how to start bookkeeping business

If you have 6 rooms in your house and you use one of them as your office, you can claim back 1/6th of many of your utility bills (eg. electricity and gas). They can actually give you loads of work if you are struggling to find your own clients. Their work is in interpreting the books, advising about tax, and preparing statutory accounts for the Inland Revenue. The next important point to consider is the size of business you want to target.

  • The last step to take is to start to build your client base.
  • It also makes sure that all records are being processed correctly and tax and legal requirements complied with.
  • 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).
  • Some bookkeeping businesses offer fixed price packages – for example an Accounting and Bookkeeping package and a Payroll package.
  • Ensure all your devices have anti-spyware software to protect your business and your clients.

PI covers legal costs and expenses incurred if you provide incorrect or inadequate advice which causes your client financial loss. There are other types of insurance, and depending on how you plan to operate your bookkeeping business, you may need more than one type. I’ve written a guide to business insurance where I cover the main types of insurance or you can contact Simply Business who is a broker to discuss your specific needs. This should provide all the information a prospective client needs, such as your experience and qualifications, the services you offer and how to get in touch with you. It should be factual and easy to navigate but also, don’t be afraid to inject some personality into the content.

How will you decide on the level of fees to charge?

That means you need to put money aside for your tax bill and you need to be disciplined. It’s important to get into the habit so you don’t get caught out when tax time rolls around. In most cases you can only offset a proportion of your expenses. For example, you can offset the rental cost of a room in your house, but not the whole house.

  • FreeAgent, for example, automates tasks such as inputting invoice data, reconciling bank transactions, running payroll, completing VAT and Self Assessment tax returns and even filing them to HMRC.
  • You may be able to offer a cheaper or more personalised service, for example.
  • Perhaps this will be trial and error at the beginning with your first few customers.
  • This allows you to calculate and pay your own taxes each year.
  • That way, it’ll be clear to potential clients what you offer them.

On top of this, since you’ll be working with client’s private data, you’ll likely need to pay a data protection fee to the UK government. Altogether, freelance bookkeeping is an excellent opportunity to profit from your skills. If you enjoy balancing books and organising business finances, becoming a freelance bookkeeper could be the right path for you. Therefore, given the amount of money you could be liable for and that not having insurance can make it difficult to do business, you should consider obtaining insurance upfront. Keep in mind that different policies will provide varying coverage levels at different prices.

What range of services will you offer

Ask if your local library would accept them in their local services section. They are there to promote local businesses and you offer a service that will help local businesses. Contact all local networking groups and attend their breakfast meetings. If you get the chance of a 5 minute speaking slot, grab it.

As a lot of your work will be conducted remotely, you will need an electronic signature (e-sign) tool. Having this tool will save you a significant amount of time compared to physically mailing each document when a signature is required. An e-sign tool allows you to email documents that need signing to your clients and receive an electronic signature immediately. You can expect to pay between £10 and £30 per month for this software. Determining your target market and the typical customers your business will likely attract is a key part of your business plan and should be considered before you set up your business. Your work as a bookkeeper in public practice falls under the scope of the Money Laundering Regulations (MLR).

Types of Customers

Please do not copy, reproduce, modify, distribute or disburse without express consent from Sage. These articles and related content is provided as a general guidance for informational purposes only. Accordingly, Sage does not provide advice per the information included. These articles and related bookkeeping for startups content is not a substitute for the guidance of a lawyer (and especially for questions related to GDPR), tax, or compliance professional. When in doubt, please consult your lawyer tax, or compliance professional for counsel. This article and related content is provided on an” as is” basis.

Researching other bookkeeping businesses in detail to determine ways their business succeeds and what they could do to improve their business is another way to encourage your own business’s success. Consider your own skills and your previous experience and training when considering the services you will offer. You need to always stay up to date on laws and regulations regarding business finances, changes in payroll and taxes, and even the different software and programmes that are released. If you don’t do this, it could create financial issues for the company, or even result in legal implications. Although many of their tasks are similar, a bookkeeper and an accountant have very distinct roles from one another.

Complying with the Companies Act is a legal requirement for all bookkeepers and accountants in the UK. You must ensure that the businesses you work with keep adequate accounting and financial records, including money received, money spent and any assets. The company must keep records for three years if they are a private company and six years if they are a public company. Provided you can keep your fees affordable this type of client may be well worth cultivating – as they grow and prosper so you can increase the range of services you offer them. As with every start-up business, you should ensure that you have a thorough business plan, with particular attention paid to the financial elements when starting your bookkeeping business.

You may also find other times of the year are quieter and you have less work, negatively impacting your profits. If your business has five or more employees, risk assessments are legally required. Your risk assessments should identify any potential hazards and risks and how these can be reduced or eliminated.

How much should I charge?

Small business and self-employed people around the UK seek bookkeeping services to stay on top of their finances. This career offers a flexible lifestyle that you could conduct from home. The law takes money laundering very seriously and places special responsibilities on certain professions the government considers vulnerable to being used to launder money. These include individuals that provide external accounting services, which in practice applies to most self-employed bookkeepers working in the United Kingdom.

Their reaction to your proposed charges would also be valuable – they will quickly let you know if you are too expensive and if they bite your hand off, maybe you’re a bit too cheap! You will also be able to find out which services are likely to be most in demand. Take advantage of courses and training to learn new skills and expand your service offering. Don’t be afraid to increase fees as your capabilities grow. Online accounting software will let you look at accounts at the same time as your client. This means you can talk through their questions over the phone, reducing the number of meetings you have.