How To Start A Virtual Bookkeeping Business – You know what you are doing. Set-up costs are low, there is a low barrier to entry, and training is readily available. A virtual business easily crosses national borders and time zones so you can work when you want.
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How To Start A Virtual Bookkeeping Business
I started my virtual bookkeeping business when my health forced me to retire from bookkeeping. It was a blessing as my personal life became more complicated.
How To Start A Virtual Bookkeeping Business (in 5 Steps)
Having a child with multiple disabilities means that no matter how good my health is, I will never be able to work a traditional 9-5 job.
Instead, I can create my own time and choose to do work that I love. I chose not to do rows because I didn’t like them.
All my clients know my daughter’s needs and contract with me. They knew I might not be available temporarily if she was re-hospitalised. They know that email is my preferred method of communication and that I usually work at night. Everyone understands and obeys.
Virtual accounting is a great option for someone who wants to work from home and has accounting experience.
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You can take on clients, set your own hours and create a flexible schedule. There are no start-up costs or inventory required, so you can run it with just a computer and an internet connection!
With virtual bookkeeping, there are no limits to what you can do as long as you stay within the legal limits. You can open your own virtual company that offers services worldwide.
This is a great opportunity for anyone who wants more freedom in their life without sacrificing financial security. If you’re on a financial footing, the extra income can help pay off debt.
Come up with business names and write them all on a piece of paper. Then start eliminating words based on the following criteria:
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Your business name is the first thing people see when they start looking for accountants, so it’s important to choose something that reflects what you do.
If you want to start your virtual bookkeeping business with the same name as your company, you will need a URL (website). If the name is in .com format, start with it and register now!
Make sure you google the words you are considering. This will help avoid confusion with other existing businesses and avoid awkward or confusing overlaps.
Also search your country’s government business register. A new company cannot be registered using an existing company name. Even if some letters or words are different, this should avoid confusing future customers.
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You can take full advantage of your social security number and continue to work as a sole proprietor without forming a business entity. However, there are concerns about identity theft using your SSN and liability considerations, especially if you are dealing with other people’s money.
You are asked to share your W-9 with other companies so they can properly report the money paid to you, and this form requires a taxpayer identification number. This means you lose control over who has access to your SSN.
A Limited Liability Company (LLC) is a simple business entity with one or more individuals. The company’s net income (revenue less expenses) is reported on the owner’s personal taxes.
Because business income is reported on an individual Form 1040, it is taxed at your personal rate, not the business rate. Compared to starting a business using your social security number, this type of business has a much smaller impact on your taxes. However, even if you don’t “pay,” you are still personally responsible for paying taxes on your business income.
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An LLC protects the owner from lawsuits. Basically, if you sue and lose, the plaintiff can only take your business assets, not your personal assets. Your home is safe.
Incorporation creates a legal entity separate from the owner(s). The corporation is responsible for paying business taxes and the owners are responsible for paying personal income taxes as employees of the corporation.
This means that there are more tax factors involved, so I definitely recommend discussing this with a CPA. I asked a CPA for advice on when to incorporate or stay as an LLC. For me, he advised me to start a company once my business has reached a high level of income… so you don’t necessarily have to start as a company. LLCs are a mandatory requirement for most startups.
If you have a business name and organization, you must register with your state government and the IRS.
How To Start A Bookkeeping Business
This is a step towards ensuring that the government approves the deal. State governments are responsible for forming businesses and collecting state taxes, while the IRS handles income tax collection and FICA withholding (Social Security and Medicare taxes).
In most states, the Secretary of State’s office administers business licenses. Use this list to find the website for your country. The office may also be called a business office or business agency.
It’s been seven years as a business owner and I’m only registered in my home state, which is the only state I have clients in. It is important to remember that you may need to register in additional states later.
An Employer Identification Number (EIN) is the equivalent of a business’s Social Security number, so having an EIN is important when starting a virtual account business.
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Applying for an EIN is a fairly simple process on the IRS website, although it may take some time to be fully processed. The IRS is backed up like crazy after Covid.
Depending on your country, you may also need a national identification number. Check your country’s website for requirements.
If you form a corporation in a state that collects state income taxes, you will need to obtain a state income tax withholding identification number. Again, check with your country’s government for clarification. I have found that calling and talking to a person gets clearer results than searching the state website.
Setting up a separate business checking account is very important. When you work as an accountant, you understand how painful it is for clients to juggle personal and business expenses. It makes accounting confusing, wastes time, and doesn’t make your business look fair.
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I recommend for personal purposes to use the same bank where you have already worked. It makes it easier and faster for you to pay yourself by transferring money to your personal checking account at the same bank.
Of course, it is not necessary to use the same bank. You can conveniently use individual banks to account for processing delays between banks.
Once your business bank account is set up, use it only for business expenses. You can and do pay yourself from your company, but you can also do so by transferring money to your personal account or by writing a cheque. Do not use the company account for personal expenses.
As someone who deals with other people’s money, it is important to act confidently, but to protect yourself. Chances are you will make a mistake that will cost your client money. You can sue. A liability insurance policy will protect you and your business if this happens.
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This means your mistake was an accident, so don’t plan on a liability insurance policy that protects you against intentional mistakes. To be safe, don’t be a criminal. No matter how tempting or easy it seems, don’t think about it.
I use an online insurance broker for my business insurance needs. I pay $300 a year for my $1 million in coverage. With no employees and a relatively small business, that’s a small price to pay for peace of mind.
Accounting may seem like an easy job (especially compared to a CPA job), but I’m sure you either realize it or not.
Some people seem to assume that there are accounting and related professions, including bookkeeping. My observations of fellow college students support my theory, and I think you know if you’re in accounting or bookkeeping.
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If you want to start a virtual bookkeeping business, but you don’t have the necessary skills, you can start working as an assistant. I know it’s not always the answer, but it’s the best way to learn practical ways to run a business.
Attending in-person or virtual accounting-related workshops and seminars can also be helpful. Some are free with local Chamber of Commerce membership or Small Business Administration events.
Quickbooks is one of the most popular accounting software options for small businesses. Intuit, the parent company, offers several training options. I’m a Quickbooks wholesaler, so my customers get a discount on the monthly subscription, but I also have training.
I’ve taken Quickbooks courses, but if I run into a particular problem, I turn to Google. Intuit is the creator of Quickbooks
A Guide To Starting A Virtual (online) Bookkeeping Business In 2023
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Hi, I am Erick Norman. A blogger specialist in Kitchen Design.