How to start a Virtual Bookkeeping Business?
A bookkeeping business could be the perfect choice for you if you are looking for a low-startup and overhead cost opportunity. It also offers flexibility and allows you to complete most of your work remotely.
Start a Small Bookkeeping Business
If you are interested in starting a virtual bookkeeping company, here are some details. This information is meant to give you an overview of the process and not replace professional legal, accounting, and tax advice.
1. If you’re new to the industry, learn the ropes
Working for an accounting firm or bookkeeping company can help you prepare to start your own business. This is a crucial step in starting a virtual bookkeeping company. This is especially important to learn accounting basics, such as double-entry accounting and general ledger preparation. It also helps you to classify and track financial transactions. You will gain experience in bookkeeping software and will be able to identify the clients you enjoy working with, the services you offer, and the prices customers will pay.
Also, look for opportunities to learn and develop your skills. There are many online programs for bookkeeping and continuing education at community colleges.
Consider joining a bookkeeping association or group that provides support and information to peers in the field. For ideas and questions, online communities such as those on Facebook or LinkedIn can be a great way to exchange them.
Listed below are a few you might find valuable:
- Bookkeepers Corner Group (Facebook)
- Bookkeepers Resource Group (Facebook)
- QuickBooks Consultants Q.B.O. Q.B. Power Hour Cloud Connect Accountant C.P.A. (LinkedIn)
- Bookkeeping Online (LinkedIn)
- A Bookkeeper’s Corner (LinkedIn)
2. Choose the right bookkeeping services to offer
Here are some examples of the work that bookkeepers do on behalf of clients:
- Preparation of financial statements (balance sheet and income statement, cash flow statement)
- Accounts payable management
- Accounts receivable management
- Invoice preparation
- Payroll services
- Long-term asset tracking (e.g. equipment, machinery).
Read More: QuickBooks live bookkeeping
3. Bookkeeping certification is an option
Clients will want to make sure that they hire a bookkeeper who is trustworthy, reliable, and knowledgeable as they are handling confidential financial information. Bookkeepers in the United States don’t usually need to be certified or licensed. But, customers can trust you and place their confidence in your abilities by becoming licensed or having a certificate behind your name.
Here are some certifications that will give you credibility and perhaps competitive advantage.
- Certified Public Bookkeeper (C.P.B.) Through the National Association of Certified Public Bookkeepers, (NACPB).
- Certified Bookkeeper (C.B.) The American Institute of Professional Bookkeepers (C.B.)
- College bookkeeping program
- Software providers such as QuickBooks ProAdvisor or Zoho Books Advisor can offer accounting software certification.
4. Learn the legal aspects of starting a bookkeeping business
You must pay attention to important legal and tax issues when starting a bookkeeping company. A professional advisor, accountant, or tax advisor can help you to ensure that you have the right information, understand your responsibilities, and make informed decisions.
Choose a business name
When you are deciding what name your company will be, ensure you verify that no other companies have claimed it. CorpNet’s Free Corporate Name Search Tool can be used to determine if your name has been claimed by others. A trademark search is recommended if you are thinking about expanding your business to other states. You may be able to find the desired name and reserve it to make sure it is yours when you register your business entity. Name reservations are common in most states. Also, Select a Business Structure
Designate a registered agent
You will need to designate an agent in your state that can accept the service of process when you register a business. Your business. CorpNet provides registered agent services across all 50 states. This makes it simple for bookkeepers to relocate or expand their services.
Register for an EIN
Even if your business doesn’t have employees you might still need an E.I.N. An EIN, also known as the Federal Tax ID number is a nine-digit unique number that can be used to identify a business on tax forms or other documents. A majority of banks require an EIN to open a bank account for a company. The I.R.S. can provide EINs for free. CorpNet is able to help you apply for an EIN if you don’t have time or want to do the paperwork yourself.
Understanding Your Tax Obligations
There may be additional taxes at the local and state level, in addition to the federal income tax. The tax and fees that a bookkeeping company must pay will vary depending on where it is located and the structure of the business. There are many options, including state and local income taxes, gross receipts taxes, franchise tax, and state and/or local sales tax.
5. Register for a Business Bank Account
You can open a bank account or credit card for your bookkeeping business only. This will allow you to keep your personal and business finances separate. You are a bookkeeper and you understand how important it is to keep accurate records. Mixing personal and business transactions (e.g. paying for personal items with a business check), could lead to ” piercing” and a bookkeeping business owner losing the personal liability protection they had through an LLC or corporation.
6. Get business insurance to protect yourself
Insurance policies can provide you with peace of mind in the event of a lawsuit against your business. Bookkeepers can secure professional liability, sometimes called “errors or omissions”, and general liability insurance. To get recommendations from trusted insurance agents, as well as to determine if you need any insurance for your bookkeeping business, it would be a good idea to contact them.
7. Get ready to market your virtual bookkeeping services
You can use both online and traditional marketing strategies to spread the word about your business. Joining local networking groups can help you make yourself more memorable by handing out business cards and brochures. Online marketing is a powerful tool that allows you to reach potential customers all across the United States. Your LinkedIn profile and website should clearly display your qualifications, experience, and services. Please upload a professional-looking LinkedIn headshot. If your default profile image is dark, clients will not be likely to look deeper into your profile. Targeted ads and promoted posts are cost-effective methods to increase awareness about your bookkeeping services if you have a Facebook business page. This is something I highly recommend.