How to start a bookkeeping business: Top tips to help you succeed

How to start a bookkeeping business: Top tips to help you succeed

Wondering how to wilt a bookkeeper, or thinking well-nigh starting your own bookkeeping business? If so, you’re in the right place to take your first steps as you go from idea to reality.

There are many reasons why you might want to start a bookkeeping business. Perhaps you’ve worked as an in-house bookkeeper for a merchantry and you’re ready to take the plunge and set up for yourself.

Maybe you’ve been made redundant and setting up for yourself gives you a unconfined opportunity to take tenancy of your destiny and try something new.

Or perhaps you’ve unchangingly had a urgent desire to start your own business, are good with numbers, organised, looking for flexibility, and want to do something that will help clients unzip their goals.

No matter the reason, running your own bookkeeping practice can be extremely fulfilling.

So, if you’re interested in starting your own bookkeeping business, read this vendible to discover the key steps you need to take.

Here’s what it covers:

What’s the difference between a bookkeeper and an accountant?

How software can help to manage merchantry processes

How to start a bookkeeping business

Rules and regulations to comply with

Get insurance so you’re protected

Setting up your business

Final thoughts on starting a bookkeeping business

Download your self-ruling reprinting of The accountancy practice toolkit, which will help you start and grow your own firm

The terms “bookkeeper” and “accountant” are occasionally used interchangeable, but they are in fact 2 variegated roles.

A bookkeeper keeps track of monies coming into and out of a merchantry by maintaining well-judged financial records, equal to the International Association of Bookkeepers (IAB), the largest bookkeeping institution in the world.

Bookkeepers can help small and medium-sized enterprises (SMEs):

  • Prepare for year-end tax and VAT returns.
  • Keep on top of day-to-day mazuma flow.
  • Efficiently run their finances.

Characteristics of rhadamanthine a bookkeeper include stuff well-judged in your work and having a good understanding of financial topics.

Some bookkeepers moreover offer commercial brokering services, which involve helping businesses get the weightier deal when it comes to renewing insurance, ownership new equipment or leasing visitor vehicles.

Catherine Pyman runs her own bookkeeping business.

She says: “Bookkeepers alimony well-judged written records for a merchantry to enable the merchantry owner to view financials.

“These can then be sent to the purser to produce the year-end accounts. Bookkeepers moreover prepare VAT returns and can offer Self Assessment tax returns and payroll duties.

Claire Adams started her merchantry Papertrail Bookkeeping without she was made redundant from her job of 27 years.

She says: “We process VAT returns, reconcile wall finance [making sure the software matches the very wall statements], we process payroll and everything that entails, we well-constructed personal tax returns, final finance for sole traders, and accounts/corporation tax returns for micro entity businesses.”

What does an purser do?

There are numerous roles that accountants perform for their clients. Among them are the following:

  • Gauge the financial situation of businesses and remoter communicate the information to the relevant authorities.
  • Prepare financial statements as part of the written process.
  • Use special skills due to the tampering and ramified nature of accounting.
  • Act as a trusted adviser to businesses.

How much should you tuition for your services as a bookkeeper?

Essentially, there’s no well-spoken wordplay on how much you should charge. Factors to consider include:

  • Your bookkeeping experience.
  • The needs of your market.
  • The services you’re offering.
  • The size of merchantry you’re working with.

Generally, you’ll tuition either an hourly rate or a monthly stock-still fee. You may plane negotiate a retainer fee with some (or all) of your clients.

Adams from Papertrail Bookkeeping says bookkeepers often tuition virtually £25 per hour “but it does depend on the work taking place”.

She adds: “I tend to tuition my clients a stock-still fee to imbricate everything, so the vendee knows how much they’re paying up front.”

Setting your fees and getting your pricing right for your bookkeeping merchantry will take a bit of work but don’t finger that you need to price yourself too low.

Remember, you’re selling your expertise and subtracting value to clients who need what you’re offering.

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Digital software can help you monitor the workings of a merchantry in real time. You can then report wringer from those numbers and enable your clients to make largest informed decisions based on their finances.

Despite its name, good written software isn’t just for accountants. It can be used for your bookkeeping business, permitting you to view the finances of your clients and create financial reports, among numerous other things.

And by using a cloud written solution, you’ll be worldly-wise to wangle the numbers on any device, wherever you are.

That ways you can work with your clients in real time to go over their bookkeeping and highlight any queries with ease.

Ready to take the first steps to start your own bookkeeping business? Here’s what you need to do.

How to wilt a bookkeeper

The first step is to decide on what type of bookkeeper you want to be and how much time you can dedicate to it.

It’s worth reviewing what you can bring to this new career, so you have an wile to yank from. Is helping small businesses your passion or do you prefer the idea of keeping a giant corporation honest?

Your skill level will moreover determine where you can start your bookkeeping journey. Do you have the skills required to take on bookkeeping clients immediately, or do you need to ease yourself into it with an tutoring or offer your services to a small soft-heartedness for starters?

Qualifications to consider surpassing starting a bookkeeping business

Before you set up your bookkeeping business, it helps to do some training and proceeds relevant industry knowledge (if you haven’t once washed-up so).

There are many bookkeeping courses misogynist online and you can plane get a qualification from 1 of the written or bookkeeping organisations:

  • Association of Written Technicians (AAT)
  • Chartered Institute of Management Accountants (CIMA)
  • Association of Chartered Certified Accountants (ACCA)
  • Institute of Chartered Accountants in England and Wales (ICAEW)
  • International Association of Bookkeepers (IAB).

The IAB (and a number of other organisations such as AAT) offers a number of bookkeeping courses designed to fit virtually your lifestyle.

