How to Start Your Own Bookkeeping Business

As the number of small businesses continues to grow, so the skills of bookkeepers are increasingly in demand as many smaller traders choose to benefit from the cost and time savings associated with outsourcing tasks such as finance. Running your own bookkeeping business can be flexible, rewarding and profitable if planned, implemented and managed properly.

But what do you need to know before starting a bookkeeping business?

What is a bookkeeper?

Firstly, let’s be clear about what a bookkeeper does. Generally speaking, a bookkeeper will be charged with ensuring a business’ financial information is accurate and up to date. Key tasks will include data entry to record financial transactions and balance the books; bank reconciliation; and creating monthly reports that summarise the business’ financial position.

These reports are essential and will feed into management decision making; in fact, some bookkeepers may actually be involved with a company’s strategic development.

A bookkeeping role can be quite varied and may also include payroll, creating and sending invoices and ensuring they are paid, preparing self-assessments and much more.

One area often not thought about when starting out is the bookkeeper’s role in training their clients. Many small business owners may not be clear on their bookkeeping responsibilities, so you can provide a valuable service showing them how and when to carry out tasks such as invoicing, stocktaking and creating expense reports. You can also advise on accounting software options to make this easier. Deciding on the services you wish to offer will be a key part of setting up your business.

Bookkeepers differ from accountants, however. To find out how read our blog how to start a freelance accounting business.

What qualifications do I need?

You don’t need any specific qualifications to set up as a bookkeeper, and in many cases, your previous experience will be the key factor in your success. Having said that, there are a number of recognised qualifications that can make it easier to attract clients and charge a higher rate.

Key among these would be the Ofqual-, QiW- and CCEA-regulated IAB (International Association of Bookkeepers) bookkeeping qualification, ICB (Institute of Chartered Bookkeepers) certifications and AAT (Association of Accounting Technicians) awards that start with courses for those with no previous experience, all the way up to an Advanced Certificate in Bookkeeping for experienced practitioners. All of these are also recognised internationally should you wish to work with overseas clients.

Other organisations to look at include CIMA, the ACCA and ICAEW. Most of these offer courses designed to be flexible and to cater for all levels of candidates, with three levels of qualification on offer.

Before going it alone, many people look to pass level 1 and level 2 exams with the option to add to this as your business develops.

For those looking to work across Europe and further afield, you may consider gaining local accreditations too. European associations it may be worth looking into include the DBV and WPK in Germany, the Ordre des Experts-Comptables (OEC) in France and the Asociación Española de Contabilidad y Administración de Empresas (AECA) in Spain. The ICAEW also has some good resources in this area.

In the US, The Certified Public Bookkeeper (CPB) licence accredited by the National Association of Certified Public Bookkeepers (NACPB) is a highly regarded accreditation as is AIPB certification. In Canada, the Certified Professional Bookkeeper (CPB) designation is recognised across the country, while the the Canadian Bookkeepers Association (CBA), the Institute of Professional Bookkeepers Canada (IPBC) and the Canadian Institute of Bookkeeping (CIB) also offer accreditation.

Rules & Regulations

As a bookkeeper, you’ll have access to sensitive information and will very much be in a position of trust. This being the case, you’ll be required to follow various rules and regulations which will vary by country. Key among these in the UK is the need to register for anti-money laundering supervision.

If you are registered with a recognised supervisory body such as those mentioned above, this will cover you for money laundering regulations. The ICB Practice Licence, for example, includes supervision under the Money Laundering Regulations at no extra cost.

If not, you need to apply directly with HMRC. There are various fees associated with this, including a charge of £300 for each of the premises you include in your application and a £40 approval test fee. You’ll also need to renew your registration each year at the cost of £300.

It can also be a good idea to get professional indemnity insurance – this is a requirement of some professional bodies. PI insurance will cover you if you’re subject to a legal claim, for example, if the advice you give to a client causes them a financial loss.

