There are several reasons people forge career paths in any field of their interest. Like every other business, starting bookkeeping services requires research, skills, time, resources, marketing, and clients to keep your business alive.
Whether you have a burning desire and are considering starting your own business, setting up your bookkeeping business, have a running business, looking to niche down and select the best bookkeeping services to offer your clients, keep reading because you’ll discover the key steps to take.
On a side note, starting and running your bookkeeping practice, no matter your reason, will position you to help clients achieve their goals, and it is extremely fulfilling.
Do you want to find out how to start your own bookkeeping practice?
WATCH Business Steps to Starting Your Tax & Bookkeeping Firm
Who is a Bookkeeper, and What are Bookkeeping Services?
A bookkeeper is a financial expert who monitors, documents, and keeps a business’s financial transactions. Putting it this way makes it appear simple and easy. However, it is a more complex job than this summary.
A bookkeeper handles deposits, manages the business payroll, creates and maintains financial reports and withholding, and manages and coordinates sales and quarterly taxes. A bookkeeper is also responsible for reconciling bank statements to the business’s internal accounts and equally help during Internal Revenue Service (IRS) or internal audit.
A full-charge bookkeeper’s job extends to other aspects like assisting a business to get a business loan, drafting a business plan, designing the next year’s budget, or answering an audit.
A bookkeeper helps a business handle many complex financial activities and ensures that everything runs timely and orderly.
Bookkeeping services are simply the services provided by a bookkeeper for a fee. These services include recording and documenting the financial transactions of a business. Bookkeepers produce the summary of business activities as financial reports at intervals. These reports can tell the position and performance of a business at any point in time.
Bookkeeping services also include cleaning up accounts, invoicing, preparing tax returns, managing reporting, monitoring performance indicators, engaging in cash flow analysis and budgeting, and tax preparation.
Although bookkeeping services deal with financial transactions, it differs from accounting services. Bookkeeping services deal with the maintenance of daily financial records. Therefore, bookkeepers collect and document financial information used to prepare financial statements or books of accounts.
Meanwhile, accounting services include preparing, analyzing, reporting, and summarizing the financial information collected by the bookkeepers.
Bookkeeping Services Cost
Learning about the different types of bookkeeping services is not enough to get your business flourishing. You need to answer this complex but important question, “How much should a bookkeeping service cost? Or how should I charge for my bookkeeping service?”
There are several ways to approach these questions, but let’s go with the common; hourly and fixed billing.
One commonly used method is the hourly pricing method, where you bill your client hourly for your services. This method is used in service-based businesses, regular employment, and freelancers offering their services for a fee.
Bookkeepers can charge as low as $20 per hour and $80 per hour. But as a new bookkeeper, it’s better to peg your price around $20 to $40 per hour, and your price should also be based on the area you’re operating. So, do your research and ensure you have a good starting price. Over time, you can gradually increase your rate as you gain more experience. Many top expert bookkeepers offering bookkeeping services online or locally charge as much as $80 per hour as their minimum rate.
Most veteran Bookkeepers would have their clients on a fixed rate billing. This is because they will become proficient in their services over time, and they only need half of their usual time to complete the same tax. This means you will be receiving half of your usual pay for the same amount of job due to the accumulation of experience.
It’s reasonable starting on hourly billing and then transitions your clients into monthly fixed-rate billing after working for a few months. First, you need to know how much time you’ll need to complete the job. That way, you can have an estimated amount to present to the client as your monthly charges.
As you work closely with your client, you may even discover a few things about the client’s business that they didn’t know about. These could include issues that require your expertise to fix.
Hence, starting with an hourly rate pricing will be a favorable choice when dealing with a new client. Setting up their books will usually take some time since they could have some errors or disorders in the previous records before you started working on them. Some people could have their books jumbled for up to a year or more, which will mean a heap of work for you.
After a few months of working on their books and organizing their records to have a steady flow, you can now transition your client to a monthly fixed price. Because at that point, you should have figured out how much work you’ll need to put in, how long it will take you, and how much your monthly bill will be to keep their books updated.
Also, remember to explain to your clients how moving from hourly billing to monthly billing will benefit them too. This will help them know exactly how much they will be spending monthly on their bookkeeping bill, and on the brighter side, they can budget accordingly.
WATCH How to Price Bookkeeping Services Breakdown & Clean-Ups (Hourly vs. Value Price)
Best Bookkeeping Services to Offer
Bookkeeping contains several important components required to maintain the financial records of a running business. Whether recording sales revenue or balancing accounts, bookkeeping includes several other tasks.