Its courses are regulated by Ofqual (The Office of Qualifications and Examinations Regulation), QiW (Qualifications in Wales) and CCEA (Council for the Curriculum, Examinations & Assessment).

There are 3 levels of qualifications from 1 to 3.

Examples include Level 1 Award in Bookkeeping, Award in Computerised Bookkeeping and Award in Computerised Written for Business. Increasingly details are misogynist on the IAB website.

Most bookkeepers siphon out Level 1 and Level 2 qualifications surpassing setting up their own bookkeeping practice, subtracting to remoter qualifications as they progress their career in bookkeeping.

Pyman became a bookkeeper by studying qualifications through the Institute of Certified Bookkeepers (ICB). She says: “They [the ICB], provide you with your practice license, membership number, and teach on what else is required to set up a practice.

“This covers AML [anti-money laundering], policies and procedures, insurance, logos, templates.

“Initially I was based at home and uninventive my first clients through local networking groups and written connections from when I had been in commercial banking. I now have an office and a couple of members of staff.”

Pyman is moreover a qualified Associate of The Institute of Certified Bookkeepers and has a Level 1 and Level 2 certification in Manual and Computerised Bookkeeping.

If you’ve unchangingly wanted to be a certified bookkeeper—and that’s your ultimate aim—there are options to do so by studying for the relevant document and diploma courses through accredited providers such the ICB. But you don’t need to be certified to wilt a bookkeeper.

Adams from Papertrail Bookkeeping says: “Becoming a certified bookkeeper shows that you have trained and have towardly qualifications in place to prove your skills.

“Once you pass the exams, you can wield for a practice license through organisations such as ICB. You need insurance in place and must ensure you’re complying with current anti-money laundering regulations.

“I know legislation is stuff tightened up, so it may well be that you need to have completed the qualifications to run your own merchantry in the near future.”

The AAT moreover has a range of bookkeeping qualifications with the highest document permitting you to wilt an AAT licensed bookkeeper. The highest document will indulge you to use the reports AATQB (as you’re an AA bookkeeping member) without your name.

Before setting up your bookkeeping business, it’s important to do your research. Questions to ask include:

  • Who will your clients be? Perhaps small businesses (50 employees or fewer, for example), micro businesses (9 employees or fewer), or sole traders.
  • How will you find clients for your bookkeeping business? This could include friends and family, your previous workplace, local advertising, website and social media marketing, and word of mouth.
  • What services will you be offering your clients? It could imbricate recording mazuma receipts, making wall deposits, paying supplier invoices, maintaining an yearly budget, payroll management, and so on. What services you offer very much depends on your clients’ needs.
  • How will you work with clients? Are you going to offer a 1-off bookkeeping service or an ongoing contract?

All these considerations are part of the worthier picture of your bookkeeping business plan.

Do you have 1, 3, or plane 5-year plans for your business? What do you want to unzip with your bookkeeping merchantry in terms of employing staff, turnover and success?

It’s important to do your research surpassing starting out so you’re well-spoken well-nigh the path you want to follow and the goals you’d like to achieve.

If you want remoter information well-nigh the whilom and more, the weightier place to start is the IAB.

It’s got increasingly than 150,000 students and members. You’ll find plenty of information well-nigh the bookkeeping profession on its website. For example, the professional exams and qualifications people have to take in order to qualify as a bookkeeper.

These qualifications are recognised industry-wide and imbricate everything from understanding merchantry documents, managing books and stuff worldly-wise to post and make entries, to managing credit control, recording ledger finance and preparing trial balances and other statements.

Download your self-ruling reprinting of The accountancy practice toolkit, which will help you start and grow your own firm

After passing your exams and obtaining your qualifications, the next step is to comply with a series of rules and regulations.

They include registering with the ICB (you can be fined if you don’t), applying for a practice licence, complying with money laundering regulations and complying with professional self-mastery regulations.

The reason why you need to comply with money laundering regulations is that as a bookkeeper, you need to satisfy a legal requirement to spot and reduce the risk of your clients laundering money.

With regard to professional self-mastery regulations, these are set out so you can follow vital principles for upstanding and professional conduct.

The regulations moreover set out your ongoing duties to the ICB and the disciplinary process that is used if a member breaches the regulations.

You’ll need bookkeeping insurance as you’re providing an essential service for businesses. Mistakes can happen. Professional Indemnity Insurance protects you versus claims made by unhappy clients and your employees.

It will protect your financial interests, help minimise disruption to your business, pay your fees if an unhappy vendee refuses to pay you, and imbricate the financing of rectifying a mistake.

You can moreover take out Public Liability Insurance, which covers you versus claims from third parties for personal injury, or property damage.

After passing your exams, registering with the ICB, ownership insurance and observing all the rules and regulations, you’re now ready to start up your own bookkeeping business.

You’ll need to register as self-employed with HMRC unless you are setting up a limited company.

Then you’ll need to decide whether you want to work from home or in an office. There are likely to be increasingly financing associated with setting up in an office space, with rental financing stuff one expense to consider.

If you’re setting up at home, make sure you have a designated working zone – you could turn a spare room into an office space, for example, or perhaps start at the kitchen table – and somewhere that you can store your clients’ paperwork.

Then there are the practical aspects to consider, including ownership a computer or laptop, purchasing written software and merchantry stationery, and setting up a merchantry wall account.

Setting up your own bookkeeping merchantry can be very rewarding, not only financially but as a lifestyle choice.

By taking the time to think well-nigh how to start written and bookkeeping for a small business, you can be confident that you’ll be prepared for all tax requirements and ensure your merchantry stays healthy.

In wing to this, you’ll be providing an essential service to your clients, helping them to run their businesses smoothly and efficiently.

Editor’s note: This vendible was first published in September 2020 and has been updated for relevance.