Introduction
A bookkeeping side hustle is an excellent way to earn extra income while pursuing a passion in managing your own finances. With a growing demand for skilled bookkeepers and the potential for relatively high pay, starting a bookkeeping side hustle can be a great choice for entrepreneurs looking to make a difference. With some knowledge of basic bookkeeping, this activity can be extremely rewarding and lucrative. In this introduction, you will learn more about what is involved in starting a bookkeeping side hustle, the necessary steps to get started, and the benefits that come along with this rewarding pursuit.
Overview of Bookkeeping
Bookkeeping is the process of recording and tracking financial transactions related to your business. It typically involves recording all financial transactions in an organized ledger that includes every purchase, sale, income receipt, and payment as well as other types of activities such as taxes, investments, and expenses.
Starting a bookkeeping side hustle can be a great way to make extra money while still having a full-time job. You can work from home, set your own hours, and keep your overhead costs low. To get started, first decide which type of bookkeeping service you will offer (i.e. individual/family, sole proprietor, small business, or non-profit).
Once you have chosen the type of client that you want to work with it is important to know their specific needs. You will need to research common financial practices for each type of client, become familiar with their unique financial situation, and become certified in any necessary software.
When setting up your business you should create a bookkeeping checklist that outlines the tasks you will need to correct for each client and confirm that the information is accurate. This will help ensure that you get paid for your work on time and avoid any unnecessarily mistakes.
Finally, you should market your services to potential clients and get comfortable talking about your skills and experience. Most practical experience in bookkeeping is gained from working with a certified accountant. Don’t be afraid to reach out to professionals for advice and guidance.
Reasons to Pursue a Bookkeeping Side Hustle
A bookkeeping side hustle is a great way for entrepreneurs to make extra income on the side. With an increasing demand for financial services in physical and online businesses, bookkeeping has become a crucial skill to have when running a business.
One benefit of pursuing a bookkeeping side hustle is that you can use your existing knowledge and skills to your advantage. Since bookkeeping is a service-based profession, you can easily build on the foundation of what you already know about accounting and finance.
Additionally, you have the freedom to set your own schedule. You can choose the clients and projects you work on, and you can work when and where you want. This allows you to have a flexible work schedule and also fit in other commitments that you may have.
Another great thing about a bookkeeping side hustle is that it is relatively low-risk. You don’t have to worry about investing in physical locations or employees like other businesses. You also don’t have to worry about keeping up with trends or managing a team of people.
And finally, the financial rewards can be quite lucrative. With the right skillset and access to the right tools, you’ve got the potential to make good money and grow your side hustle into a thriving business.
Tip 1: Understand the Basic Principles of Bookkeeping
Bookkeeping is a critical skill to have for any side hustle. It involves tracking your financials, which is a key part of running a successful business. The basic principles of bookkeeping include:
1. Tracking Financial Transactions: To start, you’ll need to track each transaction (invoices, payments, and deposits) that occurs in your business. This data will allow you to understand how your business is performing financially.
2. Creating Financial Reports: Once you have the data gathered, you’ll need to create financial reports like a balance sheet or an income statement that can provide insight on your business’ financial performance.
3. Managing Tax Obligations: You’ll also need to ensure you’re fulfilling all of your tax obligations correctly. This means accurately tracking income and expenses to ensure all relevant taxes are paid properly.
4. Maintaining People and Supplier Records: You’ll need to keep accurate records of your employees and suppliers for tax and legal purposes. This data should include things like home addresses, social security numbers, and other contact information.
By understanding and implementing these four basic principles, you’ll be well on your way to creating an efficient bookkeeping system for your side hustle.
Identifying Assets & Liabilities
In order to successfully start a bookkeeping side hustle, it is important to identify assets and liabilities. A business owner’s assets are those things that give them financial advantages—cash, stock, accounts receivable, etc. Liabilities, on the other hand, are what a business owner owes—outstanding bills, vendor payments, tax obligations, loans, etc. The bookkeeper will use these two concepts to help keep track of the business’s financial health. They will be able to monitor when funds will arrive and when payments will need to be made. This will help them project cash flow, balance the business’s accounts, and inform financial decisions. Additionally, setting up proper bookkeeping will enable the business to monitor its taxes, debts, and income. This can be especially helpful when filing taxes or applying for a loan. Ultimately, it is important that accurate records are kept and that liabilities and assets are identified in order to successfully manage any bookkeeping side hustle.
