How to Start a Bookkeeping Business – Selecting Your Rate

If you are thinking about starting a bookkeeping business, at some stage you will ponder what to charge your clients. You might look at a fixed fee for your services or an hourly fee for services. Either way you will need to be sure that it is the right rate for your business.

I have been very fortunate as I have been in the position to talk to hundreds of bookkeepers across the country as part of my one day seminar. Some of those bookkeepers are already in their own business and some are thinking about starting. This has been a very interesting experience and a great opportunity to find out from many bookkeepers how they not only choose their rate but what they are charging per hour, or per hour equivalent.

What I have found fascinating is the difference in rate between established bookkeepers and those new to the industry and the perception of those new to industry to the rate charged. On average, people new to the bookkeeping industry select their hourly rate $15 per hour lower than those in business.

I found this very interested and decided to discuss and analyse this further as it was at every location that this occurred, not just an anomaly. People starting out were consistently charging a much lower rate than those in business, and often it was one third lower than established bookkeepers.

Through discussions, I found out that there were a few common reasons for this difference;

o Some people new to industry were not aware of the rates others were charging and did not know what a reasonable figure to select was;
o Some were lacking in confidence and felt they were not worthy of a higher rate;
o Some felt they did not have the skill set to charge a higher rate

What I found interesting was the common theme of either lacking in skills, experience or confidence and lack of knowledge of rates in general.

If you are setting up a bookkeeping business, when you do start thinking of rates, remember you are running a business and you need to be profitable. As a business owner there will be a number of expenses you need to cover which might have been paid as an employee. Additionally, you are providing a skill set which others do not necessarily have and there is a value on those services.

With a bit of research and thought into your specific expertise and skill set you will be well on your way to selecting a fair rate for service which will assist you in the growth and development of your own bookkeeping business.

7 Best Bookkeeping Business Services

If you’re a small business owner considering outsourcing your bookkeeping, keep in mind that bookkeeping business services include much more than just keeping track of your finances. If you hook up with a true professional service they can become much more than an accounting service, they can become important partners helping you optimize not only your cash flow but planning your financial strategies. Here’s a short list of benefits and services you can expect from a full service bookkeeper.

1. Time

Actually this may be the most productive benefit of all the services an outsourced bookkeeper can provide. By taking over the responsibility of accounting, the bookkeeper service effectively gives you more time to do what you do best and that’s run the business. Accounting is an absolutely necessary part of a business but it is not a profit center and it plays no part in driving sales and revenue. Any time you devote to that function is time taken from engaging in an activity that can generate sales or profit.

2. Financial forecasting

Using your firm’s financial history an experienced bookkeeping service can develop financial models that will allow you to play “what if” games that can predict your financial performance in the future. For example a business owner can ask what if sales increase 8% in the next quarter or what if the marketing budget is increased by 10% what kind of sales can be expected. This is a complex model that requires the knowledge of experts and would not be readily available to the owner unless he outsourced the function.

3. Tax planning

Running your business to take advantage of opportunity to minimize tax liability can be the difference between taking a loss and making a profit. The same goes for licensing and other local fees. A knowledgeable service will not only prepare your returns but show you ways to reduce your tax bill.

4. Real time reporting

Gone are the days of receiving monthly reports from your accounting service. In today’s business environment you need to know where you are financially right now and that’s what a professional bookkeeping service can provide. Thanks to ASP technology you can log onto your account using an ultra secure server and access all of your reports at any time and from any where you have an internet connection.

5. Customized reports

Your bookkeeping service will work with you to build reports that make sense for your particular business. Profit and loss statements, sales reports, receivables reports, all can be designed so they present the information in a way that you can best evaluate your position.

6. Assistance with lenders

A sign of just how tough and competitive the economic times are is the expansion of bookkeeping business services into areas that they previously did not participate in. Assistance with loan applications or even introductions to lenders is an example of the “new” services being offered by many firms. Loan applications can be intimidating and confusing to many business owners and the accounting service can offer valuable assistance in insuring that the right, and best, financial information is included in the application.

7. QuickBooks Consulting

Even if you don’t hire a bookkeeping service and you use QuickBooks in house to do your bookkeeping, you may find that the service can help you do it better. QuickBooks has added so many features and has become so much more than an accounting platform that it has created an entirely new support industry. If a QuickBooks customer wants optimal performance from his system, it’s likely he or she will need the advice of a certified QuickBooks consultant and the bookkeeping service is a ready, qualified resource.

A combination of rapidly improving technology along with an increasingly competitive market has caused bookkeeping business services to evolve into something greater than the traditional accounting services. Smart businesses will take advantage of these services to remain competitive and optimize earnings.

Good With Numbers? Start a Bookkeeping Business!

Do you really want to start a bookkeeping business? Then you better feel really comfortable with numbers and a bit of accounting experience is also called for in this type of business. When you start a book keeping business from home other business owners will be counting on you to keep accurate records of their business transactions and income. You will need to, not only be highly organized, but a sound understanding of business accounting, an understanding of state and federal tax laws, and full knowledge about bookkeeping practices are needed if your book keeping business at home is to prove at all successful.

Do not make the mistake of believing that you can start a bookkeeping business without the necessary knowledge and experience required by all independent bookkeeping professionals. It is not a simple as learning to use a calculator and learning how to use a computer program: there’s a lot more expected of the professional bookkeeper. Businesses will be relying on you to literally track their business actions throughout the year and you might be responsible for preparing important documentation to prepare the business for tax season.

When you decide to start a bookkeeping business, having an understanding of the bookkeeping software applications commonly used to track business transactions is a plus, but you also need to understand every action you are making as you utilize the software applications. Starting a bookkeeping business at home really starts with educating yourself about bookkeeping, account management, and about financial document preparations. You will also have more success starting a bookkeeping business at home after you have managed to get some experience in the field working either for an accountant or a bookkeeping firm.

Your knowledge and experience, as well as your sound understanding and appreciation for numbers will be what make your book keeping business at home a true success. First, you will be far more marketable: businesses often prefer to work with bookkeepers that are trained, skilled, and fully educated. Getting a secondary education from a local school or even enrolling in online courses for accounting can be a good place for you to start. After earning a degree in accounting, you can then pursue some outside work at an accounting firm where you can get the experience you will need to make an at home bookkeeping business successful. Bear in mind that the more experience you have in bookkeeping, the more money you will be able to legitimately charge for any bookkeeping services you offer the moment you start a bookkeeping business at home.

Easy Way to Start a Bookkeeping Business – Bookkeeping Subcontracting

There are many ways that you can realize your dream of starting a bookkeeping business. One of the easier ways is bookkeeping subcontracting.

Get contact with your local accountants and tell them that you are just starting out in this line and are able to deal with any bookkeeping or accounting assignments. Some of them are more than happy to refer you to their clients because many a time bookkeeping is not their main source of income. This is usually termed as bookkeeping subcontracting.

There are many benefits of this kind of arrangement. Firstly, you get to broaden your horizon because of the opportunity of exposing yourself to different type of business bookkeeping. Secondly, your risk of not being paid by your clients is much lower since you will be paid by your local accountants. This saves you from dealing with collecting debts and hence you can spend more time on other productive activities.

On the contrary, bookkeeping subcontracting does has its limitations. It restricts you from building your own clients base and therefore it should be a temporary measure to sustain your bookkeeping business. In the long run, you should allocate sufficient time to network with business owners, conducting talks on business bookkeeping, send out sales letter to potential customers of your services so that to reduce your reliance on local accountants.

Starting a bookkeeping business can be relatively easier. But it is generally agreed that the more difficult part is how to sustain it in the long term without bookkeeping subcontracting.