Are you looking for a business that is both profitable and has low overhead? A bookkeeping business might be a great fit for you! In this article, we’ll explore some of the things you need to know in order to make your bookkeeping business a success. We’ll discuss what services you can offer, how to market your business, and what kind of profits you can expect. So if you’re ready to start your own business, keep reading!
1. What services does a bookkeeping business offer?
One of the questions we get asked most frequently is what services does a bookkeeping business offer? It’s a fair question, and one that we are happy to answer. Below is a list of some of the most common services that bookkeeping businesses offer.
Accounts Receivable Management
One of the most important services that a bookkeeping business can offer is accounts receivable management. This service ensures that your customers are paying you in a timely manner and that you are not accruing too much debt. This service includes sending invoices, following up on late payments, and keeping track of customer payment history.
Accounts Payable Management
Another important service that a bookkeeping business can offer is accounts payable management. This service ensures that you are paying your suppliers on time and that you are not accruing too much debt. This service includes sending payments, following up on late payments, and keeping track of supplier payment history.
If you have an inventory, then you will need to have someone manage it for you. This person will be responsible for keeping track of what inventory you have on hand, what needs to be ordered, and what can be sold. They will also be responsible for keeping track of your inventory levels so that you do not run out of stock.
As you can see, there are a variety of services that a bookkeeping business can offer. These services are designed to help businesses keep track of their finances and to ensure that they are running smoothly. If you are interested in starting a bookkeeping business, then we suggest offering some or all of these services to your clients.
2. What are the necessary skills to become a successful bookkeeper?
Bookkeeping is an essential but often underrated profession. A good bookkeeper can be the difference between a successful business and a failed one. If you’re thinking of starting your own bookkeeping business, there are certain skills you’ll need to be successful. Here are the five most important ones.
Good Math Skills
This may seem like an obvious one, but it bears repeating: you need to be good at math to be a good bookkeeper. You’ll be dealing with numbers all day, so being able to do basic arithmetic in your head and being comfortable with concepts like fractions, percentages, and decimals is essential. Don’t worry if you’re not a math whiz, though—there are plenty of calculators and other tools out there to help you.
Bookkeeping requires a high level of attention to detail. You need to be able to catch errors and discrepancies that others might miss. This means going over documents and records with a fine-toothed comb and being able to spot even the smallest inconsistencies.
A successful bookkeeper needs to be organized both in terms of their physical workspace and the way they approach their work tasks. A cluttered desk and disorganized paperwork will only lead to frustration and mistakes. Instead, take the time to create a system that works for you and stick to it.
In today’s business world, almost everything is done on computers. As a bookkeeper, you’ll need to be comfortable using various software programs such as Microsoft Office, Quickbooks, and Excel. While you don’t need to be a computer expert, you should at least have a basic understanding of how these programs work.
Dealing with numbers all day can be tedious work—but that’s why it’s important to have patience. A successful bookkeeper knows how to stay calm even when things get hectic or deadlines are looming. This doesn’t mean that you won’t make mistakes from time to time—everyone does!—but it does mean that you’re capable of keeping your cool under pressure.
These are just a few of the skills you’ll need to be a successful bookkeeper. Of course, every bookkeeper is different, so don’t feel like you have to check every single one of these boxes before getting started in your career. However, if you’re missing one or two of these skills, now might be a good time to brush up on them!
Read This Next: The Best Bookkeeping Course On The Market
3. How much money can you make as a bookkeeper entrepreneur?
When it comes to entrepreneurship, bookkeeping is often seen as a viable option because it offers low start-up costs and the ability to work from home. But how much money can you actually make as a bookkeeper entrepreneur?
According to the Bureau of Labor Statistics, the median annual salary for bookkeepers was $40,240 in 2018, with the top 10% earning more than $64,190. However, keep in mind that these numbers are based on employees who work for someone else and do not factor in self-employed bookkeepers.
If you’re thinking of starting your own bookkeeping business, there are a few things you need to take into consideration in order to determine how much money you can realistically make.
