A bookkeeping service is a great option for a freelance business. The initial investment if you start as a freelancer is not huge. You can start with a small fund and your business acumen. It is a plus if you are trained in accounting and financial management, you can easily start your bookkeeping start-up.
Bookkeeping services include tracking client income, preparing their tax returns, and processing payrolls. There are enough accounting software applications that will allow you to build and maintain a successful bookkeeping business. You can launch your business from home and expand it over a short period.
Developing a business plan for setting up any kind of business is very essential. Read the following sections to understand what kind of a business plan you need to start and grow your bookkeeping services.
Seek Professional Training
To create a successful bookkeeping service, you will first need to get trained. It should be the first step. Look for courses that provide extensive training on bookkeeping. Join a course that offers practical and hands-on knowledge. It will help you in the professional field.
The professional training you receive will not only teach you the basics of bookkeeping but also advanced services. Make sure that the training institute is nationally recognised and is offering a certificate. If you have a certificate your clients will trust you more.
Get Software Certification
While professional training in bookkeeping is necessary, you should also get certified in the use of certain software applications. Accounting software like QuickBooks and Xero can help in streamlining the bookkeeping process. Some of these software companies also offer partnerships. You can sign up for such partnerships to expand your business.
Such software certifications are usually free of cost and can be obtained online. These online certifications are available for free. Once you are trained to use the software, you can purchase it. If you are certified, your potential clients will trust you more. Using the right software will allow you to work efficiently and reduce errors.
Apart from accounting software, you should also learn to use payroll software, as well as software for practice management and electronic file sharing. Payroll software will come into use when you hire new employees. Practice management and electronic file sharing software applications will make your work hassle-free. You will be able to manage your clients’ books with ease and share transcripts and other files with them.
Every freelancer needs some funds to start their business. As a bookkeeper, you need funds to set up operations, buy the insurance and pay for advertising and marketing. Take note of how much money you can afford to spend as a part of start-up costs. You can apply for a business credit card to deal with these initial expenses. Try to raise enough capital to create a proper bookkeeping service. You should figure out what you need to invest in and keep aside some funds for emergencies. Do not use all your funds at once. Keep in mind that you will have to expand the business at one point in time, so make sure you have some money kept aside for that.
Register the Business
You need to register your business. It is one of the crucial steps as it establishes your business as a legal one. Legitimising and registering your bookkeeping business helps to limit or prevent personal liability at the time of lawsuits. At the time of registration, you will have to select a name for your business.
Choose a name that communicates exactly what your business is about. If you are not sure about the name and have a few options, talk to potential clients and ask your friends and family to review the names. You can also compare the name to the brand names of other bookkeepers.
After you select a brand name, you need to determine the structure of the business. It can be a limited liability company (LLC), a sole proprietorship firm, a corporation, or a partnership firm. The structure you decide on during registration will affect tax liability, capital, and your liability if the business is ever sued.
You can register your freelance bookkeeping business as a sole proprietorship firm and then change it to an LLC once you hire more people and are ready to expand. Before you select a business structure and register, consult an attorney. It is so that you can understand personal liability in the event of a lawsuit and choose a structure accordingly.
Create a Website
You need to have a functional website for your bookkeeping services. If you do not have the skills to build the website on your own, you can hire professional services to do so. Make sure that the site is user-friendly and easily navigable. Having a website will help clients find out about all the services you offer and the costs of each. Provide all details, including contact information on the site.
A website will also help you promote your business better. You can refer potential clients to the site or ask friends and family to do the same. Since most people search for everything online, having a website will make your bookkeeping business more accessible.
Plan for Office
Having adequate space for an office is essential for any business. As a freelance bookkeeper, you might decide to work from home, instead of investing in an office right away. But you need to make sure that you have a room or space in your home so that you can concentrate on work. If that is not the case then you need to set aside some funds and look for a co-working space or rent an office.
Set Up Everyday Operations
Certain operations allow your business to function properly every day. Once you launch your freelance bookkeeping service, you will need to look into these processes and enable certain operations so that you can work efficiently. These include setting up services for financial management and establishing proper communication with clients.
The first thing that you should do is open a business bank account. After you have registered the business, you should not keep using your bank account for business transactions. Open a separate business account at your local bank. Banks often offer several perks for business finance management through these accounts. Use this account to keep track of all expenses related to your bookkeeping services.
