How to start a bookkeeping business

How to start a bookkeeping business, step by step

1. 01

   Decide what you will and won't do

   Bookkeeping means recording transactions, reconciling bank and card accounts, and producing monthly reports a business owner can read. It is not tax preparation, audits or financial advice. Write down which of these you'll sell, because clients will assume you do all of them unless you say otherwise.

   If you plan to prepare tax returns for pay, the IRS requires a Preparer Tax Identification Number, which costs $18.75 a year. Many bookkeepers skip tax work and refer it to a CPA instead, which also turns the CPA into a source of referrals back to you.

2. 02

   Pick a certification path

   The BLS lists no license for bookkeeping clerks and says certification is "not usually required". It still helps a stranger trust you with their bank feeds. NACPB's bookkeeping certification costs $100 for the exam and certificate, and candidates need at least 75 percent on its accounting fundamentals course and exam.

   AIPB's Certified Bookkeeper designation is the other common route, with costs and requirements in its program booklet. Add Intuit's free ProAdvisor training if your clients use QuickBooks, because prospects will ask which software you know.

3. 03

   Set up your software stack

   You need an accountant view of every client's books, a way to collect receipts and statements, and a secure place to share files. Intuit Accountant Suite is Intuit's software for accounting firms, and its Core version has no monthly fee, so you can start without paying for an accountant seat.

   Know what your clients will pay for their own subscription, because it changes your pitch. QuickBooks Online Simple Start lists at $38 a month and the next plan up at $85, before any introductory discount. Pick one platform to master first rather than learning three at once.

4. 04

   Price monthly packages by volume

   Sell monthly packages, not hours. Tie each tier to the number of transactions and accounts you reconcile: a small tier for a freelancer with one bank account, a middle tier for a shop with payroll, and a larger tier for a business with inventory. Monthly pricing gives clients a known bill and gives you recurring revenue.

   Sell catch-up and cleanup work as a separate one-time project. A business that hasn't reconciled in a year needs that fixed before any monthly package makes sense, and it's often your first paid job with a new client.

5. 05

   Sign an engagement letter every time

   An engagement letter is the contract for bookkeeping work. It lists the services, the monthly deliverables and their due dates, the date by which the client must send statements and receipts, your fee, what's excluded (such as tax filing), and how either side can end the arrangement.

   Anchor has no monthly subscription for proposals and agreements; it takes $5 from each payment you receive, and card fees are paid by the client. Once the client signs, the proposal becomes the live agreement between you.

6. 06

   Insure and register the practice

   A missed reconciliation can cost a client real money, so carry professional liability insurance before you touch anyone's books. Insureon reports that small businesses pay an average of $88 a month for professional liability coverage, with annual premiums starting around $400.

   Get a free EIN from the IRS, open a separate bank account, and keep your own books in the same software you sell. Clients will ask, and it's good practice for your monthly close.

7. 07

   Launch a site and ask CPAs

   Your site needs your packages with starting prices, the software you support, your certification, an about page, reviews, and a form to book a free consultation that asks for business type, monthly transactions and current software. Replo builds that site and puts it live on your own domain, with a Calendly or Cal.com calendar embedded for calls.

   Replo doesn't send invoices or manage client files. Replo checkout can sell a fixed-price books review in USD. Then email ten local CPAs: they want clean books from their clients, and many would rather refer than do the monthly work.

What it costs to start a bookkeeping business

What it costs to start a remote bookkeeping practice with NACPB certification and free accountant software. Skip NACPB membership at first to cut $100.

Your first 30 days

1. Week 1

   Scope and certify

   • Write the services you'll sell and the ones you'll refer out.
   • Register for NACPB's course and book the certification exam.
   • Sign up for Intuit's free ProAdvisor training and accountant dashboard.
   • Get your EIN and a quote for professional liability insurance.

2. Week 2

   Package and paper it

   • Set three monthly tiers by transaction count and accounts reconciled.
   • Price catch-up work as a separate one-time project.
   • Write your engagement letter with deadlines, exclusions and fees.
   • Launch your site with packages and a consultation booking form.

3. Week 3

   Find the first clients

   • Email ten local CPAs offering to handle their clients' monthly books.
   • Tell past employers and friends who run businesses what you offer.
   • Run a free consultation with every reply and send a proposal.

4. Week 4

   Close the first month

   • Sign your first engagement letter and connect the client's bank feeds.
   • Finish a catch-up project or the first monthly close on time.
   • Send a one-page report and ask for a review.

Build your bookkeeping site

Frequently asked questions

What do bookkeepers do?

They record and classify a business's transactions and keep its financial records complete and correct, in the BLS's description. In practice that means categorizing expenses, reconciling bank and card accounts every month, and sending reports the owner and their accountant can use.

What hourly rate should a bookkeeper charge?

More than an employee earns, because you cover your own software, insurance and taxes. The BLS median for employed bookkeeping clerks is $24.36 an hour. Quoting a monthly package instead of hours rewards you for getting faster.

Is AI replacing bookkeepers?

Partly, for routine data entry. The BLS projects bookkeeping clerk jobs to decline 6 percent over its ten-year outlook as software automates routine tasks. Bookkeepers who own the monthly close, explain numbers to owners and fix messy books are the ones clients still pay.

Can I be a bookkeeper without a license?

Yes. The BLS lists no license requirement for bookkeeping clerks and notes certification is not usually required either. You only need an IRS PTIN, at $18.75 a year, if you prepare federal tax returns for pay. A certification still helps clients trust you.

Are bookkeepers still in demand?

Yes, though the field is shrinking slowly. The BLS still projects about 144,100 openings for bookkeeping clerks each year, all from people leaving the job. Small businesses that don't want a full-time hire are the natural clients for an independent practice.