Start Up Cost
First, what are your start-up costs? If you already have a computer and accounting software, then your start-up costs will be relatively low. However, if you need to purchase equipment and software, that will obviously increase your costs.
Number of Clients
Second, how many clients do you realistically think you can take on? The more clients you have, the more money you will make. That being said, don’t bite off more than you can chew! If you try to take on too many clients, you will quickly become overwhelmed and end up doing subpar work. Quality is always better than quantity when it comes to bookkeeping.
Third, what are your hourly rates? Hourly rates can vary depending on experience, geographic location, and the type of work required (e.g., simple data entry vs. complex financial analysis). A good rule of thumb is to start out at around $25-$35 per hour and then increase your rates as you gain more experience.
There is no simple answer to the question of how much money you can make as a bookkeeper entrepreneur. It really depends on a variety of factors such as start-up costs, number of clients, hourly rates, etc. However, if you’re looking for a low-cost business to start with the potential to earn a decent income, bookkeeping is definitely worth considering!
4. What are the risks and challenges associated with owning a bookkeeping business?
For anyone considering starting a bookkeeping business, it’s important to be aware of the risks and challenges associated with the industry. While there are certainly rewards to be had from running a successful bookkeeping business, there are also a number of potential pitfalls that could trip up even the most carefully planned operation.
Needs Up-To-Date Technology
The first risk to consider is the dependence on technology. In order for a bookkeeping business to be successful, it must have access to reliable, up-to-date technology. This includes everything from computers and software to printers and scanners. If any of this technology fails or becomes outdated, it can quickly throw off the whole operation.
Another risk is employee turnover. Because bookkeeping can be such a detail-oriented and time-consuming task, it’s often difficult to find employees who are both qualified and willing to stick around for the long haul. High employee turnover can lead to inefficiencies and errors in the bookkeeping process, which can hurt the business’s bottom line.
As with any business venture, there are risks and challenges associated with owning a bookkeeping business. However, by being aware of these risks and challenges ahead of time, you can put yourself in a better position to overcome them. With careful planning and execution, a bookkeeping business can be a rewarding and profitable venture.
5. How to get started in your own bookkeeping business.
Are you accounting-savvy and looking for a way to make some extra money? Or are you perhaps interested in starting your own business? If so, then a bookkeeping business may be right for you! Keep reading to learn how to get started.
Determine Target Market
Step One: Determine your target market. Who will your bookkeeping business serve? Small businesses? Freelancers? Nonprofits? Knowing your target market is essential to building a successful bookkeeping business. Once you know who you’ll be serving, you can tailor your services to meet their specific needs.
Step Two: Get certified. While certification is not required to start a bookkeeping business, it will help you stand out from the competition and show potential clients that you’re serious about what you do. The American Institute of Professional Bookkeepers offers the Certified Bookkeeper designation, which requires passing a comprehensive exam.
Set Up Your Business
Step Three: Set up your business. This step involves deciding on a name for your business, choosing a structure (e.g., sole proprietorship, LLC, etc.), obtaining any necessary licenses and permits, and opening a business bank account. Once all of that is taken care of, you’ll be ready to start reaching out to clients!
With a little bit of know-how and some elbow grease, anyone can start their own bookkeeping business. By following the steps outlined above—determining your target market, getting certified, and setting up your business—you’ll be well on your way to success.
So, is a bookkeeping business profitable? The answer to that question really depends on the specific services you offer and your target market. However, if you’re willing to put in the work, there’s definitely potential for profit in this industry. We hope this article has helped give you a better understanding of what it takes to start and run a successful bookkeeping business.
Erika Finn, founder of Stacking Acorns, is an attorney who graduated from law school at University of California, Berkeley. She was a member and editor of the California Law Review and won the Prosser Prize for Legal Accounting. She holds a Master’s Degree from the University of Southern California (USC) and a Bachelor’s degree from Indiana University- Bloomington. Stacking Acorns is a personal finance website for women by women. We help mid-life women achieve financial freedom through real estate investing and other streams of passive income.