The Essential Guide To Starting a Bookkeeping Business in Australia 

June 19, 2024

Image of Steps to Launch Your Own Bookkeeping Business

Starting your own bookkeeping business in Australia can be tough. You want to step out and own your own business, yet you keep wondering: 

  • Where will I get clients? 
  • How can I run a profitable business? 
  • What does it take to start a bookkeeping business? 

Getting out of your comfort zone and starting any business on your own is challenging, but when it comes to bookkeeping, you don’t have to do it alone. 

Let’s explore what this looks like for you. 

What does it take to run a successful bookkeeping business?

Starting any business is tough, and bookkeeping comes with its own unique challenges. 

1. Create a financial backup plan

Having some financial reserves when starting any business is very important. At first, you might struggle to land your first couple of clients, and having that financial backup plan will give you peace of mind. 

It will also give you space to not rush things, and properly set up the foundation of your business. Jana Aldhaibi, the owner of First Class Accounts – Bass Hill franchisee recalls how her reserve fund helped her launch her bookkeeping business: 

“I had to make sure that when I do something like that, I had the money to fund it, and then money enough to live on while I get my business off its feet.”

This safety net helps take the pressure off new business owners before going into a new venture.  

Jana Aldhaibi, the owner of First Class Accounts – Bass Hil

2. Get ready to push through

Starting your own bookkeeping business can be quite the emotional roller coaster. 

Especially if you feel you are on your own. 

In the beginning worrying about where you will find clients, whether you are falling too often on your financial backup, and whether your business will be successful, are all thoughts that cause a lot of stress. 

And that stress will often make you wonder whether you should push through, or give up.

Surrounding yourself with family and friends who can offer emotional support during these shaky times can help you to stay vigilant, push through, overcome those fears and become a successful bookkeeper.

3. Devote time to learn

Bookkeeping software and tools get constant updates, and so should you. Keeping a tab on new features and tools helps you to offer relevant services that your prospective clients need. 

Furthermore, by continuously learning from peers and professional events you can tailor your business tools and practices to suit your client’s specific needs.

“Listening to everybody really, you know, sort of brought home to me that I don’t need to use what everybody else is using. I do what I need to make my business work for me.” 

– Jana Aldhaibi, Owner,  First Class Accounts – Bass Hill

While a franchise like First Class Accounts gives you the tools and guidance to succeed, you need to dedicate the first twelve months to really growing your business, networking, and building processes that work for you.

Essential Skills for Bookkeepers

Being a good bookkeeper means continually learning and adapting to new rules and regulations by the ATO (Australian Tax Office). 

While owning the technical aspects such as proficiency in bookkeeping and accounting software is needed, you also need to work on your soft skills.

Be detail-oriented

Precision is key in bookkeeping, as even small errors can have significant impacts. 

Sometimes, entering the wrong digit in a transaction can lead to incorrect financial reports and potential tax issues. 

Focus on the details, and a good habit to keep is to double-check the books.

Keep an efficient schedule 

As a bookkeeper, you need to manage multiple clients and maintain order in their workflow. 

For instance, a bookkeeper might use a detailed schedule to keep track of deadlines for several clients, ensuring that no task is overlooked. Meeting your deadlines consistently while juggling multiple prospective clients is a must.

Learn bookkeeping software

Choosing the right bookkeeping software before you start a bookkeeping business is important for keeping your books clean. 

Some popular and efficient software options are MYOB, Xero, and QuickBooks. 

For instance, using MYOB, a bookkeeper can easily generate invoices, track expenses, and prepare financial statements, such as balance sheets and profit and loss statements.

Understand bookkeeping and accounting principles

Knowledge of double-entry bookkeeping and financial reporting is fundamental to providing reliable services. 

Knowing how to properly record a business transaction ensures that financial statements are accurate and comply with accounting standards.

Build your analytical skills

Bookkeepers need to interpret financial data and provide valuable insights to help businesses make informed decisions. 