The best bookkeeping services to offer include:
Recording all financial transactions
Bookkeeping is basically about recording all business financial transactions, such as sales and expenses, including all cash flow (receivables and payables). This is one way you can offer bookkeeping services.
Preparing financial reports and statements
As a bookkeeper, you may also be required to prepare financial reports and statements covering a specific accounting period. For example, bookkeepers can arrange and prepare a financial statement detailing the gross and net revenue generated for a business’s fiscal year.
Managing bank feeds
While working in a virtual environment, bookkeeping software can be connected to a business’s bank accounts, giving a bookkeeper access to monitor and track transactions as they take place. This way, a bookkeeper can match the business’s financial records with the transactions happening in the business’s bank accounts.
This type of service is usually common with people who work remotely and offer their bookkeeping services online.
Bookkeeping services can also include payroll management. Here, a bookkeeper will be responsible for the benefits, taxes, and other relevant deductions to employees’ wages to ensure proper documentation and payroll processing.
Reconciling bank accounts of a business
Bookkeeping practice also includes reconciling a business’s accounts and ensuring the financial information in the accounting software matches with the information recorded on the business’s bank statements, income statements, and credit statements.
Handling accounts payable and accounts receivable
Bookkeeping service includes handling businesses’ accounts payable and accounts receivable. Although larger firms may likely have separate account experts handling each department, small or mid-sized bookkeepers are usually the specialists in maintaining the firm’s incoming and outgoing financial transactions.
Most times, the assistance of bookkeepers is required during the preparation and filing of a company’s income taxes. The tax preparation process could include arranging financial records for expenses, reporting revenue, filing tax statements, and other relevant deductions.
Using technology for tasks
Bookkeeping services also include the use of software and technology to perform tasks. Being skilled in using relevant technologies can be an edge to help you stay relevant in a virtual environment. Bookkeeping in this modern age uses different types of software and applications to complete tasks essential to accounting. For example, some clients prefer the use software such as QuickBook and other similar bookkeeping software for their bookkeeping.
All the listed services are important components of bookkeeping. You can offer any of the services as a single package or possibly all as a full-charge bookkeeper.
Is Becoming A Tax Preparer Hard? Click to find out!
Getting bookkeeping clients for your bookkeeping services
Now that you know about the best services to offer clients, you might wonder how to get those bookkeeping clients in the first place?
Converting or landing a new client is not always an easy task. Clients are the fuel needed to power your business engine. If you fail to get clients to hire you, your business may likely become stagnate or even close down.
Although the business world is not merciful to anyone, with a well-formed plan, you can pull through and get clients to look your way and hire you.
Let’s discuss what you need to do to get clients.
Identify your target market
You need to understand “who are your clients?” Next, you’ll have to identify and then niche down on your target clients. This includes the nature of their businesses, size, and profitability.
After you’ve identified your target clients, you’ll need to identify the class of the clients, such as those who require regular book maintenance. Remember to niche down as much as possible to find their specific need before approaching them.
Referrals are based on the quality of work
Satisfying a customer is one of the best ways to get more customers. Imagine free advertising through word of mouth. A satisfied customer will surely recommend you to others. Remember to keep a good relationship with your existing customers.
Online presence and social media marketing for your bookkeeping services
Today’s world is technology-driven, and it cuts across all avenues. Have an online presence by setting up your website, maintaining your Google Business Profile, and leveraging other marketplaces and online job platforms like LinkedIn, Upwork, Fiverr, Freelancer, and Guru to offer your bookkeeping services.
Set up your social media accounts on Facebook, Instagram, Twitter, and similar social media platform and look for relevant communities to join. Arguably, social media is now one of the most powerful marketing tools in the world today.
If you can understand a client and their needs and satisfy them to the best of your abilities, you’d have laid a good foundation for a long-term working relationship. Once someone feels comfortable with you, there’s a higher chance of sticking around.
Requirements for Getting Bookkeeping Clients
There are several ways to acquire bookkeeping knowledge and skills. Still, the best way to convince anyone is to get certified.
If you don’t have any formal training or education in bookkeeping or you wish to grow and scale up your bookkeeping business, you can learn more about how to get certified as a bookkeeper or get other qualifications that will boost your current skill, knowledge, and connect with other bookkeeping experts at Certifyible.com.
Effective bookkeeping can make or break a business. Hence the services of bookkeepers are always in demand to help business owners accurately and efficiently organize their financial records to avoid mismanagement errors.