If you’ve been researching ways to make money, you’ve probably read an article or two that suggests you learn how to become a bookkeeper.
There are good reasons behind that suggestion: bookkeeping is a low-cost business idea, it’s a flexible job, you can work from home, and you can earn a decent amount of money without formal training.
So if you’re looking for a profitable side hustle, I’m going to explain everything you need to know about starting your own virtual bookkeeping business.
How to become a bookkeeper in 2020
What do bookkeepers do?
First, bookkeepers are not accountants.
A lot of people think that bookkeepers and accountants are the same thing, but that isn’t the case. They have common goals, but there are key distinctions that make bookkeeping a job that requires less training and experience to get started.
Bookkeepers record daily financial transactions for a business, and accountants interpret those financial transactions.
A bookkeeper can be responsible for paying bills or collecting payments for a business. They also update financial records, check them for accuracy, receive and record receipts, reimburse work-related expenses, and manage payroll.
Bookkeepers use specialized financial software or computer spreadsheets to record all of that financial data.
Accounting is more subjective, and it can be used to reveal what’s going on with a business's finances. Accountants prepare financial statements, analyze the cost of running the business, plan and prepare taxes, do financial forecasting, and help business owners understand the impact of financial decisions.
Read more at 13 Legitimate Work From Home Jobs (Earn an Extra $1,000 Per Month in 2020!).
How much does a bookkeeper get paid?
According to the Bureau of Labor Statistics, the median pay for bookkeepers is $41,000 per year. That’s just under $20/hour. These numbers are for bookkeepers who work as full-time, salaried employees.
Freelance bookkeepers who work remotely usually earn more than that – closer to $30-$40/hour or more after you’ve gained some experience.
There are other benefits to working for yourself too. You can work from home, pick your own hours, set competitive rates, and stack clients to grow your business.
Read more at Self-Employment vs. Being Employed: Which Is Better?
What skills do you need to become a bookkeeper?
Bookkeepers don’t need a degree to get started, and some start working with zero experience and gain on-the-job training (more on this a little further down). But training and experience aside, there are a few things every bookkeeper should be good at:
- Math: Your job is working with numbers, so having solid math skills is important. This job doesn’t require high-level math, but you should be able to track credits and debits without financial software if needed.
- Basic computer skills: You should know your way around Excel or Google Sheets.
- Attention to detail: Small discrepancies can make a big difference when it comes to a business’s finances. You should be able to keep accurate records down to the cent and spot even the smallest errors.
- Problem solving: If there are errors, you need the skills to fix them. Mistakes aren’t always obvious, so you should be able to create and execute a plan to find and resolve mistakes.
- Organization: You might be managing the books for multiple clients, or recording lots of transactions for one client. Even just figuring out how to work from home requires good organizational skills.
Bookkeepers also need to have a high level of integrity and transparency. Tracking a company’s finances is a serious business. You have to make the right choices if you spot fraud or misuse of funds.
Read more at 22 Best 2020 Side Hustle Ideas (Make $1,000+ Per Month!).
How do I become a bookkeeper with no experience?
There are some necessary skills to start working as a bookkeeper, but there are different routes you can take to learn those skills. Here are the pros and cons of each.
Learn on your own
This is the most inexpensive way to get started – research and learn as much as you can about bookkeeping on your own. You’ll need to learn how balance sheets are read, get familiar with bookkeeping software like Quickbooks, how to create cash flow statements, and more.
The downside of becoming self-taught is that you don’t have anyone making sure that you’re learning all of the necessary skills or teaching you best practices.
As someone who learned how to start a blog on their own, there’s a steep learning curve when you go at something like this on your own. There’s a lot of trial and error, and you have to be extremely driven.
Online bookkeeping courses
This is a good middle ground between learning on your own and more formal training because you can still learn at your own pace, but you’re guided by people who know exactly what they’re doing.
One popular course is Bookkeeper Launch. It’s taught by Ben Robinson, a former CPA who sold his firm in 2014 so he could focus on teaching people how to become a bookkeeper from home.
Bookkeeper Launch teaches you the most current bookkeeping skills, how to create efficient systems, and how to find clients that need your services. The course comes with unlimited email support, live Q&As, and access to a specialist lawyer to answer any of your legal questions.
