Starting a Bookkeeping Business
Do you dream of being your own boss and helping businesses thrive? The bookkeeping industry is booming, with small businesses increasingly seeking reliable financial management. Starting a bookkeeping business could be your perfect path if you enjoy numbers and organisation.
A self-employed bookkeeper offers the freedom and flexibility to set your schedule and work with clients you love. Plus, the demand for skilled bookkeepers is expected to grow with the implementation of Making Tax Digital, making it a secure and rewarding choice.


But before you dive in, there are essential steps you need to take to ensure your success. This guide will walk you through everything you need to know about starting your own bookkeeping business, from defining your ideal client to writing a business plan and building a thriving practice. So, grab your calculator and get ready to unlock your entrepreneurial potential!
How to start a home-based bookkeeping business
One of the most important things to do when starting your own business is to do your homework; bookkeeping is no exception. It’s tempting to believe you possess the necessary knowledge to establish your own home-based bookkeeping practice. However, it is essential to comply with numerous requirements. Writing a business plan may seem tedious but can provide valuable insights.
Researching your competition
When starting a bookkeeping business, finding out who your competitors are is helpful. Call them up and find out about their services and rates. Do they sound professional on the phone? Look at online resources like Google and Facebook. Are there many bookkeepers offering their services in your area?
Many bookkeepers work with other local bookkeepers to build a community. Some specialise in specific niches, while others are experts in certain subjects. One way to get started is to work alongside another bookkeeper; it may also help build your confidence.
Ask yourself what you can do that is different, or better, than your competitors. What value can you provide as a self-employed bookkeeper to your customers that your competitors do not?
Planning Your Bookkeeping Business: A Strong Foundation for Success
Turning your bookkeeping skills into a thriving business requires a solid plan. Here, we’ll delve into the essentials of planning your bookkeeping business, ensuring a solid foundation for attracting your ideal clients and achieving long-term success.
Define Your Ideal Client
Business Size and Industry
Defining your ideal client is the first step in building a successful bookkeeping business. Your ideal clients could be small businesses, freelancers, or even individuals who need help managing their finances. Consider the type of clients you enjoy working with and who will most likely benefit from your services.
Once you understand your ideal client, consider what differentiates them from other potential clients. What industry do they work in? What specific challenges do they face that you can help solve? Understanding these factors will allow you to tailor your services and marketing efforts to attract more clients.
Choosing the Right Business Structure for Your Own Bookkeeping Business
When launching your business, a crucial decision you face is choosing the proper business structure. Each option offers distinct advantages and drawbacks, impacting taxes, liability, and administrative burden. Let’s delve into the three main options:
Sole Trader:
A sole trader is the simplest and most common structure for bookkeeping businesses. As the business owner and operator, you own and operate the business, and all the profits belong to you. You are also personally liable for any debts and legal obligations.
One advantage of being a sole trader is the low setup and administration costs. You must report your business finances on a self-assessment tax return to HMRC and pay your personal taxes.
Partnership:
A Partnership is formed by two or more individuals who agree to share profits and losses according to a partnership agreement. Partners share management responsibilities and contribute skills or capital to the business.
The main advantage of a partnership is a shared workload, especially if you have different skills. However, you may also disagree with how the business is run.
Limited Company:
A limited company is a separate legal entity from its owners (shareholders). It is limited liability protection for shareholders but requires a more complex setup and ongoing compliance procedures. You must register the company at Companies House and pay a registration fee.
The company pays corporation tax on its profits, and shareholders pay income tax on dividends and salary received.
Business Name & Branding:
Choosing a memorable and professional business name is crucial in establishing your brand identity as a bookkeeper. Here are some key considerations:
- Clarity and Relevance: Your name should communicate that you offer bookkeeping services. Consider using keywords like “bookkeeping,” “financial services,” or “accounting.”
- Uniqueness and Memorability: Strive for a name that stands out from competitors. Opt for something easy to remember, spell, and pronounce.
- Availability: Conduct a thorough search to ensure your chosen name is available for domain registration and trademarking.
