How to start a bookkeeping business in 9 steps

bookkeeping startup

You don’t have to be an accountant or a financial whiz, you just need to follow the process. With the right software, it’s very simple to learn, and day-to-day work doesn’t require any heavy math. Not only can anyone become a bookkeeper, but every business needs a bookkeeper, which means there’s no shortage of customers out there. Your balance sheet and income statement capture your business’s fundamental financial information.

Difference Between Accounting And Bookkeeping

One of the ways that startup founders most frequently create bookkeeping and accounting messes is by failing to open dedicated accounts for their business when they get started. Holded is a robust solution that offers accounting, invoicing, project, and inventory features — among several others. It lets you connect your bank, reconcile transactions, automatically classify entries, and manage it all in your ledger. OnPay can help you automate tax filings, enter payment data, and manage benefits including compensation insurance, health insurance, and 401(k). AccountEdge Pro provides double-entry accounting tools — from time billing and reporting to inventory — that are customizable and optimized for desktop users.

Which Software For Bookkeeping Should I Use?

This will give you the spending power to set up your company and put all of your business expenses in one place. That’s not only important for separating your business and personal finances, but can help you with your own bookkeeping come tax season. Keep in mind, though, bookkeepers differ from accountants as they cannot file taxes or perform audits like certified public accountants. While they can receive certifications through training programs, they can also simply acquire on-the-job experience to establish their bookkeeping business.

Pricing your services

  • If you’ve got a knack for numbers and a good head for organization, starting a bookkeeping business might just be the right choice for you.
  • Make sure to compare rates of other bookkeepers who share your credentials and experience.
  • The key to time management is creating an effortless bookkeeping accounting system.
  • After all, bookkeepers don’t have to have the education or credentials of a CPA.
  • Again, any accounting software application you purchase will have an invoicing component included, which means accounts receivable tracking as well.
  • Here are the differences between bookkeepers and accountants to keep in mind as you start your number-crunching journey.

Bookkeeping is one of the most important tasks that a business owner will delegate over the life of a business. Without it, it’s nearly impossible to produce an accurate record of financial activities that affect everything, from profit to equity to payroll, and more. Never leave the practice of bookkeeping (or your business assets) to chance.

bookkeeping startup

Write a business plan

Some business owners still keep track of their transactions by hand, but there’s little reason to do so these days. It takes significantly more time and effort than bookkeeping software and exposes you to human error. Wave is a powerful accounting solution for small businesses and individual contractors. It places significant emphasis on ease of use and synchronicity —letting you link your bank accounts, track your expenses, and balance your books without any trouble. It also lines up with Wave’s additional resources, providing you with an all-in-one solution if you opt to invest in its other products.

Startup Costs

bookkeeping startup

This is the easiest of the two methods; however, it doesn’t always provide the most in-depth or accurate representation of the company’s financial position. Furthermore, it is not recommended for businesses with staff or plans for expansion. A separate bank account is the first step in distinguishing between business and personal finances. Bookkeeping becomes more difficult when business transactions are lumped together with personal activity. Every financial transaction should have a line item in the general ledger, which tracks everything in one place. The general ledger notates the account number to which the debit or credit is applied.

Ways to Build for The Rise (And Fall) of Businesses

  • You’ll need to note the amount, the date, and any other important details to ensure you can accurately summarize your finances when it comes time for tax season.
  • Below are some of the most common statements a bookkeeper uses to monitor activities.
  • The cash basis recognizes revenues and expenses when money enters or leaves your account.
  • If you’re considering a business credit card, you might want to look for one that offers a generous rewards program and/or charges no annual fee.
  • Clients who are happy with your services are more likely to stay loyal and continue to hire you.
  • But the landscape for those solutions is packed, and it can be tough to know where to start.

Many clients will look for your website to find out about you and your experience. If you’re specifically running a totally virtual business, a website is Navigating Financial Growth: Leveraging Bookkeeping and Accounting Services for Startups extra important since it can demonstrate to clients your skills. And luckily, there are plenty of website builders to make creating your website a breeze.

How to Start Bookkeeping in a Small Business

This also means you need to manage all related payroll forms including 941s as well as W-2s and 1099s. It’s just as important to reconcile your credit card statements as it is your bank statement. Credit card fraud is a real thing and can sneak up on you with a lot of small charges put through to see if you’re paying attention. Be sure you have a backup for every charge on your credit card statement. This is particularly important if you have a company credit card that is used by multiple employees.

  • There are a few pieces of great software available for bookkeeping purposes.
  • Debits and credits should always equal each other so that the books are in balance.
  • Some accounting solutions offer a bookkeeper or accountant edition specifically designed for bookkeeping companies to use both for their books and as a portal to their client’s books.
  • It’s slightly different from QuickBooks and Xero since Sage excels in its project management and invoicing features and but has a more basic approach to bookkeeping.
  • As the owner, you’ll find that it’s easy to become wrapped up in the day-to-day tasks of running your business while ignoring that growing stack of papers on your desk.
  • You can learn more about the solution in our in-depth QuickBooks Online Payroll review.

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