Debits & Credits
Debits & Credits are the two basic components of bookkeeping transactions. They refer to the “sides” of a business transaction. When a business makes a purchase, the account that is charged (debited) is the expense account and the account that is credited is the asset account. When the business receives income, the account that is credited is the income account and the account that is debited is the liability account.
If you are looking to start a bookkeeping side hustle, you will need to have a good understanding of Debits & Credits and how they work with each type of transaction. You must know when to debit and credit accounts to accurately record the flow of money within a business. You must also maintain clear and orderly records of all financial data, following clearly defined procedures and processes for entering and manipulating information. Leveraging the right bookkeeping software will help streamline the financial data recording and reporting processes.
It is also important to develop strong communication skills to effectively work with clients and maintain a positive working relationship. Practice customer service skills and efficient analysis capabilities to help career-minded entrepreneurs make sound financial decisions. You need to also ensure data accuracy to provide timely and reliable information. Finally, it would be beneficial to stay up to date on the latest accounting guidelines and regulations. Knowing the tax law and bookkeeping procedures may also help the accuracy and completion of clients’ financial records.
Tip 2: Get to Know the Bookkeeping Software
Getting to know the bookkeeping software available is an important step in starting a bookkeeping side hustle. Make sure to read reviews and attend webinars or seminars to learn about the features and capabilities of the software, as well as how it aligns with your goals and bookkeeping needs. You will likely want to select a software that allows you to track income and expenses, generate reports, and various other important tasks. You will also want to make sure the software is optimized for your business type, whether a sole proprietor, LLC, partnership, or corporation. Many software systems also offer features such as automated invoice generation and payments, cloud storage, and data imports from bank accounts, allowing you to quickly and easily manage your bookkeeping side hustle.
Popular Bookkeeping Software
Starting a bookkeeping side hustle can require a fair bit of planning and organization, which is where popular bookkeeping software can come in handy. It can help streamline the management process, enable you to easily organize and monitor your finances, help automate and speed up routine tasks, and more. Popular bookkeeping software like QuickBooks, FreshBooks, and Xero can help you manage your income, expenses, bills, invoices, and taxes, as well as productivity tools like timesheets, reminders, and payroll management, and even customer relationship management (CRM) tools. For instance, QuickBooks has its own small business ecosystem, with features like business billing and tax preparation, payroll management, invoicing, time tracking, and more, while FreshBooks is more geared towards freelancers and entrepreneurs, providing specialized features such as project billing, client portals, and team collaboration.
Using one of these popular bookkeeping software solutions is a great way to get your bookkeeping side hustle off to a smooth start. It will help you to keep your finances organized and in check, as well as streamlining the time needed to complete routine tasks and managing customers. This will help you enjoy the freedom of a side hustle without having to worry about the administrative side.
Basic Features & Benefits
Basic Features & Benefits of Starting a Bookkeeping Side Hustle:
-Flexible working hours: You can work during the hours that are most suitable for you, which offers you the opportunity to find a balance between work and home life.
-Work from the comfort of your own home: You can avoid the need to commute to an office and eliminate the stress of doing so.
-Cost-effective: You can avoid the costs associated with renting an office space and purchasing supplies.
-Gain relevant skills: As you manage the bookkeeping side hustle, you will gain valuable skills in financial planning, budgeting, and data management.
-Opportunity for growth: You will have the opportunity to network with clients and potential partners, allowing you to establish yourself as a reliable bookkeeper and grow your business.
-Personal satisfaction: Starting a successful bookkeeping side hustle can provide you with a sense of accomplishment and job satisfaction.
Tip 3: Get Certified
Getting certified as a bookkeeper can be extremely helpful when starting a bookkeeping side hustle because it shows potential clients that you are qualified and knowledgeable about the field. While certification may not be required to do bookkeeping work, having it makes you more attractive and reliable. To obtain professional certifications, individuals must pass an exam or fulfill other requirements set by organizations such as The American Institute of Professional Bookkeepers (AIPB), the National Association of Certified Public Bookkeepers (NACPB) and the Institute of Certified Bookkeepers (ICB). Each organization offers different levels of certification, but most require knowledge and/or skills tests along with continuous education credits. Having this certification will also expand your knowledge and help you stay current in the bookkeeping industry.
