For many small business owners, the daily demands of running a company leave little time for financial upkeep. This creates an opportunity for skilled professionals to offer support. By providing bookkeeping services, you can empower businesses to make informed decisions and focus on their core operations and growth. Let’s take a deeper look at how to start a bookkeeping business.

What is bookkeeping?

Bookkeepers work with businesses to record and categorize transactions (such as business expenses), reconcile the business bank account, pay bills, and monitor cash flow. They also generate basic financial statements, such as profit and loss statements and balance sheets.

Bookkeeping and accounting are related but separate. Accounting uses the financial data from bookkeepers to provide useful insights. Accountants analyze financial statements to advise on business finances, prepare and file tax returns, and review financial records for accuracy and compliance with rules. They also help with financial forecasting and planning. Both bookkeeping and accounting are important for any thriving business.

What certifications does a bookkeeper need?

Although no specific licenses are mandatory to be a bookkeeper, certain certifications and skills can boost your reputation, marketability, and income. A strong understanding of accounting principles and a mastery of bookkeeping software is most important. Here are a few certifications to consider acquiring as you start your bookkeeping business.

• Certified Bookkeeper (CB) certification. Offered by the American Institute of Professional Bookkeepers (AIPB), this is a nationally recognized designation. It typically requires two years of full-time bookkeeping experience and passing a comprehensive four-part exam, demonstrating a high level of competence.

• Certified Public Bookkeeper (CPB) certification. Provided by the National Association of Certified Public Bookkeepers (NACPB), this professional certification involves coursework and exams covering accounting fundamentals, QuickBooks Online, and payroll, along with practical experience requirements.

• Accounting software certification. Mastery of business accounting software is crucial, and becoming certified is an excellent way to increase your credibility. You can opt to become a QuickBooks ProAdvisor or participate in partner programs such as those offered by FreshBooks, Xero, and Zoho.

• Associate’s or bachelor’s degree. While not strictly necessary for many bookkeeping roles, a formal college education provides a foundation in financial management and business operations. A degree can strengthen your analytical skills and open doors to handling more sophisticated client needs.

How to start a bookkeeping business

1. Write a business plan
2. Select a business structure
3. Get insurance
4. Choose software
5. Create a website
6. Offer productized services
7. Find clients

Starting a successful bookkeeping business takes planning and action. Here are the main steps for how to start a bookkeeping business.

1. Write a business plan

A concise business plan clarifies your vision, defines your target market, outlines your services, and helps you project your financial needs and goals. A business plan isn’t just a document for investors; it’s a guide for your company’s growth and decision-making.

For a bookkeeping business, your business plan should detail your core services (e.g., monthly bank reconciliations, payroll, accounts payable and receivable, etc.) and any specialized offerings, such as bookkeeping software training. Clearly define your pricing model, whether you will charge hourly, offer fixed monthly packages, or use value-based pricing.

Your business plan should also specify your chosen technology stack (i.e., the bookkeeping software and other tools you use) and outline your marketing strategy. You will want to factor in startup costs and consider your scalability plan as well: How will you handle growth? Will you hire staff or remain a solo practitioner? What systems will support this growth?

2. Select a business structure

Your business structure affects your liability, taxes, and the paperwork you will need to manage in your bookkeeping business. Sole proprietorships and general partnerships are unincorporated entities. This means there’s no legal separation between you (the owner) and your business. Without this distinction, you’re personally responsible for the losses, debts, or liabilities of your own bookkeeping business.

Limited liability companies (LLCs) and corporations are incorporated business entities. Forming an LLC is generally simpler than forming a corporation. LLC’s benefit from pass-through taxation, where profits are taxed only at the owner’s personal level.

An attorney and a tax professional can offer valuable guidance when you’re deciding which business entity type is best for you. Once you’ve made your decision, you will register your business through your state’s Secretary of State office or business division and receive a business license.

You may also need to obtain an employer identification number (EIN) from the IRS; this acts as your business’s federal tax ID number and is useful even if you aren’t hiring employees right away. Whatever your business structure, keeping your business finances separate from your personal finances will help with filing taxes.

3. Get insurance

Bookkeepers deal with highly sensitive financial data, and even the most diligent professional can make an honest mistake. Adequate insurance protects both your business and personal assets.

Errors and omissions (E&O) insurance, also called professional liability insurance, is essential for bookkeeping businesses. It’s designed to protect you from claims of negligence, errors, or omissions in the professional services you provide. For example, if a data entry error on your part leads to a client incurring a penalty from the IRS, E&O insurance can cover legal defense costs and any resulting settlements or judgments. This provides you with personal liability protection.

