So you think you can be a bookkeeper?
Bookkeeping is a side hustle that can be very rewarding if it’s something you enjoy and really good at.
Just think about it, every organization is going need a bookkeeper at some point. That means there’s always someone out there who’s looking for bookkeeping services.
And if you feel like that’s you, keep reading because I’m going to walk you through how to start a bookkeeping side hustle from home even if you’re a complete beginner.
What Does a Bookkeeper Do
Whether you’re selling fidget spinners, mobile apps, or legal advice, two things are guaranteed – you make money and you spend money. Bookkeepers are the people who keep track of all of that.
Bookkeepers, like accounting and auditing clerks, create financial records for organizations. They record financial transactions, keep financial statements up to date, and verify financial records for accuracy.
A bookkeepers’ duties generally includes:
- Recording every transaction that happens such as incoming and outgoing transactions, and posting them to appropriate books of accounts.
- Processing payments.
- Conducting daily banking activities.
- Producing various financial reports.
- Reconciling reports to third-party records like bank statements.
The Bookkeeper Role vs. The Accountant Role
The work of a bookkeeper often overlaps due to the fact that bookkeeping is part of the accounting process.
But, the main focus of the bookkeeper is to make sure that the company’s financial records are accurate. The bookkeeper’s key function is to record a company’s daily financial transactions including sales, payroll, and bills payment.
While the accountant’s main job is to analyze, review, and interpret financial data based on the information compiled by the bookkeeper. The company then uses the accountant’s recommendations for decision making.
In short, where bookkeeping ends, accounting begins.
Do I Need Bookkeeping Experience?
While a degree is not required to work as a bookkeeper, whether full-time or freelance, a certification makes you look a lot more credible over people who are not certified.
In the accounting field, the gold standard when it comes to certification in the US (CPA), there isn’t an equivalent in bookkeeping. But, there are two recognized bookkeeping certifications that you can look into if you’re planning to get certified.
- The American Institute of Professional Bookkeepers (AIPB), which offers a CB or Certified Bookkeeper designation.
- And the National Association of Certified Public Bookkeepers (NACPB)
Both certifications offer study guides, newsletters, and resources. But unlike most accounting certifications, the AIPB and NACPB cost less time and less monetary investment.
Bookkeepers also have the option of getting certified in particular accounting software. These software certifications do not prove that a person is a qualified bookkeeper, but signifies that they’re proficient in the use of the software.
The most common accounting software for bookkeepers are:
Reasons to Start a Bookkeeping Side Hustle
Bookkeeping is an awesome business because of a couple of reasons:
- You don’t have to be a CPA, nor need to have an accounting degree.
- You can easily make $40 to $100 per hour.
- The bookkeeping business can be ran virtually, from home.
These are just the major benefits, not to mention the flexible hours, which makes this perfect for stay-at-home parents, side hustlers, or someone who would like to create a service business in the future.
Unsure what the first step and even what the next steps are to starting an online side hustle for the first time? I don’t want to make this hard for you, so if you need help, join thousands of side hustlers in my Hustling Life community getting weekly support, education, and exclusive resources via email.
How to Start a Bookkeeping Side Hustle
- Step 1 – Learn Bookkeeping
- Step 2 – Set Up Your Business
- Step 3 – Find Clients After You Start
Step 1 – Learn Bookkeeping
Now, of course if you’ve had previous bookkeeping experience, step 2 might seem redundant so feel free to skip and go to the next step.
Otherwise, here are the two key steps to ensure that you can carry out bookkeeping services expertly:
- Choose a software
Pick an accounting software (Quickbooks, Xero, Freshbooks).
- Invest in education.
Even though you don’t necessarily need an accounting degree to become a bookkeeper, getting certified pays and gives you more credibility.
When you have a certification to your name, potential clients will see you as someone who has the skills and knowledge necessary to do primary accounting functions that a small business requires.
The client expects you to know how to prepare end-of-period adjustments, perform monthly bank reconciliations, payroll, and record depreciation for both book and tax purposes.
image by The Balance
Step 2 – Set Up Your Business
If you’re starting a side hustle, one of the most common pieces of advice you’ll get is to set up an LLC. Short for “limited liability company”, an LLC is a distinct legal entity formed at a state level, under the laws governing in the state it was formed.
An LLC is great for people who are venturing into their first solopreneurship or freelancing because of a few compelling reasons:
- It’s fairly easy to set up. An LLC has the least complex business structure aside from sole proprietorship.
- With an LLC, you’re not personally responsible for any debts or legal liabilities your business might incur.
- An LLC gives you an appearance of you being more established and more credible.
That legal protection alone is a compelling reason why you need to go the LLC route.