Value of Certification
Value of Certification: Having a certified bookkeeper designation can help potential customers see your credibility, especially in the eyes of corporations and government agencies. It will also show that you are knowledgeable and well-trained in first-rate bookkeeping skills, particularly if you have certifications from industry-recognized bodies like the American Institute of Professional Bookkeepers.
Having a certification can give you more confidence in your side hustle. It can provide additional credibility and make you more competitive in today’s market. A certification, combined with relevant experience, will make you a more attractive candidate for freelance jobs or on-site bookkeeping roles. And if you are looking to start a business in bookkeeping, it will help provide evidence of your knowledge and capabilities to your potential clients.
What’s more, having a certification helps you perfect your bookkeeping skills, stay up-to-date on changes in the industry, and stay ahead of emerging trends and opportunities.
Finally, certification programs can provide a range of additional benefits such as networking opportunities, renewal credits, and listing in directories.
Resources for Learning & Certification
Learning and certification resources are essential for anyone starting a bookkeeping side hustle. Below are some helpful resources to get you started:
1. Free, comprehensive training:
• Bookkeeper Launch – A 10-week online course to teach you to start and run your own bookkeeping business.
• Xero’s “Certified Bookkeeper” program – An online training program that earns you official Xero certification.
2. Professional Certifications:
• Certified Bookkeeper (CB) from the American Institute of Professional Bookkeepers – Achieve the highest certification level within the bookkeeping profession
• Certified Public Bookkeeper (CPB) from the National Association of Certified Professional Bookkeepers – Receive certification for providing comprehensive bookkeeping services for clients
• Certified Professional Bookkeeper (CPB) from the Association of Certified Professional Bookkeepers – Get recognized for passing industry-recognized tests in bookkeeping
3. Professional membership:
• American Institute of Professional Bookkeepers – Join the world’s premier bookkeeping association to gain access to resources, continuing education, and networking opportunities
• National Association of Certified Professional Bookkeepers – Connect with other bookkeeping professionals and access continuing education and networking opportunities
These resources can help you gain the knowledge and skills you need to become a successful bookkeeper or to start a bookkeeper side hustle.
Tip 4: Manage Your Time Effectively
Time management is one of the most important factors when starting your own bookkeeping side hustle. The success of any hustle depends on how well you manage your time and resources. To ensure you succeed with your side hustle in bookkeeping, you want to make sure you are organized and efficient with your time.
First, decide how much time you can realistically devote to your side hustle. Start by making a schedule that fits into your current lifestyle, this way you can guarantee you will get your daily tasks accomplished.
Next, prioritize your tasks based on urgency and importance. Bang out those more difficult and higher priority tasks first and move down the list.
Finally, make sure to build in breaks during your day so you don’t burn out. Breaks can help you stay focused and creative with your work.
With good time management, you’ll have the discipline and structure to make a successful side hustle.
Difference between Full-Time & Part-Time Bookkeeping
Full-Time Bookkeeping:
Full-time bookkeeping involves a more comprehensive and time-consuming process. It consists of data entry to record all financial transactions, reconciling accounts, creating financial reports, creating budgets, and more. It usually requires a team of individuals that specialize in certain areas, such as QuickBooks specialists, payroll and accounts receivable managers. It is typically done on-site during typical work hours, 5 days a week.
Part-Time Bookkeeping:
Part-time bookkeeping is more flexible than its full-time counterpart. It usually involves managing a subset of the full-time duties, such as data entry and financial reporting. It can be done remotely and typically involves less stress, commitment and responsibilities. Depending on the particular business, part-time bookkeeping can be done on evenings, weekends or early mornings.
How to Start a Bookkeeping Side Hustle:
Starting a bookkeeping side hustle can be a great way to supplement your income. Here are the steps to get started:
1. Determine Your Financial Goals. Set a goal for how much you’d like to make.
2. Choose Your Niche. Decide if you want to specialize in a certain niche like nonprofit, small business, or freelance bookkeeping.