Design your business model

Once you have your qualifications and licences in place, it’s time to start thinking about your actual business and what you want to achieve from it. A key part of this is designing and defining your business model. To achieve this, it can help to ask yourself a few questions, such as ‘what services am I going to offer’, ‘who am I going to offer them to’ and ‘how am I going to deliver them? When considering the answers to these, think long term. What do you want to achieve with your business – do you want employees, global growth and a saleable business, or do you prefer the idea of being a small provider delivering a more personalised service?

Research your target market

Once you’ve defined the broader aims of your business, it’s time to focus on achieving these, which means understanding your target market. When starting a new bookkeeping business, it can be tempting to offer every service possible in order to increase your chances of success – and there’s nothing wrong with that approach so long as you’re able to deliver it. You may want to work across various sectors offering everything from accounts payable to consultancy but its also an option to position yourself as a specialist and potentially charge more for this expertise by focusing on a specific niche.

Whichever route you choose to go down, creating a choice of packages to offer clients can encourage them to send more work your way than they perhaps planned initially and can mean you’re able to work on a retainer each month rather than having to manage an uncertain income.  

How much should I charge?

Deciding what to charge is always tricky when starting out, so again, utilise your network and draw on your previous experience to work out a fair fee to your client and allows you to run a profitable business.

You could explore several pricing options, from billing by the hour to flat fees for specific work or even a monthly retainer. All have their pros and cons, and it may be that you use different models for different clients. For example, billing by the hour means you will be paid for every piece of work you do, but it can be more difficult for the client to manage their costs; flat fees, on the other hand, are clearer, but if you underestimate the work involved it can affect the profitability of a project.

Read more about how to price your services here.

Invest in the right equipment

Once you’re clear on what you’re going to offer and how you’ll package it, you need to make sure you can deliver the work. Fortunately, establishing your bookkeeping business is actually pretty straightforward, and the biggest investment in terms of hardware will be a laptop/computer and a phone.

One decision that will have a major impact on the success of your business will be the accounting software you choose. The prevalence of online accounting software is a significant reason why now is such a good time to go it alone as a bookkeeper - the right solution will help you attract, retain and service clients quickly and effectively no matter where they may be located.

Ease of use and access is central to any good bookkeeping software but also look for features such as the ability to login at the same time as your clients to review their financial position and make adjustments in real-time, create VAT reports, supports Making Tax Digital and offers a variety of useful reports.

Another important factor is to ensure that the platform has been accredited. For example, AccountsPortal has been accredited by the ICB, demonstrating that it has been thoroughly tested and proven to be robust and reliable.

Another big advantage of AccountsPortal is that it can be white labelled, thereby allowing you to use your own unique web address, logo and colouring to provide a professional and consistent brand experience for clients.

Promote your business

Now that you know who you want to work with and are ready to go, it’s time to start attracting some clients. Central to this will be your online presence – remember, with the right accounting software, you can work with clients anywhere in the world, so a solid online profile is vital.

A good starting point will be your website. This should provide all the information a prospective client needs, such as your experience and qualifications, the services you offer and how to get in touch with you. It should be factual and easy to navigate but also, don’t be afraid to inject some personality into the content. Maybe include a blog to keep the site looking fresh. If you decide to do this, your articles can also provide great content for your social media accounts, the second key element of your digital presence. Facebook, Twitter, LinkedIn and Instagram can help you reach different audiences and build your network, but they take time to manage, so explore where your prospective clients are active and focus on those. Don’t forget to join relevant groups and communities on social media too. Contributing and sharing opinions can be a great way to develop new contacts.

Away from the digital world, you may also choose to advertise your business locally, attend relevant events and trade shows and even offer your insight to the industry media. There are numerous ways to get your name and your brand out there, and many of them don’t have to cost anything.

Once you start to bring in clients, don’t forget to ask for their feedback on your work. Client testimonials are one of the most powerful ways to promote your capabilities and ensure your long-term success.

Accounts Portal can help you get set up and ready to work with clients quickly and cost-effectively. To find out more, start a 30-day free trial or get in touch with us via our support pages.