Love spreadsheets? If so, then you might want to learn how to become a bookkeeper.
Bookkeepers play with spreadsheets and numbers all day long. And, they get paid very well for it.
This lets you do something you enjoy, be it inputting data, coloring the cells or playing with formulas. Along the way, you can start a business, and make a good living out of it. Plus, you get to work from home, set your own schedule and pick your clients.
If that sounds good to you, let’s get started.
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What is a Bookkeeper?
A bookkeeper is someone who organizes and prepares all the documents related to your finances. They track and manage sales, revenues, income and expenses for small businesses, entrepreneurs and companies.
- Some of the things you’ll be doing as a bookkeeper include:
- Collecting receipts and filing them
- Documenting expenses
- Matching expenses to see if everything reconciles
- Keeping track of sales
- Receive the checks, cash, discount vouchers
- Managing employee payroll
- Organizing payment of bills
- Creating reports of finances
In most cases, bookkeepers use software like Quickbooks to easily keep everything in order. Although some prefer to do it by hand.
If you’ll notice most of the things the bookkeepers do are transactional. That is, they duties are related to the every day financial transactions and less of actual financial accounting. That’s where the difference between a bookkeeper and an accountant come in.
As a bookkeeper, your jobs it to manage and organize all the financial documents and prepare them so that the accountant has all the information they need to create the financial models and estimate for taxes.
The biggest difference between the two is that accountants do more analysis, review and interpretation of the company’s financial information.
How Much Can You Earn as a Bookkeeper?
According to the U.S. Bureau of Labor Statistics, and entry level bookkeeper earns nearly $40,000 a year. That’s about $19/hour on a full-time salary for a company. Depending on who you work for and where you live the rate can vary between $18 to $23 per hour.
What’s more interesting is that you can earn much more from home doing online bookkeeping. According to Quickbooks, which is the leading software in the field, you can earn between $69 to $82 an hour once you build up your experience and credentials as an online bookkeeper.
That’s as good a rate as you’ll see no matter if you work full-time or part-time. The key is becoming good at what you do and being able to market your services in order to scale that up to multiple clients.
Do You Have to Be a CPA?
The reason it is important to understand the difference between a bookkeeper and accountant is so you know they have different qualifications.
It is also the reason why you don’t need a certification, CPA or pass a licensing exam to become a bookkeeper. This makes it easier for anyone who has no experience but the willingness to learn and a love for organization to become a successful bookkeeper.
However, once you become a bookkeeper, it’s important to keep honing your skills to get better. This means spending about 40 hours a year learning new things that will help you get better at your craft.
What Skills Do You Need to Be a Bookkeeper?
While you don’t need to be a CPA, there are some key skills that many profitable bookkeepers possess. The reason for this is that in order to be good at bookkeeping, you need to embrace some of the things you’ll be doing a lot of. This means being passionate about some things and being able to do them day in and day out without burning out or getting bored of your work.
If you have these skills, then you’ll likely be on your way to becoming a successful bookkeeper.
- Attention to detail. This the most important attribute of a bookkeeper. Since you’ll be dealing with finances of businesses, it’s crucial to be error free in your accounting of numbers. Additionally, having an eye for tiny details goes a long way as this will allow you to meticulously check and double check all the figures so you don’t end up missing a zero or a decimal point anywhere.
- Well organized. Successful businesses have lots of transactions. This includes sales, payables, and expenses. You’ll also need to deal with receipts and invoices from suppliers as well as customers. Then, there’s payroll too. To say the least, you’ll be juggling quite a few things. Thus, being well organized is key.
- Ability to multitask. As a bookkeeper, you’ll be dealing with multiple clients at the same time. And, each client will have hundreds or thousands of transactions happening on any given month. So, it’s importantly to be able to keep track of all the things happening at the same time without getting overwhelmed.
- Problem solving skills. No, this doesn’t have to do with math problems. Although bookkeeping does entail some math, you won’t need much more than adding and subtracting. However, like all businesses, there will be problems that pop out of nowhere. And, you should be able to figure out how to fix them.
- Know your way around the computer and software. Basic computer skills are all you need. Nevertheless, it’s useful to be able to tinker with software when the need arises. Most of your work will be done with some kind of accounting software like Quickbooks. In addition, you’ll also need to be versed in Microsoft Excel and Word.
- Able to communicate well with people. Communication is key. As an entrepreneur, you’ll need to talk to people you don’t know. You’ll also want to be able to clearly communicate with your clients. This lets them know if there are any problems they need to address.
