Crunching the Numbers: How to Become a Freelance Bookkeeper

Freelance workers have taken over the world. Okay, maybe not quite, but 33% of U.S. workers will move to freelance work over the next couple of years.

This force of freelance workers includes bookkeepers. If you have a knack for numbers, especially business accounting practices, you can join this group offering services from the comfort of their home.

Understanding how to become a freelance bookkeeper will help you determine if this opportunity proves right for you. You never want to enter an opportunity like this unprepared for what’s expected of you.

Bookkeeper Job Description

Many people confuse the jobs of accounting and bookkeeping. Accountants deal with the analyzing and summarizing of financial records. They also deal with the tax preparation process, whereas bookkeepers do not.

The biggest difference between accounting and bookkeeping deals with the processes involved. Bookkeepers deal with recording the financial transactions involved in daily business. This includes

  • Keep track of spending
  • Keep track of payments received
  • Posting transactions
  • Account reconciliation
  • Handling payroll
  • Preparing some financial reports

Bookkeepers help maintain that daily transactions get processed and posted correctly. This requires an understanding of the debit and credit process. This also requires an understanding of basic accounting software.

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Career Opportunities in Bookkeeping

Bookkeepers often work alongside human resources within a business structure. The good news for those interested in freelance work, bookkeepers can also work from their own homes, acting as a contractor to work with different businesses.

A freelance bookkeeper does their best work if they pick a business niche to offer their services. If you have an interest or knowledge in a specific industry, you can market your services to those in that industry.

Bookkeeper Salary

The average salary for entry-level bookkeepers starts around $39,000. This average relates to general bookkeepers within a business setting.

For a freelance bookkeeper, you have more leeway with the fees you set. If you know how to market yourself, you can make more than $48,000 per year starting out.

How to Become a Freelance Bookkeeper

While it’s not required to have a degree or certification to work as a freelance bookkeeper, you might still want to consider participating in a certification program. Many online options exist to get the training needed.

Whether you decide to go for certification or not, you still want to set up your business to follow all state laws. These state and federal laws govern how to start your business without legal issues.

Applying for Licenses and Permits

You don’t need certification to begin a bookkeeping business. You do need proper licenses to set up the business though.

You will need a business license to legally start your business. This involves applying for a tax identification number. You also need to determine what type of business you’ll start.

You can set up as a sole proprietor, an LLC, a partnership, etc. This means you’ll need a business name to apply for everything.

You should also set up a business address. If possible, set up a PO Box to protect your privacy.

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The Business Plan

To apply for the required licenses and permits, you need a business plan. The business plan lays out your business mission and goals.

This plan helps you determine how to prepare your business for success. You’ll lay out your assets, your expenses, your marketing plan, and lay out your plan for making a profit.

Make sure you set up a business bank account along with these preparations. The bank account will help you keep your business finances separate from your personal.

Accounting Tools Needed

You also want to ensure you have the necessary tools to get started. This includes the software and devices needed.

Make sure you have a locking file cabinet or other means to protect client information. You want to ensure that nobody has access to their private financial records. You should also look into security software for your laptop or computer.

The basics, such as a laptop and printer are also necessary. You might consider keeping bookkeeping paper on hand to help you reconcile transactions, but this isn’t necessary.

Software

You also need to make sure you have the proper software available to do your job. You can find inexpensive options for all your needs.

Most importantly, you need basic accounting software to keep up with financial records for your clients. You can use simple online software such as Quickbooks. For as little as $3 per month, you can use Quickbooks to keep up with documentation.

Make sure you check out all your options. You want to pick accounting software that will work for your specific needs.

You also need a way to receive payments from clients. The easiest way to do this, involves an online payment option. A simple PayPal business account or other online option works well.

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Set Up Service Bundles

You’ll want to set up bundles based on the services you want to offer. Just like any other work-from-home option, you’ll want to bundle services to make the billing process easier.

You can bundle based on individual services, or services that compliment each other. For instance, you can create individual bundles of

  • Account reconciliation
  • Transaction posting
  • Bill payment
  • Payment collection
  • Report processing
  • Payroll

You can also combine payment processes. Or posting and reconciliation. Base the bundles on what works best for you.

Then you need to determine how much each bundle is worth. The easiest way usually involves monthly payments based on the amount of services offered. You can also set up specials for combined bundles.

Market Your Business

To prove successful with your freelance bookkeeping business, you’ll need to market effectively. This involves both digital and traditional marketing tactics. Marketing will likely prove the most difficult task involved with your business.

Traditional Marketing

The easiest way to begin marketing includes creating promotional materials. You’ll want to get business cards, flyers, brochures, etc.

These promotional items help in networking settings. You’ll want to participate in small business networking opportunities to meet the people who will want to use your services. Conferences and mixers help you spread the word.

These opportunities work for local marketing. You want to reach outside of the local market though.

Digital Marketing

The great thing about freelance work is you’re not tethered to a specific geographic location. You have the opportunity to open your services to anyone that can find you online.

Your most important marketing tool will include a website. You can set up your bundles on a services page and provide contact information. You can also use your website to create helpful content to show your knowledge.

Create blog articles, videos, and/or audio to share content. This will help you highlight the importance of the different types of bundles you offer.

You’ll also want to set up social media pages for your business. This acts as another way to share your valuable content.

An email list also helps spread the word. You want to collect as many contacts as you can. This helps you share discounts and specials and allows people easy access to share your content with others.

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Is Freelance Bookkeeping Right for You?

Bookkeeping requires a basic knowledge of math. You’ll want to understand the basics of debit and credit posting, as well as payroll and basic accounting laws.

Besides math skills, you also need good organizational skills. It’s important to keep up with all the documents and reports necessary and keep everything in order.

You also need a good eye for detail. You need the ability to catch mistakes before they become a real problem.

You need a good head for business, both for your own business and to understand the needs of your clients. Understanding how the processes work will help you work through the transactions for your clients.

Other Freelance Options

Does the idea of how to become a freelance bookkeeper set a spark in your mind? Whether you want to become a bookkeeper, or you think another option will work better, freelance opportunities prove a great way to get away from traditional work situations.

What’s your greatest strength? For more freelance and entrepreneur opportunities, check out the Entrepreneur page.

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