By analysing a cash flow statement, a bookkeeper can advise a small café owner on managing their cash reserves more effectively.

4 Steps for Starting a Bookkeeping Business

Now that you have a better understanding of the skillset you’ll need, it’s time to figure out how to start your bookkeeping business. 

1. Pursue a bookkeeping certification

To gain credibility and trust from clients, consider becoming a certified bookkeeper. 

Certifications such as the Certified Public Bookkeeper (CPB) from the Institute of Certified Bookkeepers (ICB) can enhance your qualifications.

However, even after obtaining a certification, staying on top of industry regulations and changes in tax laws can be challenging.

Having a network of like-minded professionals like the First Class Accounts Franchisee program is a great place to get the support you need to always stay on top of industry regulation changes.

2. Choose Your Business Structure

Choosing the right business structure for your own business is a vital part of how you will conduct business. It can determine whether you lead a successful business in the future as well. 

So, why is your business structure so important? Mostly because it determines your tax obligations and liability. In Australia, your business structure options are:

Sole Trader

You hold all responsibilities and benefits as the sole owner of the business. For example, a sole trader bookkeeper manages all aspects of their business independently.

Company

A company operates as a separate legal entity, providing limited liability protection. A bookkeeping company might choose to register as a company to separate personal and business assets.

Partnership

A partnership is run by two or more entities, sharing responsibilities and profits. For example, two bookkeepers in Sydney might form a partnership to combine their skills and client base.

Trust

A trust is managed by a trustee for the benefit of others, offering potential tax advantages. For instance, a family-owned bookkeeping business in Adelaide might operate as a trust to manage and protect family assets.

Franchise

By joining a franchise like First Class Accounts, you don’t have to reinvent the wheel all on your own. 

You’ll have access to a proven business model, ongoing support, and a network of experienced professionals to guide you. This support can make all the difference in ensuring your business thrives in the competitive bookkeeping industry.

3. Create a Business Plan

A solid business plan outlines your business model, target market, services offered, and financial projections. This plan will guide your business decisions and help secure funding if needed. It’s practical, and it provides you with options. 

After all, a detailed business plan can help a bookkeeping business attract investors or secure a bank loan. It can also help you set aside a backup fund to run your business on while you land your first couple of clients.

4. Tackle the Administrative Obligations

Now that you have a solid business plan, it’s time to start building your own business. To do so you need to tackle a few administrative tasks:

Choose Your Business Name

Choose a unique and professional name that reflects your services. A well-chosen name can help you stand out and attract clients.

Create Your Business Bank Account

Set up a dedicated business bank account to keep your finances separate from personal accounts. Keeping your bookkeeping business separate from your personal accounts is the best way to have a clear overview of your financial records. Plus, it will also simplify your own bookkeeping in the future.

Consider Investing In Professional Indemnity Insurance

Investing in professional indemnity insurance helps to protect yourself against possible claims of negligence. It covers legal fees, court costs, and any damages awarded if a client claims that your advice or services caused them financial loss. 

For example, if a mistake in your bookkeeping services leads to an incorrect tax filing and subsequent penalties for your client, professional liability insurance can help cover the costs of resolving the issue. 

Pursue Your Business License

Ensure you obtain all required permits and licenses to operate legally. Different regions and local councils in Australia have specific requirements for businesses. 

This can include registering your business name with the Australian Securities and Investments Commission (ASIC), obtaining an Australian Business Number (ABN), and applying for any local council permits or licenses specific to your area of operation. 

Adhering to these regulations is crucial to avoid fines and legal issues, and it also reassures clients that your business operates legally.

Practice Management Software

Investing in practice management software can make running your bookkeeping business much easier. This type of software helps you organise and manage your day-to-day tasks efficiently. It can combine all your bookkeeping tools in one place and often includes features like managing bookkeeping clients’ information, scheduling appointments, and keeping track of tasks. 

By using this software, you can save time, improve how you communicate with your clients, and ensure that everything runs smoothly.

