How To Start Your Own Bookkeeping Business – Have you ever wondered what kind of income you can expect when you start a bookkeeping business? Is the financial market profitable?
The good news is that bookkeepers can earn a lot of money regardless of their current monthly expenses. Today we’re going to break down the traditional savings accounts and all the expenses you might need – from office supplies to a virtual assistant to a QuickBooks Online subscription for your customer.
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How To Start Your Own Bookkeeping Business
I didn’t use my book income as an example for this breakup because my business doesn’t have a writer like that. I also have my YouTube channel and some income is not enough, so I want to break down the income of the accountant for you so that you can better understand the income and expenses and real results.
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For this writer, I have him work part-time, or about 20 hours a week. You can be a full-time accountant, but what I’ve seen is that the accountants I deal with use it as a side hustle or a part-time job combined with other income.
The profit and loss statement is divided into two columns: monthly and yearly. I’ve done this so you can see the whole picture, because some things make more sense monthly than yearly.
When I create flat rates for these clients, I want them to be around $50 per hour. One thing to keep in mind when figuring out what to charge is the tasks you do for each client and how long these tasks usually take. It’s good for a little more than your average time on any job. The final decision is whether you are willing to work at an hourly rate that the flat rate will average for.
This account manager has eight clients of various sizes. It is important to understand the difference between clients based on the size of their company and the number of accounts you are involved in. With his biggest client, he works one day a week and pays $1,500 a month. There are a few people who pay $500 a month, a few people who get $400, and a few people who get $250.
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Work is divided into approximately 20 hours of billable time each week or 80 hours per month. Of course, you may have to spend some time working on your business, marketing, updating your website or doing your books.
The expenses of the secretary every month are low, which is why this job is so attractive to many people who are looking for a part-time hustle.
The most expensive thing that I can think of that accountants should use is QuickBooks software, which is the basis of your bookkeeping. You can pay your customers for their list, but I personally like to add them to my financial plan.
This offer is attractive to customers so they don’t have to worry about managing the account. Plus, as the bookkeeper, I got QuickBooks for them cheaper than they expected. My ProAdvisor QuickBooks Online Plus discount is $35 per month per customer. So this account manager who has eight clients spends $280 per month to maintain their list.
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Another expense that a bookkeeper can have is hiring a virtual assistant to do some business, invoicing, answering emails or other small tasks. This accountant has a virtual assistant who works for him 10 hours a month at $20 an hour, which comes to about $200 a month. One benefit to hiring a virtual assistant is that you can outsource any additional work to you so you can focus on making books for your clients and growing your client base.
Account managers use their phones for business, talking to customers, scheduling appointments, and more. You will likely use your cell phone as your business phone, so it is used half time for business and half time for personal use. I spent $50 per month on phone usage in this example.
Business insurance is important to keep your personal belongings out of reach if the customer is dissatisfied and will judge you for any reason. The good thing about insurance is that it’s cheap, and it pays for what you need. I was spending $46 a month on insurance.
Business people need a good Internet connection, and again, you probably use it for both personal and business purposes, so I estimate $30 per month for business.
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I don’t really spend anything on advertising, but sometimes it’s necessary. I spent $25 a month on advertising for this bookkeeper, because these costs are very low and only select expenses.
All you really need for office equipment as an accountant is a computer and maybe some paper and pencil. You may have to buy supplies such as ink here and there. We’re budgeting here at $25 a month, but the fact that all you really need is your computer to make a great business!
As an accountant, unless you are trained as an accountant, you will want to hire an accountant to do your annual taxes. You’ll be looking at $300 a year, which, broken down, is $25 a month.
A computer is an accountant’s best tool because you can do anything you want with it. Here are some things I recommend you save money on every month if you need to replace your old computer down the road. I estimate that this accountant spends $600 on a computer every two years, which works out to about $25 per month.
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It is important to keep up with technology and to know the business of accounting. An account manager does not require external certification or credit, but it is always helpful to grow yourself in your field. Maybe you decide to take a course a year for $300, which breaks down to $25 a month.
I created my website on Wix, and it is $17/month to host it there, so I spent money on this example. You can rent it and have someone build it for you or handle it for you, so the budget may be a little different depending on what you like to do.
Depending on which state you live in, the cost for a business license will vary. In Oregon, for example, it is $150 a year to apply for a business license, which costs $12.50 a month.
You can use your personal email at least at first, but it is good to separate business and personal from time to time. Email marketing is still cheap at $6 a month.
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I usually review my household expenses at the end of the year with my accountant. To figure out what your home office “debt” is, you’ll take the total square footage of your home and subtract the area of your intended office space.
If you don’t have an office for business, it’s usually not something you can write off, but it’s best to work with your accountant on this particular expense. . I didn’t put it directly in the budget because it was a deduction rather than a debt. You already own your home, so you don’t pay for the office every month directly.
Personally, our health insurance goes through my husband’s employer, so I don’t pay anything for him through my business. However, it is something to consider as a contractor, and it is very important every month.
With the example I worked with today, the total expense is $767 per month, which totals $8,736 per year.
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His monthly income is $4,050, and his monthly expenses are $767, making him an income of $3,284.
As a part-time job, I think that’s a good monthly profit, and I divided it by the hours you work, and it comes out to $41 an hour, which is good salary.
As an equivalent, $41 an hour is around $82,000 a year if you work full time. Now, in this example, the secretary is only working part time and doing half of that, but it’s good to see what the income is. This gives you an idea of the value of the secretary!
The more niche and need you become in the specialty, the more valuable you will be and the more you can pay. You can also plan to spend less each month to keep more of your income. Find a balance between cutting enough debt but not spending money on unnecessary things.
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When I first started, I wanted to keep my expenses as low as possible to have the biggest profit, but then I realized that if I still pay my internet or phone, I
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