Summary
This discussion is the perfect guide on how to start a virtual bookkeeping business. You will learn the complete process of starting one, along with the reasons and benefits of it.
With so many things to handle as a business owner, bookkeeping isn’t something you would enjoy. But it is necessary, so the perfect solution is to outsource it and save up on your precious time for growth strategies.
In this guide, we talk about the benefits of outsourcing bookkeeping and how it works. By the end of this, you will get a clear view of why businesses are switching to this.
How to Start a Virtual Bookkeeping Business?
Small businesses need a helping hand to handle their finances. But most of them don’t have the luxury of getting a full-time in-house bookkeeper. That’s where the opportunity to start a virtual bookkeeping business comes in.
Here’s the thing: If you want to start one, you can do it even with a very low startup cost. It brings a recurring income and the flexibility to operate the business from anywhere. So, how to start a virtual bookkeeping business?
It’s simple, you just follow our guide below. Let’s start.
What is a Virtual Bookkeeping Business?
A virtual bookkeeping business records, stores, and manages financial data for other businesses remotely. Usually, the virtual bookkeeping business is an outsourced service. You will provide online bookkeeping services to –
Monitor accounts
File Taxes
Prepare Financial Statements.
What you are trying to do here is help the business track its income and expenses virtually. Then, the business will use that information to make decisions that lead to smarter expenses and improved profits.
Still confused? Check out what a bookkeeping virtual assistant is and how it works for an in-depth breakdown.
Why Start a Virtual Bookkeeping Business?
Plenty of reasons work as a driving force for starting a virtual bookkeeping business. Such as –
Low startup and running costs: The business can be started with just a PC, access to the internet, and bookkeeping capabilities.
Growing market: Businesses prefer to outsource bookkeeping more than an in-house team nowadays.
Scalable business model: You start the business by yourself, growing it slowly with team members.
Leverage advanced technology and automation: No restrictions on using tools give you the option to leverage advanced tools and automation.
Essential Skills You Need Before Starting a Virtual Bookkeeping Business
Create a checklist of the following essential skills before you even start marketing your business.
Accounting & Bookkeeping Basics: Understanding debits, credits, financial statements reconciliation, and accounting charts is a necessity.
Attention to Detail: Even a single misplaced decimal can completely mess up the books for a whole month. So, make sure to deal with the intricate details.
Software & Technical Proficiency: You can get the best possible results if you are comfortable with the latest bookkeeping tools.
Time Management & Workflow: Managing your time well gives you the ability to handle multiple clients at once. An efficient workflow is the secret to that.
Confidentiality & Professionalism: How well you handle clients’ financial information is a key selling point for a bookkeeping business.
Communication: What you tell your client has a huge impact on their business, as they use it for the decision-making process.
How to Start a Virtual Bookkeeping Business: Step-by-Step Guide
There are 6 key steps you need to follow to get started with a bookkeeping business from scratch. These are –
Assess Skills and Define Services
First, you have to assess the reality of your bookkeeping skills. Whether you have done it before, taken courses on it, or even have a professional degree in it. Based on what you can do, define the services you will provide.
For example, it can be full-service bookkeeping, payroll processing, or even monthly reconciliation. This part is important to avoid confusion later on in the business.
Evaluate Bookkeeping Qualifications and Certifications.
It’s not illegal to start a bookkeeping business without certification, but having one builds credibility. The American Institute of Professional Bookkeepers (AIPB) provides respectable certifications. You can also get one from the National Association of Certified Public Bookkeepers (NACPB).
If you want to skip these, you can still get credibility through proof of proficiency in bookkeeping software. The QuickBooks ProAdvisor is a great example of that.
Set Up Business Structure and Legalities
This is the formalities part of setting up your business. It’s where you determine whether it’s a sole proprietorship or an LLC, or a corporation. Typically, service providers opt for an LLC to separate personal and business liability.
Also, make sure to check the legal requirements for starting a business in your area. Having professional liability insurance or errors and omissions insurance keeps you protected just in case of mistakes.
Invest in Essential Tools and Software
There is no alternative to investing in the best, most up-to-date software and tools for your business. Some mandatory ones are –
Accounting software: Zoho Books, Xero, or QuickBooks Online
Client Communication: Gmail, Outlook, Slack, Zoom, Microsoft Teams, etc.
Time Tracking and Project Management: Asana or Toggle
Secure File Sharing: Dropbox, Google Drive, or other cloud storage tools.
Password Manager: 1Password or LastPass
Check out virtual assistant software tools to learn more.
Create a Pricing and Marketing Strategy
Just like all virtual assistant services, you have to come up with exciting pricing for your services. It’s a bit tricky, but a good place to start is to look at the online bookkeeping industry and its charges. You can choose between hourly rates and monthly packages.
[Pro tip: Pick monthly packages for a predictable income stream.]
As for the marketing strategy, the best approach is to reach out to businesses. You can start by offering bookkeeping services to your network. Then, start building an online presence on different social media platforms with content marketing.
You can also join small business owners’ online communities and reach out to them. Finish things off with a well-developed website that facilitates your bookkeeping services.
Acquire Clients and Build Relationships
Personal connections and referrals are the first things you should try to acquire your first clients. Look for small businesses in your network and offer your services to them.
After getting clients, you should start building a relationship with them to secure positive testimonials. Things like being proactive with your services, checking in on their progress, and addressing issues from your end are a great way to do it.
Some key Notes
Register your business where you operate: Officially register your business following all the formalities set by your local government.
Get a bank account: As soon as you start a business, it’s best to get a bank account for managing all the transactions.
Keep business and personal finances separate: Always keep them separate for ease of management and tax purposes.
Tips for Setting Up Secure Remote Bookkeeping
Convincing any business about remote bookkeeping comes down to a secure setup. Here’s how you ensure it –
Use Strong Cybersecurity Measures: To protect financial information from breaches, use unique and complex passwords with 2FA settings.
Use Secure Cloud Software and VPNs: Only use reputable cloud software and VPNs for secure access to data.
Regular Audits and Monitoring: Review access logs and permissions regularly to detect unauthorized entries.
Strict Controls and Legal Compliance: Ensure no outsiders have access to client data, follow data regulations, and maintain security transparency.
Maintain Data Backup: Use an automated cloud backup system to prevent data loss in various situations.
Conclusion
After going through everything, you get the clear idea that starting a virtual bookkeeping business isn’t that difficult. All you need is the right tools, a standard workflow, and of course, the bookkeeping basics. You combine these to form the business, then market it to the right people. That’s it.
FAQs
Is a bookkeeping business profitable?
A bookkeeping business doesn’t require much investment and has low operating costs, making it profitable.
What are resources for starting a virtual bookkeeping business?
The basic resources are an internet connection, bookkeeping skills, necessary tools, and software.
Is there high demand for virtual bookkeepers?
Of course, as businesses aim to save time and money, they are leaning more towards virtual bookkeepers.
How to get clients as a virtual bookkeeper?
The secret to getting clients as a virtual bookkeeper lies in marketing. Reach out to small businesses in your network and offer your services to them. You can try out freelance platforms for client acquisition as well.
