HOW TO START YOUR OWN BOOKKEEPING OR ACCOUNTING BUSINESS
Every business needs a bookkeeper/accountant. Business owners today realise more than ever before that if they are not careful about their finances, they soon won’t be in business. As it can be costly for smaller businesses to appoint a full-time bookkeeper or accountant, outsourcing this function has become very attractive to business owners and a great opportunity for bookkeepers or accountants to start up their own bookkeeping or accounting businesses.
The importance of bookkeepers and the role they play
A client not only wants to pay an independent bookkeeper or an accountant to balance their debit and credit transactions. The client will be paying you for your expertise, accuracy, loyalty, honesty and integrity, and your ability to handle their affairs with confidentiality and professionalism.
Although a vast range of accounting software packages is available to process captured information quickly and accurately, the software is unable to detect where transactions have been allocated incorrectly, omitted or have been duplicated. A lack of internal controls in a company could lead to fraudulent transactions. The bookkeeper or accountant plays a vital role in the accurate reporting of the affairs of the client.
Consider your skills
What skills do you need? Which of these skills do you already have? What do you need to do to get those skills which are essential in your business? Your starting point will be to get yourself well educated. The Institute of Certified Bookkeepers (ICB) offers valuable qualifications in this area. The ICB offers four main study programs which include the Accounting Programme which has qualifications that range from the level of a junior bookkeeper through to a financial accountant.
Consider your resources
Which resources do you currently have? Think about equipment, your home office, your talents and skills as well as personal characteristics. The experience which you have gained (which can be added to your CV) is an important marketing tool. Clients want to know that you have experience in their line of business. Years worked in the corporate or business world are never wasted, and through this you would have gained valuable knowledge and experience which can be used in your own business.
Bookkeeping and accounting
If you’re getting paid, congratulations! You’ve created something that people wanted enough to trade money for. To make sure your business stays healthy, and help you focus more on the business than on keeping the lights on, you will want to keep records of money moving in and out of your business. Welcome to the fascinating world of bookkeeping and accounting.
What is bookkeeping? What is accounting?
Historically, there was a distinction between the functions of bookkeeping and accounting, but the distinction is weakening as more of both functions are done by computers rather than people.
Bookkeeping is recording details about transactions to the books (ledgers) of the company. It has historically been seen to be work done by detail-oriented specialists, but not something which required a higher degree.
What are “books?”
Your business keeps many types of records. One category of these, which describes the movement of value into and out of the business, is called “books.” The books track value, not necessarily always money, but for convenience’s sake we’ll talk about money rather than the long list of valuable things a business can keep records about
The physical manifestation of the “books” is different at every business—at some businesses it is a literal book with a physical ledger of transactions, at others it is an Excel file, at others it is distributed among multiple different accounting systems.
VIRTUAL BOOKKEEPING: EVERYTHING YOU NEED TO KNOW
Small business owners can find it challenging to keep an accurate record of their financial transactions. Bookkeeping can take up a lot of time. It also requires a certain degree of specialized knowledge. You could consider delegating your company’s accounting work to one of your employees or even think about hiring a part-time accountant. However, a virtual bookkeeping service provider could offer a better solution.
What is virtual bookkeeping?
Virtual bookkeeping has the following attributes:
The person who keeps a record of your company’s financial transactions will not work from your office. Instead, the accountant will function from a remote location. You may never meet your virtual bookkeeper in person. All your interactions could be through messaging apps or video calls.
An accounting software package will maintain your company’s’ accounting records. QuickBooks Online and Xero are popular options. However, there are several other good alternatives, as well.
The virtual bookkeeping service that you hire will usually provide you with monthly bookkeeping for your bank accounts, credit cards, loans, and payment processors. Typically, virtual bookkeepers charge their clients a fixed monthly sum.
How does virtual bookkeeping work?
Nowadays, more and more small businesses are using virtual bookkeeping services. This practice has gained popularity for several reasons. Switching to a virtual bookkeeper can provide entrepreneurs more time to focus on their core activities. Additionally, cloud accounting, as virtual bookkeeping is also known, can help to boost your company’s profitability.
Let’s understand how the virtual bookkeeping process works
The first step would usually involve a video call when you would discuss your company’s accounting assignment. At this stage, it’s a good idea to tell the person or the firm that you intend to hire about the financial aspects of your business. How many bank accounts do you have? Have you taken any small business loans on which you are making regular payments?
What does a virtual bookkeeper do?
Every month, they would furnish you with a set of reconciled accounts as well as financial statements. It would be the virtual bookkeeper’s responsibility to categorize all your transactions and to keep your financial records up to date.
Reasons To Explore A Career In Accounting
A career in accounting has a lot to offer!
Whether you’re planning your accounting career or exploring the career pathways open to you as a young professional, accounting is a field you need to take note of.
You’ll be in-demand
No matter where you live or how the economy is doing, there is going to be a need for accountants. That’s because governments, businesses and not-for-profit organizations (and sometimes individuals, too) continually need accountants and bookkeepers to manage their budgets, deal with taxes, do financial reporting, complete audits…and the list goes on.
Through good times and bad, accountants help companies of all sizes create strategic plans to maximize success and limit chances of failure. Without accounting it would be very difficult for businesses to analyze their financial performance, which would make it harder for organizations to make smart decisions for the future.
You can make it your own
Accountants work in all kinds of places – you might find them in various departments within local, provincial/territorial and the federal governments; corporate and commercial businesses; charities and not-for-profit organizations; professional associations; or educational institutions.
Accountants may actually work full-time within an institution or they may work for multiple clients at the same time (either on their own or as part of an accounting firm). It depends on where the demand is and what your preference is. What’s nice is that there is often enough flexibility for you to shape your career into what you want it to be.
Incredibly Effective Bookkeeping Tips for Small Businesses
According to a survey stat shared on www.waspbarcode.com, only 40% small entrepreneurs feel that they are aware of business accounting. Being a successful business owner and running a trade takes years of expertise, well-adopted strategies, and organized mindset. You cannot expect your business to run smoothly if productivity gets hampered or in case there’re accounting loopholes. This is where the significance of a good accounting practice comes into play
This is pretty evident that the bookkeeping industry is pretty progressive and one can rely on its expertise. But you still need to have a fair knowledge of accounting, based on your business model. Self-awareness is the most effective tools when it comes to managing business accounts seamlessly.
Manage all major expenditure separately
Create a separate fund for office repairing, product maintenance, office supply materials, inventory expenses and the likes. This will help you maintain the books of account in a smart and better way. Since major expenses are the ones that are of biggest priority, prioritizing this aspect is a sign of good bookkeeping.
Prepare yourself for expenses related to tax
There can be no debate on this matter that paying tax is a mandatory practice. It is to be followed by each and every business house. Thus, it is also quite evident that the amount of tax to be paid at the end of the year is supposed to be kept aside separately, so that paying the taxable amount doesn’t prove to be a challenging or intricate task for the business owner. A well-planned preparation along with the availability of enough funds to pay all taxes seamlessly is something which is absolutely essential for healthy bookkeeping.
Consider bank reconciliation periodically
Bank reconciliation is one of the most important practices to be considered when it comes to bookkeeping. Always keep track of your bank account and see whether it matches the amount recorded in the book. Consider reconciling your bank statements every month so that there remains no chance of any discrepancy in the long run.