Wondering what makes virtual bookkeeping a lucrative business idea?
Firstly, bookkeeping services are in high demand as everyone needs to keep records and manage finances – be it freelancers, solopreneurs, small business owners, or corporations.
Secondly, you can start a virtual bookkeeping business with little investment. You just need a laptop, an internet connection, the right bookkeeping software, and a marketing budget to get started.
Learn how to start a virtual bookkeeping business and start earning early. On average, a virtual bookkeeper earns over $42K per year and you can do that as well.
And the best part?
As a virtual bookkeeper, you can work from home, a cafe, or beautiful travel destinations. Setting up an online business can help you enjoy the benefits of a flexible work schedule and the comfort of working from home.
However, there are things that you need to take care of to get started.
Read on this comprehensive step-by-step guide to set up your virtual bookkeeping business and start making money.
What Skills Do You Need to Start a Virtual Bookkeeping Business?
Here’s what you need to start a virtual bookkeeping business:
- Basic computer skills to work as a bookkeeper
- Training to become a certified or skilled bookkeeper
- Passing the CPA exam to become a Certified Public Accountant that people and businesses can trust
- Bookkeeping practice to ensure efficient record keeping, data entry, cash flow management, etc.
- Know-how of accounting software that you’ll use to provide bookkeeping services to your clients
- Good communication skills to get clients, negotiate with them, and collaborate efficiently
As a new business owner, you may also look for a mentor or consultant to guide you through the process of starting a bookkeeping business.
5 Steps to Start a Virtual Bookkeeping Business
Here’s a step-by-step plan to help you get started:
Step #1: Pick a Business Name
To start a business, you will have to pick a name for your virtual bookkeeping business. The name you choose should be relevant to your industry, nature of work, and should be available to register.
You can use business name generators online to look for unique and brandable names for your bookkeeping company.
Step #2: Register Your Bookkeeping Firm As a Legal Business Entity
The next step is to choose a legal business entity type for your virtual bookkeeping business.
If you’re going to start working as a full-time bookkeeper single-handedly, you can choose to form a sole proprietorship. However, you’ll be liable for all business debts and lawsuits as a sole proprietor.
But the good part is that it’s easy to register your business as a sole proprietor. You just need to fill out a simplified application and we’ll take care of the legal formalities at a much more reasonable rate than hiring a lawyer.
But what if you want to hire other bookkeepers as your team grows? Or, what if you want to reduce your personal liabilities as a business owner?
Many bookkeepers prefer to form limited liability companies (LLCs) to limit personal liabilities and enjoy the benefits of flexible management structures and taxation options.
To form an LLC, you’ll need to file Articles of Organization with the Secretary of State’s office and pay the state filing fee. You will also have to file for an EIN (Employer Identification Number) with the IRS. It is essential for paying taxes, hiring bookkeepers and other employees, and opening a business bank account.
While the rules and fees of forming an LLC differ from state to state, you can easily form an LLC with us in states like California and Texas. All you need to do is to fill out our one simplified application and we’ll do the rest for you.
Step #3: Acquire Other Business Essentials
Registering your business isn’t enough. You need a number of other business essentials to start offering virtual bookkeeping services to clients and make money.
What are these business essentials for virtual bookkeepers?
Here you go:
- Business bank account: It will help you separate business finances from personal expenses.
- Accounting software: You need to choose the right tool to serve your clients. Some powerful accounting software solutions in the market include QuickBooks Online, LessAccounting, FreshBooks, and Xero.
You can choose the tool that best fits your bookkeeping services needs.
- Business cards: When starting out, you should design a business card that helps promote your bookkeeping services. Print a few cards to hand to business owners and other potential clients whom you may come across.
Make sure that it includes your business website URL, the bookkeeping services you offer, your email address, and other contact information.
- Website: When starting a virtual bookkeeping business, building a web presence is essential. It often starts with a business website and social media profiles.
Make sure that your website offers all of the information that your potential clients may need.
- Business insurance: You should protect your business from unexpected liabilities and lawsuits. Virtual bookkeepers may need professional liability insurance and general liability insurance.
We have partnered with the most trusted insurers to help small business owners like you get the right coverage for your business.
- Licenses and permits: There isn’t any specific license requirement for businesses in the bookkeeping industry. However, you may need other licenses or permits to run a business within your county, city, or state.
You should check with the local authorities to see if you need any licenses to make your bookkeeping business stay legally compliant.
Step #4: Decide on the Bookkeeping Services You’ll Offer
Virtual bookkeeping services that you can offer your clients include:
- Creation of basic financial statements such as balance sheet and cash flow statement
- Invoicing
- Accounts payable management
- Accounts receivable management
- Payroll services
Step #5: Find Clients for Your Virtual Bookkeeping Business
The most important step to make money with your bookkeeping business is to find clients. For this, you need to promote your bookkeeping services using multiple advertising strategies.
You should assess your strengths as a virtual bookkeeper and use them as your unique selling point.
The best place to start to find clients is in your network. Tell your friends and family about your business and gather contacts of business owners who could be potential clients. After networking and getting referrals, you can market your services using social media, blogging, guest posting, paid ads, and more.
Frequently Asked Questions
1. How do I start my own bookkeeping business from home?
To start your own bookkeeping business from home, you should follow the steps below:
- Learn bookkeeping.
- Create a business plan.
- Register your business with the state.
- Promote your bookkeeping services.
- Find clients.
- Get the right accounting software.
- Set up a home office.
- Deliver great bookkeeping service.
- Grow your business.
2. Is virtual bookkeeping profitable?
Yes, virtual bookkeeping is a profitable business idea.
Bookkeepers are in demand as most businesses and freelancers need to keep records to calculate taxes and manage finances.
You can start an online bookkeeping business with as little as a computer, internet connection, and basic knowledge of bookkeeping and accounting. Some virtual bookkeepers also use collaboration tools, accounting software, and bookkeeping software to make work easier.
You can start earning early as a virtual bookkeeper and create multiple sources of income by partnering with various companies, individuals, and freelancers.
3. How do I become a virtual bookkeeper with no experience?
You don’t need to have years of experience as a practicing bookkeeper to start your small business.
To start working from home as a virtual bookkeeper, you should:
- Invest in yourself.
- Get basic bookkeeping training.
- Get yourself the right accounting software and learn how to use it efficiently.
- Consider certification to add to your credibility.
- Launch your own online bookkeeping business.
- Register it with the Secretary of State.
- Build a website to attract clients for your bookkeeping services.
4. Is it hard to start a bookkeeping business?
It isn’t hard to start a bookkeeping business if you’re good at handling finances and maintaining records. You need to maintain record books, manage company finances, and create a proper cash flow statement for your client.
Setting up your online bookkeeping business is easy if you follow all of the steps we’ve discussed above in this article.
5. Are bookkeepers in demand?
Bookkeepers are in great demand in the United States, especially if you’re a certified bookkeeper.
Ready to Start a Bookkeeping Business?
Now that you have learned how to start an online bookkeeping business, you should take the first steps towards becoming a renowned bookkeeper and getting clients.
Start with registering your business and building a website to get your first clients. You should focus on delivering great service to retain existing clients and attracting referrals. Quality of service will help grow your business in the long run.
Do you need help starting a virtual bookkeeping business? Let us know in the comments below.
