So if taking the plunge and actually setting up your bookkeeping business is on your to do list this year then here are some tips to consider when getting started.
- Become a supervised Bookkeeper
One of the fastest ways to gain credibility with potential clients is to prove you have the credentials to do the bookkeeping work. Once you are a member of a professional body you earn the right to put the relevant letters behind your name, which you can display on your business cards and website. It is also a legal requirement to ensure you are registered with an approved supervisor such as the IAB for your Anti-Money Laundering Supervision. In addition you should also consider getting certified in a few of the leading software providers.
- Create a business plan
Writing a business plan is something everyone should do before actually starting their business. During the process you are able to think about every aspect of your business, such as what products and services you will sell and who you will market those products and services to and who your competition is. You will also need to create a financial plan that includes a 12-month Profit and Loss and projected Cash Flow and Balance Sheet.
- Incorporate your bookkeeping business and choose a business name
When starting any business, there are several administrative tasks that must be done before you can start servicing customers. This step is an important one because it establishes your business as a legitimate one. It also helps to limit your personal liability; if your company is ever sued, the only assets that could be taken away are the business assets, not your personal assets like your home or your personal bank accounts.
- Set up your business operations
It’s important to separate your business operations from your personal finances in order to take full advantage of the liability protection given to you during the incorporation process.
Business banking; shop around with the high street banks and find out which will give you the best terms, for example, longest period of free banking.
Insurance; make sure you have the right Professional Indemnity cover in place and Employers Liability, if applicable.
Mailing address; even if you are planning to work from a home office, a business mailing address is well worth considering. It is relatively inexpensive to have a registered PO Box.
- Get the right bookkeeping software
Deciding which bookkeeping software you are going to use for your own business should be a fairly simple decision but make sure you get a good deal, for example, Xero will give you one free licence which you can use for yourself if you register with them as a business advisor. Another tool, which is worth considering, is a Practice Management Tool, such as Senta, this will help you organise your client’s work.
- Set up your home office
When you’re first starting out, one way of keeping your costs down is by setting up a home office. If possible, plan to meet your clients at their office or virtually. Remember you can deduct a proportion of your rent and utility bills from your personal tax return.
Having a website is a must, there are many solutions to fit within your budget. Make sure you clearly advertise exactly what you do and make it easy for a potential client to contact you. Then there are many methods, which can be used, for example, networking, social media, word of mouth and referrals. A combination of all these will work but the most important thing is to be consistent. If you sign up to a networking group then you must go to every meeting, if you post on social media make sure it is regular content.
Love to know your thoughts,
Sarah Palmer, FIAB, owner of Women Who Count
Further information about being a self-employed bookkeeper and supervision under the Money Laundering Regulations can be found here: www.iab.org.uk/join-the-iab/important-information-self-employed-bookkeepers/.
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