If you seek a self-employment opportunity with low startup and overhead costs, a flexible schedule, and enabling you to perform practically all your work remotely, then starting online bookkeeping services is an ideal choice.
In this article, we will guide you on how to start a virtual bookkeeping business.
How Virtual Bookkeeping Works?
When a business hires a virtual bookkeeper, they provide the virtual bookkeeper remote access to their financial records and bookkeeping software. The bookkeeper (you) can access records and documents by logging in from home, just like you were there in person.
When working remotely with clients using cloud computing, there are 3 main ways:
- Connect remotely to the client’s computer to balance the books as though you were working on-site.
- Utilize personal private login to access online cloud-based bookkeeping software (like Xero or QuickBooks Online).
- Use the same desktop applications you are accustomed to via a hosted virtual desktop.
See more: How To Bookkeeping For Small Business (8 Must-Read Steps).
How To Start A Virtual Bookkeeping Business In 7 Steps?
Understand The Industry
Working in bookkeeping or accounting can help you develop the knowledge and abilities to grow independently. Learning the fundamentals of double-entry accounting, creating a general ledger, and categorizing and recording financial transactions is very helpful. Gaining experience will also enable you to better understand bookkeeping software, client types, bookkeeping services, and the prices of service.
You can also further your education and develop skills by joining professional bookkeeping programs and courses in community schools and online.
Decide What Services to Offer
Here are some examples of the work quickbooks bookkeepers can provide clients:
- Essential financial statements preparation (cash flow statement, income statement, and balance sheet)
- Accounts payable and receivable management
- Invoices preparation
- Payroll solutions
- Long-term assets tracking (such as machinery and equipment)
Get the Necessary Licenses and Permits
As online bookkeeping services manage credential information and financial data, clients should select a skilled, dependable, and trustworthy professional. Though quickbooks bookkeepers in the US are not required to hold a license or certification, obtaining a license or a certificate might inspire client confidence in your skills.
The following list of certificates will help you look more credible and possibly gain an advantage in the market:
- Certified Public Bookkeeper of the National Association of Certified Public Bookkeepers (NACPB)
- College/university bookkeeping program
- Certified Bookkeeper of the American Institute of Professional Bookkeepers
- Accounting software certification obtained from a software vendor such as QuickBooks ProAdvisor, Zoho Books Advisor, or Xero Advisor
Tackle the Legal Aspects
It is essential to consider several crucial legal and tax considerations when starting a bookkeeping business. Consult a lawyer, accountant, or tax expert to ensure you have the correct information, know your obligations, and be aware of how your choices will affect you.
- Select a business name. As you choose your company’s name, check to see if no other companies in your state have taken that name.
- Choose a business structure. Your choice of company entity type will have legal and tax repercussions. In the US, there are four typical structures to choose from: Corporation, Partnership, Limited Liability Company (LLC), and Sole Proprietorship (Schedule C).
- Establish a registered agent. As part of the official business registration procedure, you must designate an authorized registered agent to receive service of process (legal notifications, official government documents, etc.) on behalf of your company.
- Obtain an EIN. An EIN (or a federal tax identification number) is a special nine-digit number used to identify a firm on tax forms and other paperwork. Before opening a business bank account, most banks want an EIN, which is available for free from the IRS.
- Understand tax obligations. There may be various taxes at the state and local levels in addition to federal income tax. The company’s structure and location will affect the taxes and fees that a bookkeeping business must pay. State and local sales taxes, franchise taxes, gross receipts taxes, and state and local income taxes are a few examples of potential taxes.
- Business compliance requirements research. There is some level of continual compliance with every firm. You should understand clearly what to do and when, from registering and paying taxes on time to completing yearly reports, and renewing licenses and permits.
- Establish a business bank account. Open a bank account and credit card for your online bookkeeping services business to separate your personal and business finances. A bookkeeping business owner could lose the personal liability protection provided by their LLC or corporation if they conduct business and personal finance activities together.
See more: How Much Does Bookkeeping Business Cost For Small Business In 2023?
Obtain the Right Software and Technology
As a bookkeeping business, there are some software and technologies you can invest in to operate your work more effectively and give clients outstanding service.
- Core accounting software: The software you choose depends on your and your potential client’s preferences. A popular cloud-based option is QuickBooks Online. FreshBooks, Zoho, Sage Intacct, and Xero are more options based on your clients’ demand and the services you offer.
- Document management software: Consider the solution(s) that will help you efficiently receive, distribute, and file papers and data like Google Drive, G Suite, Hubdoc, Expensify, Wave, Shoeboxed, OneDrive, and Dropbox.
- Project management app: Having a management system to keep track of all deliverables might be helpful when managing work for different clients. Using project management tools like Trello, Asana, Active Collab, and Slack.
- Computer equipment. Once you have decided on the software you’ll need, you want to be sure your computer can run the desktop versions. To avoid cybersecurity disasters, take the appropriate safeguards (use antivirus software with malware protection).
Protect Yourself With Business Insurance
Consider gaining business insurance plans to safeguard yourself from a legal claim against your company. Professional liability insurance and general liability insurance are two different types that many QuickBooks bookkeepers secure.
It would be beneficial to ask a reputable insurance agent for advice and to check with the state to determine whether your bookkeeping business needs any specific insurance.
Promote Your Virtual Bookkeeping Business
Even if you provide excellent virtual bookkeeping services, no one will ever know about them if you don’t advertise them. Your company’s and your strategy’s success depend on promotion — your chances of selling increase when more people become aware of your business.
There are a few strategies you can apply as a virtual bookkeeper to publicize your company:
- Advertise by Facebook ads
- Engage in Internet forums
- Obtain publication on guest blogging websites
- Run a client referrals program
- Make social media profiles for your business.
Frequently Asked Questions
Is virtual bookkeeping profitable?
Virtual bookkeeping is a potentially profitable business idea.
Quickbooks bookkeepers are in high demand as most firms and independent contractors must keep records to calculate taxes and manage their finances.
How do you become a virtual bookkeeper?
To start a virtual bookkeeping business, follow the steps listed above. In short, you will need to:
- Learn about bookkeeping
- Create a plan for your bookkeeping business
- Register your business
- Promote your online bookkeeping services
- Find clients and deliver excellent service to get good referrals and more clients
- Growing your business.
See more: How To Become A Bookkeeper? (An In-Depth Guide 2023).
How much can you make as a virtual bookkeeper?
According to Glassdoor, the expected yearly compensation for a virtual bookkeeper is $52,919, with an average pay of $49,644 in the United States.
This article gives you the necessary information on how to start a virtual bookkeeping business. Once you start, remember to concentrate on providing customers convenience and valuable experiences so your business will have more chances to succeed.
If you want to learn more about the virtual bookkeeping business to start your business, contact our Outsourced Accounting Services today for a FREE consultation!
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