Bookkeeping Services You Can Offer

Now that you have the administrative work out of the way, it’s time to consider what services you can offer to potential clients. 

To start a bookkeeping business you need to understand and offer relevant services to potential clients like:

Reconciliation and Financial Administration

Generally, bookkeepers handle the day-to-day financial administration of running a business, which includes reconciling accounts by matching receipts with transactions in cloud accounting software. 

This ensures all financial documents are accurate and up-to-date, helping maintain a clear financial picture. A great bookkeeper will ensure everything runs smoothly before reaching out to an accountant.

Setting Financial Systems For New Businesses

Bookkeepers assist in setting up financial systems for new businesses, ensuring a solid financial foundation. This can include anything from systems migration, accounting software implementation, maintenance, or new office systems setup.

Payroll, BAS, and PAYG Experts

Bookkeepers are responsible for managing payroll, Business Activity Statements (BAS), and Pay As You Go (PAYG) withholding. This includes overseeing employee payments, calculating taxes, and ensuring compliance with ATO regulations. 

A bookkeeper ensures that employees are paid accurately and on time, taxes are correctly calculated and filed, and all financial obligations are met without error. 

GST Management

A critical role for bookkeepers is managing GST, ensuring businesses claim the appropriate amount and comply with tax regulations. This involves calculating GST, preparing BAS, and submitting the necessary documentation to the ATO. Bookkeepers focus on GST management, helping businesses avoid costly mistakes and penalties by managing GST risk effectively.

Accounting Software Proficiency

Bookkeepers should be proficient in using various accounting software to manage financial records accurately and efficiently. As a bookkeeper, you need to have the latest training in Australia’s leading accounting software, including MYOB, Reckon, Xero, and Intuit QuickBooks. 

Compliance and ASIC Registration

Bookkeepers play a key role in managing renewals and ensuring compliance with regulatory requirements, including ASIC registration and company registration fees. This prevents compliance issues and maintains the legal standing of the business. You have to handle these tasks meticulously, ensuring that your clients meet all regulatory obligations.

How To Find Your Clients?

So, you’ve set up your bookkeeping business, now all you need is to attract prospective clients. A good part of attracting clients is investing in a marketing strategy. 

Find Clients Through Marketing

If you don’t have a large budget, you can start small and hang posters locally, dabble in some digital marketing opportunities or attend networking events among fellow bookkeepers. If you have some budget aside for marketing, you should also consider creating a bookkeeping website to boost your digital marketing efforts. 

Find Clients Through Networking

As a newly established bookkeeping business, local networking events are your chance to become a part of the bookkeeping community and get some support.

“I did a lot of networking in my initial, say, ten years of the business, says bookkeeping franchise owner Serge Crismale, of First Class Accounts – Picton

Attending industry conferences and joining business networks are pivotal to gaining visibility and acquiring new clients.

“90% of my revenue was generated through business networking.”

– Serge Crismale, Owner, First Class Accounts – Picton 

In fact, sometimes the hardest part can be getting out there – but your ideal customers are right there in your community. 

Serge Crismale owner of First Class Accounts – Picton

The important thing is to go out and meet them, understand their needs, and chat with them about what you do and the problems you solve. 

Securing Your Bookkeeping Business’s Future

Starting your own bookkeeping business in Australia is a lot of work. 

You need to create a solid business plan, get the right qualifications, tackle administrative obligations, and create a marketing plan to attract potential clients. Doing it on your own is exhausting.

But, you don’t have to do it alone! 

If you prefer not to undertake this entire process on your own, consider joining a franchise like First Class Accounts

As a franchisee, you’ll benefit from established systems, ongoing support, and a recognised brand, allowing you to focus on providing excellent service to your clients.

And finally, if you’d like to give back to your community being a franchise bookkeeper is a very fulfilling job. 

When you work locally you can see how small businesses grow and develop over time, and how you help shape the future of your local community through it in a way.

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