Beyond the name, branding is the visual elements that create your overall image. It might include a logo, colour scheme, and tagline. Ideally, your branding should be consistent with your chosen name and reflect the professionalism and trustworthiness you want to convey to potential clients. Consider using clean fonts, trustworthy colours like blue or green, and a tagline summarising your value (e.g., “Streamlined Bookkeeping for Peace of Mind”).
Remember, your business name and branding are often your first impressions on potential clients. Invest time in crafting a name and visual identity that accurately represents your bookkeeping services and resonates with your target market. Look at other bookkeeping businesses to get some ideas.
What Bookkeeping Services Can I offer?
Bookkeepers can offer various services to help businesses with their financial records. Here are some of the most common bookkeeping services:
- Data entry of financial records: Recording income and expenses
- Bank reconciliation: This involves ensuring that the bank’s records of a company’s finances match the company’s own records.
- Accounts payable and receivable management: This includes sending and receiving invoices and tracking bills and payments.
- Payroll processing: This involves calculating and paying employees’ salaries and wages and withholding and remitting taxes.
- Sales tax filing: This involves calculating and filing sales tax returns.
- Financial reporting involves creating financial statements from the bookkeeping software, such as income statements and balance sheets.
- Budgeting and forecasting: This involves planning a company’s future finances.
- Bookkeeping system setup involves helping a company choose and set up a bookkeeping system.
- Training: Offering small business owners bookkeeping training can help them complete their own bookkeeping.
The role of a bookkeeper is changing with the introduction of AI and accounting software, which have automated tasks. Also, look at how you can add value to a client. What information do they need? How can they improve their workflow?
The range of services you can provide hinges on your expertise and experience. Should you be affiliated with an accounting regulatory organisation, upon application, they will enquire about the specific services you wish to offer.
The different Accounting and Bookkeeping organisations in the UK are:
- International Association of Bookkeepers (IAB)
- Institute of Certified Bookkeepers (ICB)
- Association of Accounting Technicians (AAT)
- Chartered Institute of Management Accountants (CIMA)
- Association of Chartered Certified Accountants (ACCA)
- Institute of Chartered Accountants in England and Wales (ICAEW)
Setting Up Your Small Bookkeeping Business Operations UK
Launching your bookkeeping business requires more than just expertise in numbers. Establishing compliant business operations with integrity and building trust with clients.
It involves regulations like Anti-Money Laundering (AML) to prevent financial crime and potentially aligning with professional accounting bodies to demonstrate your commitment to ethical practices and continuing education. By implementing these safeguards, you ensure legal compliance and provide a professional image that can attract and retain clients seeking reliable bookkeeping services.
I am a part-qualified or fully qualified accountant – do I need to register with my accounting body?
If you are part of fully qualified, each accounting body expects members in practice to register with them. There are advantages in registering, which can include:
- Using the accounting body logo
- Additional workshops
- Cheaper insurance
- Newsletters
- Your details are included in their database for practising members
- AML Supervision
Separate Business Bank Account
As a bookkeeping business, having a separate business bank account is crucial for maintaining accurate financial records and ensuring the smooth operation of the business. Keeping personal and business finances separate makes it easier to track income and business expenses. This also allows for better organisation and simplifies tax preparation at the end of the year.
Although it’s not essential, you may also require a business credit card. It will allow you to delay payment for business expenses, especially while setting up your own bookkeeping business.
When choosing your bank, it is worth looking at both high-street banks and challenger banks, which are becoming popular as the fees can be cheaper. Challenger banks include ANNA Money, Tide, and Revolut.
Business Insurance:
Insurance is essential to any business, and getting the correct insurance in place before you start is vital. The first place to look is with your accounting body; most can offer a discount. If you are not part of an accounting body, complete a search online. You will need Professional Indemnity Insurance, but depending on the business setup, you may also need other insurance.
There are specialist business insurance companies, including:
Policy Bee – used by over 60,000 small businesses, with policies tailored to your needs.
Information Commissioner’s Office (ICO)
For your bookkeeping business to legally process personal data from clients in the UK, registration with the Information Commissioner’s Office (ICO) is mandatory, and compliance with the General Data Protection Regulation (GDPR) is essential.