This approach is good if you’re interested in working for small business owners, like freelancers or solopreneurs, who want to outsource their bookkeeping tasks.
Become a certified bookkeeper
This is the longest path to becoming a bookkeeper, and it’s also the most expensive. Courses can cost anywhere from $1,500-$2,500, and there’s also the cost of certification exams, which can run $100-$500.
The upside is that your education and training tell potential clients that you have an industry-standard education. These programs are highly focused on the practice of bookkeeping, and less on how to start and run your own bookkeeping business.
If you’re interested in this option, you’ll want to look for a certification program that meets your needs, including whether you want an online or on-campus program. Most local community colleges offer these options.
You can also certify through a couple of different organizations:
- American Institute of Professional Bookkeepers: The AIPB offers certification and continuing education. There is a national exam, and you’ll need 3,000 hours of work experience to qualify.
- National Bookkeepers Association: This organization offers Bookkeeper Certification by completing an Accounting Fundamentals course and passing the Uniform Bookkeepers Certification Exam. You also need at least an associate’s degree in bookkeeping.
Setting up your virtual bookkeeping business
Besides the cost of training and certification (if you go that route), bookkeeping is a low-cost business idea overall. The equipment and software you need is minimal, but you’ll want to have it in place before you start looking for clients.
Here are 5 things you’ll need for your bookkeeping business:
- Computer: This is a no-brainer, but you’ll need a desktop or laptop computer, not a tablet or phone.
- Secure internet or wifi connection: I highly recommend getting a VPN (virtual private network) to protect the sensitive financial information you’ll be keeping your computer.
- Bookkeeping software: Some of the highest-rated choices are FreshBooks, QuickBooks, Sage, and Wave.
- Business website: This isn’t a must, but it’s a good way to list your services and build connections with clients. A Bluehost-hosted WordPress site is the way to go, IMO, and you can learn how to start one here.
- LLC or sole proprietorship: These are a couple of options for how to legally set up your business, and they determine your personal and tax liability.
How to find bookkeeping clients
This is what it’s all about: applying your skills and starting to make money. Your goal right now is to land your first client, and there are a few different ways you can do that.
Reach out to your inner circle
Your inner circle includes friends, family, and acquaintances, and it’s a good source of clients and referrals. Let your inner circle know about your new skills, send them a link to your website, maybe post on social media, and be open to discussing your services.
Start networking
I’m an introvert and really dislike talking to strangers, so it took me a while to start networking with other bloggers. But once I got over my fear, I’ve been able to gain so much. This is what I hear over and over again from lots of business owners and freelancers – networking was hard at first, but it’s opened so many doors.
As a bookkeeper, you can network through your local Chamber of Commerce, via Facebook groups, or other online groups for business owners. As long as you offer more than you take, you can gain valuable business advice and find clients.
Online job boards
Fiverr and FlexJobs are two online job boards where you can find bookkeeping work. They’re a little different:
- FlexJobs has a monthly fee to use the site and find jobs. There are remote work positions, full-time jobs, temporary options, and more. Learn more at FlexJobs Review: Is It Really Worth Paying For?
- Fiverr is a platform for freelancers to connect with potential clients. You can list different service options, create custom bids, and set your own fees. It’s free to list your services on Fiverr, but they take 20% of each job you complete. Learn more at Everything You Need to Know About How to Make Money on Fiverr.
Keep growing your virtual bookkeeping business
Your first client is just the start of it, and you can learn a lot about yourself and how to run your business. You’ll obviously grow your on-the-job skills, but you’ll also gain the confidence it takes to build your business.
And bookkeeping is a flexible enough job that you can grow it on the side of a 9-5 job or while working from home and raising kids. You can start tweaking your services and adjusting your rates as you grow.
The final word on how to become a bookkeeper
Bookkeeping is a legitimate work from home option, but it can be hard to land your first client when you’re starting out. I say that so you can manage your own expectations.
Still, it’s an option that can easily fit in with the rest of your life. This was a big part of why I decided to start a blog. I wanted to make extra money, and I could grow this site on the side of my teaching job before I went full-time with it.
Whether you want to start a bookkeeping business to make some extra cash to pay off debt, to save, or to one day quit your day job, research your options and eventually get to work.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