Beyond E&O insurance, consider other types of business insurance, including:

General liability insurance

This covers claims of bodily injury or property damage occurring on your business premises or due to your business operations. While less critical for a virtual bookkeeping business, it can still be a good idea, especially if you ever meet bookkeeping clients in your physical office or operate from a coworking space.

Cyber liability insurance

Given you’ll handle sensitive digital financial data such as bank details and transaction histories, cyber insurance is increasingly important. It’s designed to protect you in the event of a data breach, covering costs like client notification, credit monitoring services, data recovery, and legal fees associated with a cyber incident.

4. Choose software

The software you choose for your business infrastructure will define the range of services you can offer and the quality of your work. It is therefore important to invest in the right tools. You will need several types of software, which you can consider part of your startup costs.

Accounting software

To manage your clients’ business finances, you will need accounting software that can record and organize all of your clients’ financial transactions. QuickBooks Online is the industry standard for small businesses. Xero, FreshBooks, and Wave are popular alternatives.

Communication

For secure client communications channels, email, a business phone number, and Zoom or Google Meet can meet your needs.

Document management and secure file sharing

This is essential for securely exchanging sensitive financial documents (such as business bank account statements) with clients and storing records. Features include strong encryption, audit trails, version control, and client portals for easy, secure access. Solutions like Google Drive (with Google Workspace), Dropbox Business, and Microsoft OneDrive offer encrypted cloud storage.

Project management

For staying organized, project management software is essential. Asana, Trello, and ClickUp are a few common options. You can also opt for software made specifically for accounting professionals (e.g., Karbon or Canopy) to keep track of client deadlines, recurring tasks, and internal workflows.

5. Create a website

Build a website to serve as your digital storefront and primary marketing tool. It’s often the first impression potential clients will have of your business, so it needs to be professional and informative. Ensure your website has a clean design that is easy to navigate and can accommodate mobile devices. List the accounting and bookkeeping services you offer, with descriptions of your packages or a clear “how to work with me” section.

Once you have satisfied customers, feature testimonials or short case studies—with client permission—to show how you have helped your clients. You may want to start a blog where you share tax tips or insight on small business growth. This is a great way to demonstrate your expertise. Check out other bookkeeping businesses to determine how your own business is different, and emphasize that.

Shopify is a powerful platform that enables you to create an attractive and functional website, even for service-based businesses. While widely known for powering ecommerce stores, Shopify’s robust website builder and flexible app ecosystem can create an online presence for your bookkeeping service. You can integrate apps for online scheduling, client intake forms, and even list your services as if they were products, making the process smoother for potential clients.

6. Offer productized services

To simplify your offerings, provide value, and create more earning opportunities, you may want to “productize” some of your services. Hourly billing can feel unpredictable to clients. Instead, try creating fixed-price packages for repeatable services. This turns your services into clearly defined “products” with set deliverables and flat fees.

Some examples of productized services include:

• Tiered monthly packages. Packages can offer different levels of service, such as a Basic package (bank reconciliation, monthly P&L), a Standard package (Basic plus accounts payable/receivable), and a Premium package (Standard plus payroll, deeper financial analysis, quarterly consultations).

• One-time clean-up projects. Many new clients come to bookkeepers because their past records are a mess. Offer a fixed fee for bringing disorganized or outdated books up to date.

• Software set-up and/or training. Offer a flat fee for setting up a client’s accounting software from scratch, customizing their chart of accounts, and training on how to properly use it for their business needs.

7. Find clients

Building a consistent client base is an ongoing effort. Focus your time in places where you can find your target audience so that you can attract prospective clients.

Networking

Join your local Chamber of Commerce, participate in Business Network International (BNI) chapters, or attend local entrepreneur meetings or networking events. Online, participate in LinkedIn groups and forums for small business owners. Offer helpful advice without overtly selling, and build social connections.

Referral partnerships

Cultivate relationships with professionals who serve your target market but don’t offer bookkeeping. This includes certified public accountants (CPAs) and tax preparers (who often need reliable bookkeepers to refer clients to for ongoing record-keeping), business coaches, financial advisers, and web developers. A strong referral network can be your most consistent way to cultivate more clients.

Online presence

Your website is most important, but you can create a Google Business Profile so you’ll be listed in local searches. Publish blog posts, create short videos, or offer helpful guides on financial topics that your target audience cares about.

Certifications and directories

If you have earned certifications like QuickBooks ProAdvisor or Xero Advisor, make sure your profile is optimized in their respective online directories.

Direct outreach

Identify the types of businesses you want to serve (such as small online clothing boutiques) and determine their needs. Then, reach out with a tailored message about how your bookkeeping services can benefit their business.