Will you be a generalist or a specialist?
You can set yourself up as a generalist, offering the full spectrum of services to everybody. Or you might decide to specialise. Specialists may target a specific type of client with a narrower selection of relevant services. You can read more in the chapter on finding a niche.
As a general rule, however, you’ll be offering from a fairly standard set of services.
Bookkeeping services you could offer
There are many traditional and non-traditional bookkeeping tasks that can add tremendous value to a business. You will probably need to offer some combination to give yourself a shot at consistent work.
The first job in bookkeeping is to maintain the ledger. This often involves setting up accounting software and linking it with the client’s bank to pull through transaction data. You might do the bank reconciliation yourself or have your client do it and double-check their work. Plus you’ll check the ledger regularly to make sure everything is flowing through correctly – and fixing it if it isn’t.
Business owners and their staff may not understand their role in bookkeeping. You can teach them what to do, and when. The same goes for things like invoicing, stocktaking, and creating expense reports. If they’re using software, then you can set things up, then create cheat sheets or checklists for various tasks.
Set up regular health checks for the business by producing a balance sheet, profit and loss statement, aged payables report, aged receivables report, and a cash flow forecast. Don’t just throw numbers at your client. Break it down for them. Explain things, and draw their attention to the things that need attention. You can find specialist reporting software that converts data into beautiful, easy-to-understand graphs and charts. You can extend reporting to non-financial numbers too, such as website data from Google Analytics.
You can advise on payment terms, monitor ageing receivables, and chase overdue accounts. It can help to have someone from outside of the business making the awkward phone calls about late payments. You may also help decide how to deal with serial late payers.
Deciding when and how to pay bills is important, but many business owners don’t have the capacity to do it well. They’ll either pay everything straight away, or wait till they get overdue letters. You can take charge of the process, watching what’s due and when, and reconciling that against the cash flow forecast to decide when payments are made.
Keep tabs on GST collected and paid, file reports with the tax office, and make payments. A bookkeeper will also help ensure the business is in a position to pay income tax when required. You can greatly improve tax time for your clients by tracking their tax liability and making sure they put aside the cash needed to pay.
Payroll scares a lot of business owners. You can take the worry away by:
- maintaining employee records
- making sure their deductions are applied at the correct rates
- ensuring leave entitlements are accurate and administered at the correct rate of pay
- calculating pay and deductions on payday
- creating payslips and making payments
- filing reports with IRD
Setting up business systems
Because bookkeepers understand admin and finances so well, they often end up as tech consultants to small businesses. You might be asked to set up point-of-sale systems, payment gateways, staff scheduling and time-keeping systems, job-costing software, project management systems, and so on. You can make the most of these opportunities by becoming an expert on:
As the one with your finger on the pulse of the business, you’ll be the first to see challenges emerging. You can help troubleshoot them. You might recommend changes to payment terms to fix cash flow issues, or suggest your client refinance an expensive overdraft. You may identify product lines (or services) that are losing money, or spot growth opportunities that aren’t being explored. Bookkeepers are in a great position to see patterns in the finances of a business. You can share these insights with your clients.
With a bit of training, you can help business owners identify the things that drive profitability. These key performance indicators (KPIs) are often the same across whole industries, so it’s not like you need to learn a big secret. You can highlight the relevant KPIs for your clients, help them set benchmarks and monitor progress, and even brainstorm ideas for improving performance.
Types of clients you want
Think about who your ideal client would be and what type of work you’d do for them. It’s your business so you can be fussy within reason. Defining your ideal client will help you focus on certain services.
Would you like to work with:
- sole traders or bigger businesses?
- lifestyle or growth-focused businesses?
- startups or established businesses?
- traditional or tech-focused businesses?
- specific industries such as retail, hospitality, or trades?
If there’s a type of business you really want to work with, put in the time to figure out what they want. Do some research into and talk to your target market and develop services and pricing that will appeal to them. By undertaking research and niching your services, you can begin to market yourself as an expert.
Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
Starting a bookkeeping business
Work through the big decisions around accreditation, services to offer, fees to charge, and how to find clients.
- How to become a bookkeeper
You’ll need some training and certification to become a professional bookkeeper. Find out where this is available.
- Bookkeeping from home
With a foundation of knowledge, skills and experience, take the next steps in setting up as a bookkeeper.
- What services will you offer?
You need to nail down what services you’ll offer, who to, and how. Don’t promise more than you’re able to deliver.
- Niche and virtual bookkeeping businesses
Designing your bookkeeping business around a specific type of client or your strengths can be a successful way to go.
- Creating your business plan
It’s time to get things down on paper. Your business plan is vital to reality checking all those ideas you have.
- Pricing and charging
How do you walk the line between profitable for you and affordable for your clients? And help clients budget?
- Marketing your bookkeeping business
You might deliver an awesome service at a great price, but what if no one knows? Let’s look at marketing your services.
Download the bookkeeping business guide
A guide to help you work through the big decisions around starting a bookkeeping business. Fill out the form to receive the guide as a PDF.