- Perseverance. Like all other small businesses, there’s going to be ups and down. In the beginning, you won’t have any clients too. Thus, being able to face rejection over and over is key to becoming a successful bookkeeper.
- Marketing skills. Many bookkeepers are introverts. That’s because the nature of the jobs makes it attractive to their personality. And, if you’re one, then bookkeeping is a great way to earn a good living. That said, you’ll want to do a lot of marketing for your business as it’s the only way potential clients will get to know.
How to Start a Bookkeeping Business in 5 Easy Steps (No Experience Needed)
Here’s how to start your own successful bookkeeping business with no experience required.
1. Learn Bookkeeping Skills
Like all jobs, you need to start by learning the skills pertinent to that job. Bookkeeping is no different.
Here, you’ll need to understand how financial transactions work as well as preparing financial statements (income statement, balance sheet, cash flow statement, statement of changes in equity). Additionally, you need to know how to collect sales and payables as some clients will rely on you to do this. For businesses with many employees, you’ll be processing payroll as well as handle their budget.
Thus, you’ll need to put it some work to learn these things as well as all the financial terms use in the industry in order to communicate with clients and their partners.
So how long does it take to become a bookkeeper?
If you work 3 to 4 hours a day, you’ll be able to become a full-fledged bookkeeper in 3 to 4 months. Of course, you learn all of this yourself. As a self-taught bookkeeper, you get save money since you don’t need to pay for any lessons or courses. But, there will be a lot of trial and error as well.
Alternatively, as faster, more efficient way is to take online courses. These are great because you can learn from home and go at your own pace.
Bookkeeper Launch is one great example of this. It is created by a successful bookkeeper who has trained over 6,000 students who are now making money from home with what they’ve learned.
What makes it useful as a resource is that it doesn’t only teach you the skills to become a bookkeeper, it also teaches you the processes needed to run your bookkeeping business. These system allow you to keep costs low while having all the tools you need to service your clients.
And, speaking of clients, the course also teaches you how to get clients and choose the right kind of clients that will be good for your business in the long-term.
2. Get Your First Client
Once you know the ins and outs of bookkeeping, it is time to get your first client. Here’s where networking and marketing come in.
The better you are at selling yourself and your services to people, most of whom you don’t know, the higher the likelihood that your business will become successful.
While it’s early in the game, you do want to keep in mind that businesses fall under different niches. This is important because bookkeeping and accounting process for different industries can vary.
For example, bloggers have different costs. And, the way they earn is very different from how a lawyer or a cleaning business does. As such, focusing on one industry and adjacent ones to it make it easier to build a reputation for yourself in that niche.
Similarly, do you prefer dealing with few larger clients or many smaller ones. Larger clients have bigger accounts to manage. Thus, they’ll pay more too. But, the workload for each may limit your ability to get lots of them.
In contrast many smaller clients can be easier to handle especially if you’re good at multitasking. But, the payoff may not be as profitable since you’ll be able to charge much less for your services.
3. Set Up Your Business
In an ideal world, you could set up your business before you get clients. But, I’ve found that setting up a business after you’ve landed a few clients is a better way to confirm your interest and staying power in that particular work.
After you’ve gotten a few clients under your belt, you know the little things associated with the business. This allows you to decide whether you’re committed to creating a long-term career out of this or if it’s not for you. Only if you believe the former is the case, should you set up your business.
4. Take Good Care of Your Clients
What’s great about bookkeeping is that it’s recurring process businesses need. As such, your services are long-term as opposed to other gigs which can be a one-time deal.
Since they need you month in and month out, you can make a steady income with a healthy stable of clients. The key is making them happy.
That’s where going the extra mile for your customers goes a long way. You want to earn their trust and also convince them that you can handle their finances to a degree that they can fully focus on what they do best, their work.
That way, you become invaluable and they’ll happily retain your services without thinking twice about paying you.
5. Find More clients
Last but not least, always be on the lookout for more clients. This and continuously learning are the two things that will help your business grow the most. It is also the reason why marketing is so important even if it is not directly related to bookkeeping.
The more clients you’re able to get, the more you’ll be able to earn. As long as you’re able to manage your time well and not take in too many clients, you’ll be in good shape.
Learning how to become a bookkeeper is actually easier than what many people think. You don’t need to be a CPA. And, you don’t need to go to school for it. All it takes is a few months to learn the art of bookkeeping. Best of all, you can work from home and make good money from doing so.