Client Paperwork
Before starting your first small business, you will need the correct paperwork. If you are registered with a financial body, you will have access to terms and conditions, contracts, and cover letters. If not, looking for templates online is a good option.
Business Accounting Software: Which One to Choose
Selecting the right business accounting software is vital for streamlining your bookkeeping practice. Two popular options include QuickBooks and Xero; both of which offer the option to join their directories and become a certified bookkeeper.
QuickBooks Accounting Software
QuickBooks offers an online accountant platform that gives accountants access to all their clients’ books in one convenient location using the practice manager. This feature is especially beneficial for businesses with multiple clients, as it eliminates the need to switch between different software.
QuickBooks offers Pro-Tax, which allows you to prepare, renew, and file annual accounts and Corporation Tax returns to Companies House and HMRC. Bureau Payroll is a stand-alone payroll service you can offer your clients.
QuickBooks 90% discount for 7 months – starting at £1 per month with discount.
Xero Accounting Software
Xero is another popular accounting software option for bookkeepers. It offers a platform for all your clients and free software for your bookkeeping business.
Xero also offers the facility to manage and submit tax returns online with its Xero Tax feature and Payroll.
Becoming a certified advisor with Xero or QuickBooks can also add credibility to your business and attract more clients.
Free Bookkeeping Software and Spreadsheets
Another option is to provide free bookkeeping software; FreeAgent is becoming a leading provider, offering a free account if you bank with certain banks.
Smaller businesses can use spreadsheets; a few options are available. We offer over 25 free Excel Bookkeeping Templates that you can use for your clients.


Starting a Virtual Bookkeeping Business
With the available technology, it is possible to run your whole bookkeeping services business online and never meet the client. In a virtual bookkeeping business, the client can upload all the paperwork directly to the bookkeeping software, posted by the client, or sent over the Internet.
Sharing via the cloud and email will ensure the client receives the reports and paperwork.
It is an ideal solution, especially if you work from home or work different hours from the standard 9-5. You can still contact your client through emails, post, phone, and video calls.
How Much Can I Charge?
When starting a self-employed bookkeeping business, the rate you can charge will depend on your experience and the services you offer. You can charge more if you can add value to a company. This can include advising how to save money and complete their accounts, providing management reports, and handling year-end. If your work is solely focused on data entry, you’ll unlikely be able to charge higher fees.
Try to find the bookkeeping rate in your area, as this will change from place to place. There is an excellent bookkeeping group in the UK on Facebook; they discuss pricing and services.
When starting, ensure the rates you charge are enough for you to earn an income to make it worthwhile. Remember to factor in all applicable taxes when calculating your fee.
Do I charge hourly, daily or fixed rates for Bookkeeping Services?
It will depend on the customer. Most customers prefer a fixed fee so that they know the costs and can budget for it. Estimating the duration of work becomes challenging when working at a fixed rate. Ensure you have an agreement to review the price, especially if the workloads change.
Even when charging an hourly rate, providing an estimated cost upfront is crucial. Customers may hesitate to settle a substantial bill without prior insight into the expected time and expenses. Should the work extend beyond initial estimates, promptly inform the customer to facilitate a mutual agreement.
Ensure to meticulously record every hour worked to guarantee their inclusion in your invoice.
How many hours can I work?
When you start a bookkeeping business, you must determine how many hours you can work. Deduct time for completing your accounts, meetings with potential clients and research time.
Ensure you do not overload your work at certain times of the year. Clients may require accounts preparation each month, quarter, or annually. If everyone is after bookkeeping at the same time, you will have problems balancing your time. It is better to turn work away than work a 24-hour day or not complete it on time.
Plan time for your holidays or time off that you may need to look after children. If you have a large client database, it is worthwhile to find another bookkeeper in your area who could cover some of your work.
How to Attract Prospective Bookkeeping Clients
Starting to establish any new company takes time. Don’t expect to have lots of paid work from day one. It typically takes 6-8 months from starting a bookkeeping business before you get to the point where you can expect to generate a reasonable income for yourself.
Finding customers can be the most challenging part of setting up a new business. There are a few things that you can do to try and attract clients, including:
- Setting up a website for your own business can be relatively cheap and worth looking into.
