Bookkeeping Business

Recently there has been a lot of interest in the bookkeeping business. This may be due to the current economic recession and people are looking for any way possible (even accounting) to try and make money. Below I hope to present all the information you could ever want about small business bookkeeping.

Why Bookkeeping?

The truth is most people don’t like accounting. On top of that most people trained in accounting don’t like bookkeeping. I have a Masters Degree in Accounting from the #1 ranked accounting school and let me tell you, they act like bookkeeping is the worst thing ever. So, if accountants themselves don’t want to do it, that means there should be plenty of work to go around.

What does a Bookkeeping Business do?

If you are interested in starting a bookkeeping business then you should at least know a little bit about what your responsibilities will be. As a bookkeeper it is your job to keep track of financial information for the company. For example, if the company that is outsourcing its bookkeeping to you makes a sale, you would need to record the amount of the sale as well as the amount of the product sold. Your entries may look something like the following:

 Cash       $100
                        Sales           $100

Cost of Goods Sold $70
                          Inventory      $70

These entries will allow the company you are working for to know exactly how much cash and inventory they have on hand. It will also allow them to know their current sales and cost of goods sold. This is great information and it can really help companies make better business decisions. Who said bookkeepers were worthless? Honestly though, helping small businesses keep track of their books can be very rewarding.

Back to a bookkeepers’ accounting services responsibilities. The above journal entry is just one of the many entries you would need to make if you had your own bookkeeping business. You would likely need some training in basic accounting information. You can get a lot of this training online for free, or if you have the opportunity try taking an entry-level accounting course. One course on the basics should be all you need to really get your business rolling.

What Else Do I Need?

One of the best reasons to start this type of business is the low startup costs. If you really wanted to get down to the essentials, all you would really need is pencil and paper; however, this is not recommended. You should at least have your own computer and Microsoft excel or a similar open-source solution. Now some people would disagree with me on this, but I would recommend that you become proficient in QuickBooks. I’ve searched long and hard for bookkeeping jobs and almost all small businesses want a bookkeeper who knows how to use QuickBooks. If you have any training on bookkeeping, figuring out how to use this basic accounting software will be a breeze. This is a real way to set your business apart from other bookkeeping businesses.

How Much Can I Expect to be Paid?

This really depends a lot on where you live. I’ve seen ads in the newspaper for bookkeepers offering a measly $8-10 an hour (although this is usually for a full-time bookkeeper and not an out-sourced option). I’ve also seen some places willing to pay $25-$50 an hour for bookkeeping services. Unless you’re already an expert bookkeeper, I would start out charging less with my first clients and then as you gain steam start charging as much as you can. You’d be surprised: sometimes as your price goes up so does the amount of people who want to hire you (they think you are legit, because you are).

When you start out you will probably want to do your bookkeeping for a small business or even a friend. If you don’t know what you’re doing it is best to mess up on smaller clients. There isn’t a whole lot too it once you have done it for a while, but at first you’re bound to make some mistakes.

How to Start a Bookkeeping Business

I’ve explained a lot about what you would be doing as a bookkeeper above, but actually starting the business can be difficult. After you have the skills all you need is the clients. This might take getting a little out of your comfort zone, but at this point you will need to start talking with people. Ask your friend if you can help with her small business. If you’re feeling adventurous go out and talk with some of the local business owners. You might be surprised at how many of them want to outsource their bookkeeping. Note: taking over some of these people’s books can be excruciating at first. Some of these people have not kept adequate records and you may have to dig through old boxes to get the information you need.

Overall having a bookkeeping business can be very rewarding. Not only will you provide small companies with the information they need, but they will be thanking you when tax season rolls around because they will have all of their financial information up-to-date and organized.