The rise of fintech is transforming how businesses large and small operate, enabling them to streamline their back-office functions with powerful tools that can lower costs and give them essential, real-time insights to maximize their profitability. This is driving the demand for skilled bookkeepers, accountants and other financial professionals who can help companies get the most out of this newer class of technology. At the same time, companies are increasingly outsourcing their bookkeeping and accounting needs to independent professionals. These people run their own bookkeeping or accounting business, and they work remotely, often on a freelance basis.
These trends create a wealth of opportunity for financial professionals who want to become independent contractors or business owners. Consider that more than 90% of company executives have had a tough time finding skilled professionals in accounting and finance, according to a 2018 survey by Robert Half Finance & Accounting.
Thinking of striking out on your own? Follow these four tips for starting a home-based bookkeeping or accounting business.
1. Polish Your Skills
Your prospective clients will want to know that you have the experience and academic credentials to show you’re qualified to handle their bookkeeping or accounting needs.
Bookkeepers may want to check with the American Institute of Professional Bookkeepers or the National Association of Certified Public Bookkeepers for details on closing any credentialing gaps. You may also consider certification programs for accounting software to help demonstrate your experience.
Accountants typically have an accounting degree or a graduate certificate in finance from an accredited university. If you already have your degree and want to further broaden your marketability, consider becoming a certified public accountant. This involves preparing for several CPA exams and then doing continued course work afterward to maintain the certification.
Work experience will also help sell your skills to clients. They’ll want to know that you have experience working with the latest fintech software. Increasingly, businesses are relying on integrated applications to manage their cash flow, payroll and bookkeeping more efficiently and accurately, which provides more visibility than standard, do-it-yourself accounting software.
You’ll want to be able to show that you can do more than reconcile accounts and cut payroll checks. Accountants especially should know how to mine data from financial software to help clients manage their cash flow and stay ahead of any financing hurdles.
2. Start with Freelance
You’re eager to start your own business, but there’s no need to rush into it. Get your footing by working as an independent contractor while you keep your day job.
This transition is easier than ever as more businesses embrace hiring contract employees who work remotely. The internet, automation and other technological innovations are making it easy for companies to hire workers on a freelance basis.
Contract workers also cost less money, posing less of an overhead risk for companies, which should help make you an attractive option.
Some 65% of executives say their external workforce of freelance hires is essential for operating at full capacity and meeting demand, according to a report by MBO Partners. Online networks make it simple for bookkeepers, accountants and other skilled professionals to connect with employers.
Being an independent contractor is a good first step to gain more experience and build a roster of clients before you’re fully prepared to ditch the day job and live off the income from your home-based business.
3. Create a Sales and Marketing Plan
It’s not uncommon for a budding freelance bookkeeper or accountant to land clients early on through friend or family connections. This may be that brother-in-law with the plumbing business who needs help modernizing his books, or a neighbor in need of a hand at the last minute to meet a tax filing deadline.
Beyond mining personal connections, every freelance business needs to find ways to expand their potential clientele. This is done by making a sales and marketing plan.
The key is to find high value, but low-cost ways to gain exposure in the channels that are most likely to reach would-be clients. When you’re starting out, the most affordable approach is to establish your business’ online presence.
You’ll want to create a website that can quickly showcase your experience and skills. You can use any number of do-it-yourself platforms for creating a business website. It’s also a great idea to create a page on the big social media portals, especially if you have a large network of friends and acquaintances.
And while you’ll want to highlight your experience and ways you can help clients tackle their financial management needs, it’s a good idea to let your personality and values shine through. That will give would-be clients more of an opportunity to relate to you beyond your resume.
Employers looking to hire you will want to know why you’re the right fit for their company culture, and that goes beyond experience. Your website is a key element of branding yourself, so it should represent how you want to be seen.
Establishing your business’ online presence is a basic step, so you shouldn’t stop there. Perhaps the most effective way for freelance professionals to get direct exposure to clients these days is on an online job marketplace specifically for bookkeepers, accountants and other financial professionals.
More than mere job boards, some virtual assistance networks allow you to create a free profile where you can detail your work experience, skills and fees. The portal will then match qualified bookkeepers and accountants with companies based on your experience and the company’s needs.
Eventually, word-of-mouth will also help you win over new clients, but establishing your business’ online storefront and ensuring you have a presence in the virtual freelance job marketplaces is a great start.
4. Prepare for Tax Time
Being a financial professional means you’re likely more savvy than most business owners about taxes and the demands that Uncle Sam puts on small businesses and independent contractors.
To make your foray as a small business owner, you’ll want to prepare yourself to tackle the paperwork and deadline requirements set forth by the IRS. Central to this is figuring out (and saving for) the quarterly tax withholding payments you’ll need to make to the IRS.
Whether you’re a small businesses owner or self-employed, check to make sure you’re calculating your quarterly tax withholding payments properly.
The IRS recently rolled out an online calculator that’s designed to make it easier for users to figure out how much of their pay should be going toward their tax bill under the tax overhaul that was signed into law in December 2017.
Small business owners who draw a salary as an employee of their company can use the IRS tool to calibrate their individual quarterly payments. This should help you estimate how much of your income you should be setting aside so you can cover the payments.
Venturing on your own with a bookkeeping or accounting business is a challenging and exciting endeavor. Follow these tips and take the time to learn more best practices from mentors and other business owners to avoid any pitfalls along the way.