- Facebook Business page.
- X account.
- LinkedIn is an excellent platform for gaining work
- Google Maps – take a look at what other local bookkeepers have done.
- Listing in directories, including Yell.com.
- Dropping leaflets through local businesses
- Talking to an accountant, they may have bookkeeping work.
- Network with other small businesses, and check to see if there is a local group for you.
Ongoing Growth & Success
A bookkeeping business can succeed by implementing effective communication strategies with small business clients. This includes maintaining regular contact, providing transparent and timely updates on financial matters, and actively listening to their needs and concerns. By establishing a solid line of communication, the business can build trust with its clients and foster long-term relationships.
One way bookkeepers communicate with clients is through recorded video. This has the advantage that the client can review it at any time and can go back over it if they are unsure of something.
Completing paperwork to deadlines is crucial for a bookkeeping business’s success. Meeting deadlines shows professionalism and reliability, essential for clients looking for a trustworthy bookkeeper. Maintaining accurate financial records and avoiding potential penalties or fines is also necessary. By consistently meeting deadlines, the business can showcase its efficiency and attention to detail, further enhancing its reputation in the market.
CPD Training
In finance, keeping your knowledge up to date is crucial for success in your bookkeeping business. This is where Continuing Professional Development (CPD) training comes in. CPD refers to your ongoing learning activities to maintain and enhance your knowledge and skills.
These activities include attending workshops on new tax regulations, online courses on advanced bookkeeping techniques, researching bookkeeping knowledge, or participating in industry conferences. By actively engaging in CPD training, you demonstrate your commitment to professional growth and ensure you can provide your clients with the most up-to-date and effective bookkeeping services.
Creating a Business Plan for Your Bookkeeping Business
A well-crafted business plan is your roadmap to success in the exciting world of bookkeeping. It outlines your goals, strategies, and financial projections, guiding you in launching and growing your business. With all your research and knowledge, here’s a breakdown of the key elements to include:
Executive Summary:
Briefly introduce your bookkeeping business, highlighting your unique selling proposition and target market. Summarise your financial projections and key milestones for the next few years.
Business Description:
Detail your business structure (sole proprietorship, Partnership, Limited company), location, and mission statement. Describe the bookkeeping services you offer (data entry, payroll processing, tax preparation assistance).
Competitive Advantage:
Explain what sets you apart from other bookkeepers. Do you offer specialised industry knowledge, flexible pricing, or exceptional client communication?
Market Analysis:
Look at your Target Market and define your ideal client base, including industry focus and business size. Identify your competitors, their services, and pricing models.
Marketing and Sales Strategy:
Outline your plan for attracting clients. This might include online marketing, networking with local businesses, and offering free consultations.
Develop a pricing strategy that considers industry standards, your experience, and the value you deliver.
Operations Plan:
Describe your day-to-day operations, including workflow management, the software you’ll use, and data security protocols.
Consider outlining your team structure if you plan to hire employees in the future.
Management Team:
Briefly showcase your experience, qualifications, and any relevant certifications you hold. If you have partners or key team members, include their profiles.
Financial Projections:
Create a financial forecast outlining your projected revenue, expenses, and profitability for the next few years. Include startup costs for equipment, software, and marketing.
We have a free Excel template for cash flow forecasting that you can download and use for your own business and clients.


Remember: Your business plan is a living document. Revisit and update it regularly as your business grows and your strategies evolve.
A business plan is a roadmap for your bookkeeping business, outlining your goals, strategies, and financial projections. It also helps
Conclusion
Launching your bookkeeping business can be an exciting and rewarding journey. By carefully planning, choosing the correct business structure, and establishing a strong brand identity, you’ve laid the foundation for success. As you move forward, remember the importance of tailoring your services to your ideal client, building strong client relationships, and leveraging technology to streamline your operations.
Never stop learning and evolving alongside the ever-changing industry. Embrace ongoing education and stay abreast of the latest trends in bookkeeping practices and technology.
Focusing on these key elements will equip you to navigate the challenges, build a loyal client base, and watch your bookkeeping business flourish. So, take a deep breath, leverage your expertise, and get ready to make your mark in the world of finance!