Guide to Starting a Business - Bookkeeping

Description of Job

• Handle bookkeeping, accounting, and record-keeping services for a small business.
• File monthly, quarterly, and annual tax forms, or coordinate with client’s tax accountant or attorney to provide necessary information for tax purposes.

The Need

Every business has to maintain records of receipts, expenditures, sales taxes collected, income tax withheld, and many other details of interest to local, state, and federal governments as well as to banks and other lenders. Other records relate to expense accounts, depreciation, inventory, accounts receivable, accounts payable, and various benefits.

Yet few small businesses can justify putting a full-time bookkeeper or accountant on the payroll, and some larger companies may prefer outsourcing the job to save money or to establish a presumably independent arm’s-length relationship.

Challenges

In addition to strong bookkeeping or accounting skills and experience, you’ll need to be able to work with many different types of businesses and clients.

The lexicon, accounts receivable, and accounts payable will be much different at a restaurant than at a pet shop; the types of tax forms and information required by a DBA or partnership may be not the same as those required for a corporation.

You may be called on to fill in for vacation absences or for special projects; in such cases, you will have to follow someone else’s plans and methods exactly.

Outside or part-time bookkeepers and accountants must demonstrate professionalism and discretion, keeping private the proprietary information of their clients.

Make sure your bookkeeping and accounting skills are up-to-date. If your skills and knowledge are limited in a particular area, you should probably decline a related job rather than do damage to your clients and to your reputation.

Know the Territory

You’ll need to keep current on accounting practices and on the local business environment. Make contact with local chambers of commerce to learn about new and expanding companies.

Make sure you are capable of working with state-of-the-art accounting software.

How to Get Started

Identify possible clients by contacting your local chamber of commerce and other business associations; place ads in newsletters to their members. Send letters to new and expanding companies.

You may be able to post your business card or a flyer at area business supply stores, including some of the major chains.

Up-front Expenses

The primary expense will be advertising and promotion. You may also want to have a listing or ad in the Yellow Pages under “Accountants,” “Bookkeeping services,” or “Temporary services.”

How Much to Charge

You should charge by the hour. Investigate companies in your area that perform similar services.

Legal and Insurance Issues

Special notes: In dealing with your clients’ property, seek to limit your liability for damage or loss to the actual replacement value of items in your possession.

You should protect yourself against claims for sentimental value or loss of use.