How to Start a Virtual Bookkeeping Business
I’m going to tell you my story on how I built and grew my virtual bookkeeping business. But, first, let me tell you a bit more about me and how I came about to start a virtual bookkeeping practice.
About Cathy Iconis, CPA
I’m a CPA (not a requirement to have your own bookkeeping business) and I started my career working for a local CPA firm in Atlanta, GA over 15 years ago. My mission was always to help small businesses through my accounting knowledge. I gained experience in forensic accounting, auditing, recruiting, and using technology to help streamline operations.
I then joined a global construction company working directly with executives providing management reports and helping team members translate the numbers so they can better manage their projects.
After a few years, I got pregnant and wanted the impossible (over 10 yrs ago). I wanted to work virtually from home. That was not an option with that company, so we agreed to part ways so that I could follow my dream. And, then, I focused on starting a virtual bookkeeping business.
Getting Ready to Start a Virtual Bookkeeping Business
Before you take the leap out on your own, you need to prepare yourself and plan for the type of virtual bookkeeping business you want to create.
1. Initial Funding
I started my business with $1,000. My husband and I decided that was how much we were going to put towards my virtual bookkeeping business. While that was the initial funding, we also considered how much less our household income would be without me working full-time at a traditional job. Luckily, we were able to provide a safety net for ourselves with a substantial emergency fund. That has been one of our best blessings over the years.
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2. Business Name, Structure, and More
I would say, you don’t have to be perfect from the start. The more you can invest in during the beginning, the easier it will be later on. But, remember, I had limited funds to start. I started as a sole proprietorship (Schedule C) and was able to invest and become an LLC within a year or so using Legal Zoom. With that change, at first, I was just my name. Once I started my LLC, that is when Iconis Group, LLC was born. (QBOchat is just part of my brand, Iconis Group is the actual company name.)
Now, it is also important to figure out what you need to properly be in business. Make sure you are checking your local and state regulations. For me, I needed to get a local business license, to register my LLC with the state (when I finally had one), and to get an EIN for my business.
You also want to start a business checking account. Check with your bank as to what you need to get that business account. Note – this is a great time to build a relationship with a local banker that could be a referral source for new business in the future. It pays to spend some time face-to-face with an actual banker because they can help you along the way. I absolutely have loved working with BB&T because it feels like a smaller, local bank but I get the benefit of all the technology that you expect from the biggest banks around.
Technology Needed to Start a Virtual Bookkeeping Business
I think these are some of the most important decisions when you start a virtual bookkeeping business. You are going to be virtual – so you are going to have to rely on technology. More specifically, it is time to embrace cloud technology. If you don’t, then you are just putting yourself at a severe disadvantage to all your competitors. Cloud technology is going to give you the most flexibility.
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Hardware
Let’s talk about your computer. You’ll need something, that is for sure. Since my budget was so small, I went with what I had. And then, once I made enough money, I was able to reinvest that and get something new.
If I had any choice from the beginning, I would have gotten a MacBook (affiliate link). If you are used to Windows, it can definitely be an adjustment, but I think it is totally worth it. I just don’t deal with hardware issues or needing IT support with my Mac. My first one lasted about 5 years with no issue. The problem I finally ran into was needing more storage space on my MacBook.
Yes, I know MacBooks cost a lot more than a regular Windows-based computer. But let me tell you that I am saving money on less frustration with IT issues and lost time. I just didn’t want to deal with that. And, I feel like a MacBook lasts longer than any other Windows-based laptop out there.
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Email
How are you going to communicate with your clients via email? When I started, I had my free Gmail email. But, I started to get crap from the people I networked with saying they didn’t think just a “@gmail.com” email is professional enough.
Enter G Suite (affiliate link). Once you get your own domain (a really cheap investment on GoDaddy) then you can have your own email address using G Suite. And, it is super duper cheap at just $6/mo. Even I could afford that starting out.
Other benefits of G Suite and that low monthly fee are 30GB Cloud Storage, Shared Calendars, and access to G Suite’s document, spreadsheet, and similar office systems.
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Storage
Where are you going to save all those files once you get them? Well, you do get 30GB included in your G Suite if you go that direction. I personally also have a Dropbox account. You can start an account for just $8.25/mo.