So, here are the exact steps on how to set up your business and become an officially recognized business entity.
- Business Name. Choose a business name that’s also available as a domain name (you need this later on when you work on your website).
- Business Type. According to UpWork, there are 5 business entities every freelancer should consider. These are Sole Proprietorship, Partnership, C Corporation, S Corporation, and LLC. (I recommend LLC because it’s how I’ve set up my business and the legal benefits it has for people who are just starting out and couldn’t afford to risk their personal finances and assets if they run into some legal troubles.)
- Register LLC. To set up an LLC, you need to file “Articles of Organization” with your Secretary of State. Go to your state’s website for more information. In the state of Georgia, when you file online, the fee is $100. See Filing Procedures For Forming A Georgia Limited Liability Company.
- Licenses. Check the appropriate websites for your city, state, and country business licensing requirements. For Atlanta residents, you can find more info here.
- EIN. Only if needed, apply an Employment ID Number (EID) from the IRS.
- Bank. If you haven’t, it’s best to open a bank account exclusively for your business to separate your personal finances. Your income and expenses should all go through this account.
- Insurance. I also recommend getting insurance as early as now to protect yourself from lawsuits and costly mishaps. For example, a Professional Liability Insurance protects professionals whose work depends on their expertise. It covers client mistakes over missed deadlines and lawsuits over mistakes. Other policies that you can look for in your small business are General liability insurance, Cyber liability insurance, Business owner’s insurance, and Workers’ compensation insurance.
- Office Supplies. Even though you’re working from home, a good computer and basic office supplies can help you be more organized and efficient.
Step 3 – How to Find Clients After You Start
To attract and get clients, marketing is key. You can’t close clients if they don’t know your business exists. That’s why setting up shop also requires investing in your marketing.
Marketing your new bookkeeping business includes the following tasks:
- Create a website. It doesn’t have to be fancy. And you don’t need to hire a web developer right away. Service professionals can get away with drag-and-drop website builders such as Weebly, Shopify, and Squarespace.
To give you an example, I recently published a blog post about ‘how to start a WordPress blog for your side hustle business.’
- Business cards. Don’t rely on online inquiries alone. Join networking events, participate in seminars/workshops, go where your target prospects go, and hand out business cards whenever you get the chance.
- Design your logo. Brandcrowd is a great tool when you need to design a logo fast. But if you’re strapped for cash, I recommend using Canva. With Canva you can easily set up your own brand kit with your brand colors, fonts and logo. A cohesive brand design can make you look more professional.
- Business email address. Typically, you can set up a work email (e.g. [email protected]) with your hosting provider (Bluehost, Namecheap, GoDaddy). Otherwise, you can use Google Workspace (formerly GSuite) to create a custom email for a fee.
- Set your rates. There are 3 ways on how to go about your pricing.
First, you can charge hourly. Start charging at least $40 an hour and raise your prices as you become more experienced.
Second, fixed pricing where a client pays a set amount for their bookkeeping services.
Third and last is a monthly retainer where a client pays you a recurring bill with hours and expenses tracked indirectly. I highly recommend the third option because it provides a more predictable income and a steady monthly cash flow.
- Get clients fast. No experience yet? Volunteer your services to a friend who requires bookkeeping services. In exchange for the free service, ask for a testimonial, and keep gathering more testimonials that you can use as social proof that you are legitimate.
Another way of attracting clients fast is to focus on a single niche. Niching down is a great strategy for people who would like to stand out from the rest of their competitors by being intentional on who they want to work with.
For example, if you have experience bookkeeping for food and beverage establishments, you can focus on that in the first six months. Reach out to old contacts, go to local F&B events, and connect with as many prospects in your local community.
As someone who specializes in a specific industry, potential customers will see you as someone who knows the financial kinks and quirks in their industry. This means you can charge higher than general bookkeepers.
Places where you can get clients for your bookkeeping side hustle:
It’s Time to Start Your Bookkeeping Side Hustle
Okay, so this may seem a little overwhelming. And I get that.
If you want to build a solid bookkeeping side hustle from home that has a better chance at lasting, I recommend Bookkeeper Launch and their free discovery series.
Ben Robinson, the expert behind the course, breaks down the virtual bookkeeping business step-by-step. It’s a jam packed course that covers not only the essentials of bookkeeping but the secret strategies that separates successful bookkeepers from the rest.
Be sure to take the 3-part series first to learn why a bookkeeping side hustle may be a good fit for you and whether or not you’ve got what it takes to get started. Enroll in the free class here.
Got questions? Comment down below and let’s start some meaningful discussions. And help this side hustler out by pinning this post and following me on Pinterest!