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How to Start a Bookkeeping Business

The bookkeeping business can be a very successful business idea! If you wish to start your own, read this article to learn more!

The bookkeeping business can be a very successful business idea! Many business owners aren’t that good at bookkeeping themselves or simply don’t have time for it.

Bookkeepers are responsible for maintaining financial records and providing up-to-date financial information about their clients – businesses, charities or voluntary organisations. They also prepare for year-end tax and VAT returns, manage cash flow, complete income and purchase ledgers, process data and more. 

If you wish to start a bookkeeping business, this article will help you understand what qualifications you need, how to set up your prices, how you can promote your business and more. 

image showing bookkeeping

Qualifications and skills

To start a bookkeeping business, you don’t need a university degree. Even though most bookkeepers are members of a professional body that requires them to hold recognised bookkeeping qualifications, those qualifications are at a diploma or certificate level. Also, a lot of bookkeeping courses can be studied online and the prices start from several hundred pounds. To find out more about the courses, click here.

If you are a member of IAB (International Association of Bookkeepers) or ICB (Institute of Certified Bookkeepers), you are required to complete at least 30 hours of continuing professional development. To complete those hours and keep up to date with any trends and developments in the industry, you can attend events, webinars, workshops, read professional magazines, online journals and the latest documents published by HMRC. 

When it comes to skills you need to be a bookkeeper and run your own business successfully, these are a few:

  • Attention to detail
  • Organisation skills
  • Tech-savviness
  • Communication skills 
  • Time management
  • A way with numbers
  • Problem-solving skills

Professional bodies and practising licences

The Institute of Certified Bookkeepers (ICB)

This is a professional body representing bookkeepers in the UK. They offer different memberships depending on the qualifications you hold and the annual fee ranges from £75 to £170. As a member, you can access things like legal advice or discounted marketing opportunities. 

If you’re a member of the ICB and want to start your own bookkeeping business, you must hold an ICB practice Licence. This licence is renewed annually and fees are available on request from the ICB. More information is available here.

The International Association of Bookkeepers (IAB)

An international body representing bookkeepers. They also offer different memberships depending on the qualifications you hold and the annual fee ranges from £115 to £140. They also charge a one-off £33 administration fee when joining. Once you’re a member, you can use benefits such as discounted professional indemnity insurance and continuous development opportunities a well as technical and business support. 

If you’re a member of the IAB and decide to trade independently, you must apply for AML (Anti-Money Laundering) Supervision which costs £175 a year. 

Money laundering regulations

Under the Money Laundering Regulations 2017, if you’re not a member of a professional body and provide accountancy (including bookkeeping) services, you must register with HMRC as an accounting services provider.

As a bookkeeper, you have to check if your clients are laundering money through their business. To do so, you might want to check your clients’ official documentation such as passports to make sure that they are who they say they are. You can read more about your responsibilities under money laundering supervision here.

Contracts for services

When you find a new client, before providing any services to them, you should issue them with a contract that explains the rights and responsibilities of both parties and includes things such as:

  • Payments and penalties
  • Your VAT registration number
  • Complaints resolution procedure
  • How the contract can be terminated

Privacy and data protection

Under the Data Protection Act 2018 and the General Protection Regulation (GDPR), any personal information that you collect about your clients must be stored securely and used only for the purpose it was collected. You also need to pay an annual fee of £40 to the ICO.

Prices

Bookkeepers in the UK charge around £25 per hour. However, when choosing your own prices, the average is just a guidance. You should consider things like the area, businesses you want to work with and your own experience. 

Promoting your bookkeeping business

If you don’t know anyone who needs a bookkeeper before starting your business, finding your first clients can be difficult. Just like any other business, a bookkeeping business has competition. To stand out, you need to find your unique selling point and create your marketing strategy around it. 

Here are some tips on how to find clients:

Use social media

Every single business can be promoted on social media! Find out what platforms your potential clients use and create some engaging and educational content. Be consistent, post regularly and show the value someone can get from having you as part of their business! 

Reach out to potential clients

If you know some companies that you would like to work with, don’t be afraid to reach out! They might say no this time but they might contact you again in the future or recommend your services to their connections.

Networking

Networking events can be a great place to meet many business owners who might be interested in your bookkeeping business. Ask if they ever struggle with keeping up with all the financial data within their business and explain how you could help them.

Now that you know quite a few things about starting a bookkeeping business, maybe it’s time to actually start it? If you need advice and guidance in this journey, contact us now and one of our business advisors will be happy to help! 

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