I prefer using a cloud solution like Dropbox or G Suite so that I don’t have to worry about backups.
Become a Virtual Bookkeeping Expert
Very quickly on, I figured out that QuickBooks was the market leader and I wanted to develop a virtual bookkeeping business on that platform. But, over 10 years ago, QuickBooks Online was still very under-appreciated among bookkeepers. There wasn’t even any training or even a certification around the program. Luckily, my first client pushed me to QuickBooks Online and that has been my platform for my bookkeeping business ever since.
1. Pick a Bookkeeping Package
As I mentioned, my virtual bookkeeping practice is supported by QuickBooks Online. I’ve loved the program ever since I started using it. But there are several other options out there. Research them and find out what is the best fit for you. Yes, you can support several different programs, but I decided to be an expert in one instead of a generalist in others. This has allowed me to set up systems in my bookkeeping business to streamline operations and become extremely efficient in supporting my clients.
2. Train, Train, Train
Once you figure out what bookkeeping system you are going to use, then start training in it. My assumption is that you already have the bookkeeping knowledge if you are ready to start a virtual bookkeeping business, but that doesn’t mean you have the software knowledge. The two are very different.
If you are utilizing QuickBooks Online, get certified in QuickBooks Online as a ProAdvisor. Intuit’s ProAdvisor Program is free and provides a ton of wonderful resources, including training!! I see 2 big benefits of becoming certified in QuickBooks Online. (1) You understand how to use the software program to be as effective and efficient as possible and (2) Once certified, you get listed on the Find a ProAdvisor website which could potentially start sending you bookkeeping leads!
3. Join Online Communities
There are a ton of Facebook groups, LinkedIn groups, Slack groups, and more places for you to connect with other virtual bookkeepers like you. My private Facebook group is Build Your Best QBO Practice. My goal was to create a private community for bookkeepers to support each other and be free to create a QBO Bookkeeping Business that fits your personality and goals. It is an amazingly supportive group, but mine isn’t the only one out there. Just search for any of these platforms for the bookkeeping software that you use and find some communities that you can utilize for support when you need it.
Grow Your Technology Stack
The term “Technology Stack” will be something you will hear a lot once you start a virtual bookkeeping business. This simply means what software are you utilizing in your bookkeeping business to run and operate your business. Here are a few examples that I utilize in my practice.
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QuickBooks Online
I think you get this one by now, but I use QuickBooks Online exclusively with my clients by providing on-the-go bookkeeping services. I am in their QuickBooks Online account at least once a week.
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Bill.com
If I have to handle accounts payable for a client, I utilize Bill.com. (Affiliate link) I’ve been using them since almost the beginning. With Bill.com, I’m able to process my clients’ bills in the cloud and then give them the green light to pay their bills virtually. No more printing checks. No more mailing checks. Bill.com just takes care of all of that and I make sure everything is accounted for properly.
Alternatively, you might also want to check out Melio Payments or Veem (both affiliate links) if you need a less advanced system for your clients.
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Hubdoc
In order to be an effective virtual bookkeeper, you need to be able to get access to source documentation – like bank statements! Yes, I could get login information for all of my clients to their banks and download the files that I need. Or, I can use Hubdoc which automates all of that for me. It’s an investment at $20/mo per client, but I feel like I am saving at least that much of my time by utilizing their system. If I run across a client that utilizes a bank that doesn’t work on Hubdoc, then I simply don’t put them on it. Hubdoc is all about saving me time and increasing my gross margins.
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Insightly
Insightly is my CRM and Project Management tool. This tool keeps me on track with my clients’ work and I can make sure things aren’t falling through the cracks. I love their recurring tasks and I also love how I can delegate tasks. I also utilize this to track my leads. Now, they are mostly people that are signing up for my training courses.
These are the basic 4 programs I use every day. I use a ton of others now and have used even a ton more in the past. If you are ever looking for an app to help with your life, you can start by look at Apps.com. This is Intuit’s own website listing apps that integrate with QuickBooks Online and have gone through Intuit’s security testing and approval process.
Are You Ready to Start a Virtual Bookkeeping Practice?
To recap, when you start a virtual bookkeeping practice, you need to do your initial planning and set that business up properly, get the right technology in place, train on the bookkeeping software you are going to use, and start to grow your technology stack.
