he is looking for. Your accountant will need the following small business bookkeeping information packaged in an organized fashion. Some like to keep it all in a year end binder, others in a series of file folders. Managing transactions is a big part of any daily bookkeeping routine. It includes importing and categorizing transactions properly, reconciling these transactions and making sure they’re recorded according to your entry system and accounting method.

Legal requirements are determined by your industry and jurisdiction. Most businesses need a mixture of local, state and federal licenses to operate. Check with your local government office (and even an attorney) for licensing information tailored to your area. All businesses, other than sole proprietorships with no employees, must have a federal employer identification number.

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