How to Start a Bookkeeping Business

Woman doing business taxes
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Self-employed individuals and their employees account for about 30 percent of the national workforce, according to the Pew Research Center. Many of them work from their homes. Why not become one of them and start a bookkeeping business to serve these entrepreneurs?

What the Profession Involves 

Bookkeepers keep financial records and are proficient in single-entry ledger work for small businesses. Their clients provide them with their receipts and invoices, and bookkeepers then post these records on paper or in a computer file.

Many self-employed bookkeepers earn between upward of $25 an hour, but it can depend on location and workload. Some bookkeepers offer additional services such as tax preparation, increasing their earnings. Some might take on larger clients, which would mean a greater volume of work but it might also mean having to prepare more sophisticated financial reports.

Job Outlook 

The bookkeeping profession and bookkeeping services are expected to grow by 12 percent through 2016, according to the Occupational Outlook Handbook published by the US Bureau of Labor Statistics. No formal education or training is necessary, although getting a certification from the American Institute of Professional Bookkeepers can't hurt. The median wage for bookkeepers is around $31,000, but it is not unheard of for determined self-starters who network, advertise and do good work to earn much more. This is among the more potentially lucrative business ideas for home.

Pros of a Bookkeeping Services Home Business

  • Many entrepreneurs aren't good at handling their money -- that's where you come in.
  • It's a welcoming profession because you are relieving a client of perceived drudgery.
  • Bookkeeping services can be a true at-home business.

Cons of a Bookkeeping Services Home Business

  • The occasional slippery client may ask you to omit certain transactions that come to your attention. Experts say that you will not last long in the bookkeeping business if you skirt the law. 
  • Family demands at home could be distracting.

What You Need to Get Started 

  • You'll need a love for numbers, a meticulous nature, honesty and skill at basic bookkeeping practices.
  • You should have the ability to network and drum up business.
  • Membership with your local chamber of commerce is highly recommended as a source for new business and for projecting a professional reputation.
  • Have business cards made and set up a website with testimonials and references from satisfied customers.
  • You'll need a computer with the necessary spreadsheet and accounting software to handle the tasks you want to offer your clients. 

Real-Life Example 

Former controller Steven R. Hinds writes in the American Institute of Professional Bookkeepers newsletter that he began his own business charging just $10 an hour for bookkeeping and tax preparation. After gaining 10 clients in the first six months, he earns between $25 and $200 an hour and has more than 100 clients, netting $150,000 a year.

Becoming an independent bookkeeper is something that works well on a freelancing basis. See How to Get Started in Freelancing for more information.