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“How to Start a Virtual Bookkeeping Business”
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Hi Cathy,
I want to say how much your saying all this has inspired me to continue on with my own goals.
My name is Shari Olson and I am the owner of Olson Accounting 2015 LLC. I have just started with my firm trying to grow it and everything you have said is the steps that I have taken. I am also Quickbooks online certified. That is the program that I also plan to use for majority of my clients. I have also acquired the Hubdoc system to be using.
And I have hired a marketing company to get my name out there.
With what you have said, has proved to me that this can be done! My firm will be offering both bookkeeping and payroll to start with, and I plan for next year to also offer taxes. I am not a cpa, but I do have a degree in accounting and enjoy the work.
Again, I just want to say Thank You!
Shari Olson
Thank you for the kind words, Shari! I know you are going to rock it! There will be highs and lows, but it is an amazing journey. Wishing you the best.
What software do you use for payrol
I currently use ADP, which has been awesome for years. I’m looking at switching to OnPay because I think I can get the same service for half the cost. I’ll probably start that this month since we are finally done with January. I definitely have never liked QuickBooks’ payroll. Gusto is decent bad I got a bad impression from them years ago because of their old setup and I still can’t seem to shake that feeling. I think all of those issues are well in the past. Gusto seems to be the one everyone loves, but my guess is that OnPay will be taking a good share of their market soon enough.
I’m curious to know if you made the change to onpay and if you like it? I saw your post and was looking to use onpay as well but wanted to see if you experience so far was good.
Hey! Yes, I made the switch to OnPay. They made it super easy. My only trouble was adjusting from ADP (which has a ton of clicks) to OnPay which only has a few. It seemed easier than I was expecting. I do run into issues trying to find things every once in a while, but it is really just me on payroll so I don’t have to do much. They don’t have recurring payroll like ADP does (or at least they didn’t when we did the demo). I just added a subcontractor to my payroll runs, and that has been working pretty well so far. Overall, I’m very pleased I like that the cost is so much cheaper than ADP – but it still seems up to par with that technology.
The major question is how do you get the clients?
By marketing your practice. There are several methods to find clients. Do you have a marketing plan? We do have OnDemand training on how to create one. https://qbochat.com/product/the-bookkeepers-marketing-plan/
Hi Shari,
I am at the beginning stages of starting a bookkeeping service. I have 2 small clients so far. My question is how to determine your rates? Do you charge hourly, monthly or a combination of both? How do you know how much time you will need on average to work on a client?
Great article! Thank you,
Mary
I charge a flat fee, but it is based on how much time I expect my engagement to take monthly times what I want my hourly rate to be. I understand that the actual rate will fluctuate each month, but it gives me an expectation to compare to. There are a ton of different recommendations out there for all the different billing methods. A google search for pricing plus bookkeeping probably will give you a ton of information.
Hi Cathy,
My husband and I are interested in starting a virtual bookkeeping business. We own and run a small business and I booth rent as a hairstylist. So, we have plenty of experience in doing our own bookkeeping and want to use our skills in another business. I also have a business minor and he teaches high school and middle school business. My question is where should we start? Since we are not CPA’s, should we still start with getting QuickBooks certified? This is also the software we use. Do you offer personalized coaching or maybe even just a simple evaluation of what steps we personally need to take? Thank you for your time!
Teresa,
I actually offer a master course for people starting out and building a bookkeeping business. Here is the link.
Cathy,
Is the only way to take the master class. The times for the class are during the weekday and during normal working hours. Is here a way to do this on demand?
Dates: 9/10, 9/12, 9/17, 9/19, 9/24, and 9/26 @ 1PM Eastern
All sessions are recorded so you can watch them later at any time. You’ll have access to the files and videos for a year after the course.
Hi Cathy – I am a stay at home dad. I am a CPA and have a background in corporate finance, building complex deal (M&A) models to value and integrate companies, and working through high level accounting and reporting issues. However, I have never worked with small businesses to manage their books. How do you recommend I get started?