Now, you might want to wait till you have landed a client and there is a steady cash flow, before opening a business account. However, this is not a good idea. Open the account right after registration. Use it to manage all finances even before receiving payments from clients. It will help you get a better idea about the startup costs and handle your finances accordingly.
After setting up the business account, you need to think about the mode of communication you want to use. Clients should be able to contact you and seek assistance whenever required. As a freelancer, you might not always be able to get back to clients immediately. So you should hire answering services. An answering service directs your clients to customer support through live chat, text message, call, or email. If you do not use such a service and miss calls from clients, your business might suffer. So invest in these operations and provide prompt support to your clients.
Another form of communication that you need to set up is a business mailing address. If you have a separate office space, provide that address on your website. However, if you are starting your business from home, you can obtain a specific mailing address for your business so that you do not have to give your home address. You can do so by renting a post office box from your local post office. You can also rent a UPS mailbox. It will give you a real street address that you can put on the website as your mailing address.
Invest in Advertisements
Freelancers need to advertise their services. It helps to secure clients and create a customer base. Once you are ready to start work as a freelance bookkeeper, you need to invest in proper marketing strategies. Make use of the various social media platforms to advertise your business. You can start posting on Instagram and Facebook after creating a page for the business.
You can also pay for specific advertisements targeted at potential clients. It is one investment that you should not compromise on. Apart from paid advertisements, you can also spread the word about your services by asking friends and family to share details about them.
Hire a Marketing Manager
Marketing your bookkeeping services is another important part of your business plan. While building the website for your business, you can hire a marketing manager to customize it. Such customization includes the creation of a logo and specific content for the target audience. A marketing manager will optimize the website so that it is easily found by clients.
Marketing might seem like an expensive investment at the start of a freelance bookkeeping business. But it will help you gain more clients. Marketing managers will promote the brand and generate more revenue. A marketing manager will also come up with strategies like incentives for clients which will lead to better client loyalty.
Pay for Insurance
Business insurance is necessary for all types of businesses, even small start-ups or freelance services. You can pay for bookkeeper insurance. The reason why insurance is a must investment is that you can be sued by a client for errors. Now when this happens, you will need to cover all legal charges and pay damages. Bookkeeper insurance provides liability protection. With such insurance, you will not need to pay for liabilities from your pocket.
Decide on a Revenue Model
Once you start advertising, you are going to get clients. Now before you start working, you need to figure out how you will receive the payments. You can charge by the hour or set up a monthly payment plan. You can also keep different options so that the clients can choose whichever is convenient for them. Be very clear about the breakdown of charges so that your clients know what they are paying for. Assess your work and keep reasonable fees. However, make sure that you are profiting.
Prepare a List of Recommendations
When you begin work as a freelance bookkeeper, you will have to go on with just your certificate. But after you work with some clients, you will need to prepare a list of recommendations. This step needs to be a part of the business plan once you are ready to expand your customer base.
Ask your clients to provide these recommendations. You can post these on your website and make them accessible to potential clients. If you do good work, most of your clients will be glad to recommend your services.
Grow the Business
As you prepare a plan for your bookkeeping services, include strategies that will help you grow. Make sure to invest in the right tools and build your finances in a way that will help you take on more staff.
You will have to hire more people if you want to increase your clientele. You can also invest in administrative assistance so that you can focus on the actual work and personally engage with new clients. You can hire other bookkeepers or interns to share some of the workloads. It will help you develop the business and provide services to more clients.
Manage Your Accounts
Your bookkeeping skills are not just for the clients. Apply your strategies to your accounts so that they are well maintained and there are no discrepancies. Professional bookkeepers do not wish to pay another person to manage their accounts. However, some also end up ignoring the state of their accounts until it is necessary to check them. It is not good practice. Keep time aside to go over your accounts, manage your finances and make sure you do your taxes on time.
Every freelance business has its challenges. But once you start the work, you are going to hugely benefit from the business. With a small fund, you will have to invest in the right tools to make your bookkeeping services as error-free as possible and interact with your clients. Client interactions will help you understand where you can do better in the business, and in turn, it will help you succeed as a freelance bookkeeper in no time at all!