Starting a Bookkeeping Business from Home
Anyone can start a bookkeeping business from home. You do not need a formal qualification to begin, although professional training or certification can significantly improve your credibility and confidence. The flexibility, low overhead costs, and scalability make bookkeeping one of the most accessible home-based businesses today.
Understanding What Bookkeepers Do
Bookkeepers are responsible for managing the financial records of businesses. This includes tasks such as:
- Recording daily transactions, invoices, and receipts
- Reconciling bank statements
- Tracking accounts payable and accounts receivable
- Producing reports to help business owners understand their financial health
While accountants focus on tax planning, compliance, and financial analysis, bookkeepers create and maintain the financial information that accountants rely on.
How Many Clients Do You Need?
On average, a self-employed bookkeeper typically manages around 30 small clients once established. However, this number can vary depending on the size and complexity of each client’s business.
A simple way to calculate your income potential is to work backward from your target annual earnings.
Example Calculation
| Annual Income Goal | Average Number of Clients | Annual Fee per Client | Monthly Fee per Client |
|---|---|---|---|
| $60,000 | 30 | $2,000 | $166 |
| $90,000 | 30 | $3,000 | $250 |
By adjusting your rates or the number of clients, you can balance workload with desired earnings.
Tip:
Keep in mind that every client will have different needs. Some may require a few hours of work per month, while others might need weekly or daily attention.
Deciding Which Businesses to Target
The size and type of business you target will influence not only your pricing but also the level of complexity in your work.
- Micro businesses: Fewer than 5 employees, ideal for beginners as their transactions are manageable.
- Small businesses: Between 5–20 employees, may need more detailed reporting and payroll support.
- Medium-sized businesses: More than 20 employees, often require accrual accounting, multi-account tracking, and liaison with accountants.
Practical Example
A local coffee shop with 3 staff members might need only monthly reporting and payroll processing. In contrast, a regional trade business with 15 staff will need more complex accounting, such as managing invoices for multiple projects and tracking assets or stock.
Aligning with Accountants, Not Competing
It is important to understand that bookkeepers and accountants complement each other. You are not competing with accountants; instead, you are part of the same financial ecosystem.
- Bookkeepers handle daily records and ensure the accounts are accurate and up to date.
- Accountants use that information to prepare financial statements, conduct tax assessments, and provide strategic advice.
Many accountants dislike routine bookkeeping tasks. By developing good relationships, accountants can refer bookkeeping clients to you, while you refer tax and advisory work back to them. This mutual exchange can be a steady source of business for both sides.
Minimizing Overheads with a Home Office
One of the biggest advantages of running a bookkeeping business from home is the low overhead cost. You can claim a portion of your household expenses if part of your home is used exclusively for work.
Example of Claimable Expenses
| Type of Expense | Claimable Portion (if 1 of 6 rooms used) | Examples |
|---|---|---|
| Utilities | 1/6 | Electricity, gas, water |
| Internet & Phone | Proportion of business use | Broadband, landline |
| Mortgage Interest or Rent | 1/6 | Monthly interest payments or rent |
| Insurance & Maintenance | 1/6 | Building insurance, repairs |
Important Note
If you claim a portion of your property costs for business use, it may affect your capital gains tax if you sell your home later. Always seek tailored advice from your accountant before making these claims. If you do bookkeeping work for an accountant, they will often be glad to guide you on this topic.
Building Solid Foundations for Your Business
Before you start promoting your services, ensure that you have a few key systems in place:
- Reliable bookkeeping software (such as Xero, QuickBooks, or Wave)
- A clear pricing structure and service list
- Professional branding, including a business name and basic website
- Secure methods for managing sensitive financial data
These foundations not only help you operate efficiently but also create a professional impression that builds client trust.
Next Steps
In Part 2 of this article, we provide a detailed, step-by-step guide on how to launch your own bookkeeping business from home, including software setup, client onboarding, and marketing strategies.
If you would like to understand more about bookkeeping and refresh your skills, join our FREE bookkeeping course. It is a perfect starting point for anyone serious about building a successful bookkeeping business.