How to start a bookkeeping business: Top tips to help you succeed
Thinking about starting your own bookkeeping business? If so, you're in the right place to learn about taking the steps to help you go from idea to reality.

Wondering how to become a bookkeeper, or thinking about starting your own bookkeeping business? If so, you’re in the right place to take your first steps as you go from idea to reality.
There are many reasons why you might want to start a bookkeeping business. Perhaps you’ve worked as an in-house bookkeeper for a business and you’re ready to take the plunge and set up for yourself. Maybe you’ve been made redundant and setting up for yourself gives you a great opportunity to take control of your destiny and try something new. Or perhaps you’ve always had a burning desire to start your own business, are good with numbers, organised, looking for flexibility, and want to do something that will help clients achieve their goals. No matter the reason, running your own bookkeeping practice can be extremely fulfilling. So, if you’re interested in starting your own bookkeeping business, read this article to discover the key steps you need to take. Here’s what it covers: What’s the difference between a bookkeeper and an accountant? How software can help to manage business processes How to start a bookkeeping business Rules and regulations to comply with Get insurance so you’re protected Setting up your business Final thoughts on starting a bookkeeping businessWhat’s the difference between a bookkeeper and an accountant?
The terms “bookkeeper” and “accountant” are occasionally used interchangeable, but they are in fact 2 different roles. A bookkeeper keeps track of monies coming into and out of a business by maintaining accurate financial records, according to the International Association of Bookkeepers (IAB), the largest bookkeeping institution in the world. Bookkeepers can help small and medium-sized enterprises (SMEs):- Prepare for year-end tax and VAT returns.
- Keep on top of day-to-day cash flow.
- Efficiently run their finances.
What does an accountant do?
There are numerous roles that accountants perform for their clients. Among them are the following:- Gauge the financial situation of businesses and further communicate the information to the relevant authorities.
- Prepare financial statements as part of the accounting process.
- Use special skills due to the analytical and complex nature of accounting.
- Act as a trusted adviser to businesses.
How much should you charge for your services as a bookkeeper?
Essentially, there’s no clear answer on how much you should charge. Factors to consider include:- Your bookkeeping experience.
- The needs of your market.
- The services you’re offering.
- The size of business you’re working with.
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How software can help to manage business processes
Digital software can help you monitor the workings of a business in real time. You can then report analysis from those numbers and enable your clients to make better informed decisions based on their finances. Despite its name, good accounting software isn’t just for accountants. It can be used for your bookkeeping business, allowing you to view the finances of your clients and create financial reports, among numerous other things. And by using a cloud accounting solution, you’ll be able to access the numbers on any device, wherever you are. That means you can work with your clients in real time to go over their bookkeeping and highlight any queries with ease.How to start a bookkeeping business
Ready to take the first steps to start your own bookkeeping business? Here’s what you need to do.How to become a bookkeeper
The first step is to decide on what type of bookkeeper you want to be and how much time you can dedicate to it. It’s worth reviewing what you can bring to this new career, so you have an angle to draw from. Is helping small businesses your passion or do you prefer the idea of keeping a giant corporation honest? Your skill level will also determine where you can start your bookkeeping journey. Do you have the skills required to take on bookkeeping clients immediately, or do you need to ease yourself into it with an apprenticeship or offer your services to a small charity for starters?Qualifications to consider before starting a bookkeeping business
Before you set up your bookkeeping business, it helps to do some training and gain relevant industry knowledge (if you haven’t already done so). There are many bookkeeping courses available online and you can even get a qualification from 1 of the accounting or bookkeeping organisations:- Association of Accounting Technicians (AAT)
- Chartered Institute of Management Accountants (CIMA)
- Association of Chartered Certified Accountants (ACCA)
- Institute of Chartered Accountants in England and Wales (ICAEW)
- International Association of Bookkeepers (IAB).
Do your research and create a business plan
Before setting up your bookkeeping business, it’s important to do your research. Questions to ask include:- Who will your clients be? Perhaps small businesses (50 employees or fewer, for example), micro businesses (9 employees or fewer), or sole traders.
- How will you find clients for your bookkeeping business? This could include friends and family, your previous workplace, local advertising, website and social media marketing, and word of mouth.
- What services will you be offering your clients? It could cover recording cash receipts, making bank deposits, paying supplier invoices, maintaining an annual budget, payroll management, and so on. What services you offer very much depends on your clients’ needs.
- How will you work with clients? Are you going to offer a 1-off bookkeeping service or an ongoing contract?
Rules and regulations to comply with as a bookkeeper
After passing your exams and obtaining your qualifications, the next step is to comply with a series of rules and regulations. They include registering with the ICB (you can be fined if you don’t), applying for a practice licence, complying with money laundering regulations and complying with professional conduct regulations. The reason why you need to comply with money laundering regulations is that as a bookkeeper, you need to satisfy a legal requirement to spot and reduce the risk of your clients laundering money. With regard to professional conduct regulations, these are set out so you can follow basic principles for ethical and professional conduct. The regulations also set out your ongoing duties to the ICB and the disciplinary process that is used if a member breaches the regulations.Get insurance so you’re protected
You’ll need bookkeeping insurance as you’re providing an essential service for businesses. Mistakes can happen. Professional Indemnity Insurance protects you against claims made by unhappy clients and your employees. It will protect your financial interests, help minimise disruption to your business, pay your fees if an unhappy client refuses to pay you, and cover the costs of rectifying a mistake. You can also take out Public Liability Insurance, which covers you against claims from third parties for personal injury, or property damage.Setting up your bookkeeping business
After passing your exams, registering with the ICB, buying insurance and observing all the rules and regulations, you’re now ready to start up your own bookkeeping business. You’ll need to register as self-employed with HMRC unless you are setting up a limited company. Then you’ll need to decide whether you want to work from home or in an office. There are likely to be more costs associated with setting up in an office space, with rental costs being one expense to consider. If you’re setting up at home, make sure you have a designated working area – you could turn a spare room into an office space, for example, or perhaps start at the kitchen table – and somewhere that you can store your clients’ paperwork. Then there are the practical aspects to consider, including buying a computer or laptop, purchasing accounting software and business stationery, and setting up a business bank account.Final thoughts on starting a bookkeeping business
Setting up your own bookkeeping business can be very rewarding, not only financially but as a lifestyle choice. By taking the time to think about how to start accounting and bookkeeping for a small business, you can be confident that you’ll be prepared for all tax requirements and ensure your business stays healthy. In addition to this, you’ll be providing an essential service to your clients, helping them to run their businesses smoothly and efficiently. Editor’s note: This article was first published in September 2020 and has been updated for relevance.The accountancy practice toolkit
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