Dave,
Small business bookkeeping is a completely different world. And, I feel like you have a huge asset in your experience now. Why don’t you consider offering those specific skills to larger businesses? I’m sure there is a market for it. And, I’m sure you have a lot of contacts in those areas now. Would you even need to know a specific accounting platform if you are working these types of models? I jumped from corporate to small business because I spent a lot of time doing general management reporting and I felt like I could provide that same support to small businesses. To connect with them, I had to lead with doing bookkeeping and then show them how much more I can do. I hope that helps even though it might not be the answer you were looking for.
Hello Cathy, I am at the beginning stage of starting my bookkeeping business. I have a degree in Accounting but I have never done bookkeeping. My previous work experience has been in mass appraising business for tax purposes. So I have some experience with reviewing financial statements and etc. What should I do first?
Do some research on types of tasks that bookkeepers do, then learn how to do them in QuickBooks Online. My Intro course covers some of this, but there are also great books out there too. You have the accounting knowledge – but you just need to see how that connects to the detail day-to-day work to get the transactions into the system to help the business owner. Does that make sense?
I like how you mentioned hardware for bookkeeping. In reality, even CPAs need a decent working computer and internet connection to calibrate proper data input on their archives. I appreciate your primer on your innovative online project, we could use your financial expertise for some help.
Feel free to email us at qbochat@iconisgroup.com if you want to explore working with Cathy.
HI CATHY
I just wanna know that if i start virtual bookkeeping through quick-book online do i need to subscribe for quickbook online package and pay for that or i will have access to my client account quickbook online through my client invitation for accountant by email? please guide me in detail.
Thanks
Hi Cathy,
Thank you for the article! It appears that Bill.com and Hubdoc do similar functions regarding invoices, but some differences… Would you mind explaining a bit more how you use the technologies separately and together?
Thank you
Hi Cathy,
I live in Florida and I have 8 years of accounting experience including bookkeeping. I also have a Master in Accounting. My current job (actually my full department) was outsourced out of country (cheaper labor). Because of this I was thinking to open my own bookkeeping business. I have no clients, and I would like to ask you if you consider this would be worth it for me? How long I would need to get clients and make money? Please advise.
Thank you
Do you remember the answer to any accounting question? “It depends” That same holds true here. You can definitely build a practice, but you get out what you put into it – and you have to do it strategically. You’ll want to reach out to your contacts to let them know you are in business, but it could take a while for a business to realize they need someone or that they need someone else. I’d say at least 3-6 months to start seeing your marketing to have continuous results. I took longer because it wasn’t a traditional route of just using social media (10 years ago!). Check out the Facebook group and see what others have done.
Due to CV, I find myself at home for a while and am considering an online business so I can stay put. I have used QB for several years with my husband’s small business, and a small natural fiber business of my own. I have a gen ed BA, but am not an accountant. I have kept our files for our accountant, and I have managed orders for another company via QB. My question is, is there a way for me to become a viable business using QB? What are your recommendations? Could you be, or can you suggest, a mentor?
Thanks so much!
Hello Cathy,
I wish to start a bookkeeping business however I have no prior knowledge nor experience. What do you advise I do?
Your advice is greatly appreciated.
Hello Cathy,
I am currently in college going for my Bachelors in Accounting but I’m having a hard time with accounting itself. However I have worked in the accounting department plugging in numbers doing A/R & A/P, reconciling accounts and so fourth. Just a bit nervous, if I should continuing school or jump into the bookkeeping business?
I strongly urge you to continue your education. You will get a far better understanding of the financials so you can be a real asset to your clients.
Hi, I recently made the switch to accounting and I love it. I just completed my program. While I am not a CPA I absolutely love working in this field. I would love to work from home or virtually as well. The thing is I don’t know if i have enough working experience yet. Do you know if there are places where people who already have up and running successful businesses look for people to do work for them? I am not opposed to starting small like filing and AP/AR and doing data entry. I would love to gain some experience under my belt before I venture out onto my own.
Hi Cathy,
I’m a 15 year vet in the accounting industry, passed all my CPA exams and working on licensure now. My husband owns a business that I do his books for on QBO. We have decided that it’s time for me to start a bookkeeping business. My question is if we already have him set up on QBO (entirely separate from my business), how would I go about setting up QBO for my business? DO I just buy the advanced package and then have clients add me as an accountant user? Thanks!