3. Get Certified. Take the necessary steps to get your professional certification.
4. Develop Your Business Plan. Put together a business plan outlining your services.
Estimating Time & Scheduling
Estimating time and scheduling is an essential part of any side hustle and must be taken seriously in order to ensure success. As with any venture, planning and scheduling can make the difference between success and failure.
When starting a bookkeeping side hustle one of the first actions should be to create a schedule of activities to know when to do what needs to be done. This could include setting aside time to create processes and templates, writing down processes and planning what needs to be done.
Additionally, when taking on bookkeeping tasks, it is important to estimate the time needed for each task. Estimating the time to completion should factor in the number of hours required, the level of difficulty of the task, resources available, etc. By accurately estimating the time and resources needed to complete the task, you can be confident of the results and therefore it will be easier to stick to a schedule.
Finally, when picking up new tasks make sure to keep organized and keep a separate task list to ensure that nothing falls through the cracks. No side hustle is successful without proper planning and scheduling.
Tip 5: Determine Your Rates
When determining your rates, it’s important to research the current market rate for bookkeeping services. One way to do this is by looking at online job postings for bookkeepers and noting the hourly rate that is being offered. You can also reach out to other bookkeepers in your area and inquire about their rates. Additionally, you should consider how much you value your time and labor when establishing your rates as a bookkeeper. Once you have a better idea of what the market rate and what you are willing to accept, you can use this information to construct pricing packages that make sense for your clients and allow you to make an adequate profit.
It’s also important to note that pricing strategies may vary depending on the size and scope of the project. Depending on the complexity of the project, you may want to consider charging a flat rate or a combination of an hourly rate and a flat rate. Finally, you should also factor in additional services or extras that you might offer, such as consulting or ongoing bookkeeping services, and be sure to include these add-ons in your pricing strategies.
Factors to Consider
1. Market Research: Understand the customer base you’re hoping to serve by researching the local business market. Find out what types of bookkeeping services are in demand, and what services your potential clients will be looking for. Determine if local business owners and entrepreneurs need help with one-time projects, like setting up a new accounting system or creating financial statements for year-end, or if they need an ongoing bookkeeper to manage their records and provide other services.
2. Set Goals: Work with your prospective clients to determine their needs and develop goals for each client’s project. Set realistic expectations so that clients know what to expect in terms of timeframe, cost, and level of detail you’ll provide within the scope of their project.
3. Set Prices: Take into consideration the tasks you’ll be taking on and the time it will take to complete them. Once you have a rough estimate of the number of hours you anticipate the job will take, determine your hourly rate or the estimated cost of the project. Make sure your pricing is competitive and reflects the quality of services you’ll provide.
4. Promote Your Services: Figure out the best way to market your bookkeeping services. Networking is a great way to get the word out about your side hustle. Attend events and online discussions geared towards local businesses and entrepreneurs, and leverage social media to promote your business.
Popular Billing Methods
When starting a bookkeeping side hustle, it is important to familiarize yourself with popular billing methods. By understanding the different ways you can invoice clients for your services, you can develop the best model for your growing business.
The most common billing methods are hourly rate, flat fee, package pricing, and value pricing. Each method has its pros and cons.
An hourly rate means charging a client for each hour you spend working on their project. But, setting an appropriate hourly rate and staying on top of time tracking can be difficult.
A flat fee means charging a single fee for the total duration of the project. This method is straightforward and simple, but can lead to undercharging or overcharging.
Package pricing involves billing clients for a predetermined package of services. This requires you to anticipate the amount of work a client may need, which can be difficult to assess accurately.
Finally, value pricing involves setting a fee based on the value of your services to the client. This can be challenging, as determining the perceived value of your services is not always straightforward.
Once you have a better understanding of the different billing methods, you can decide which one will benefit you and your client the most.
Tip 6: Market Yourself
Market Yourself:
1. Create a professional website or an online portfolio showcasing your skills: Use a platform such as WordPress, Wix, Squarespace or similar to design and build a website which showcases the skills you have as a bookkeeper. It is important you showcase the range of services you can offer, list the software and systems you have a working knowledge of and any specialities or niche services you offer.
2. Leverage social media channels to spread the word: Use platforms such as Twitter, LinkedIn and Instagram to promote your bookkeeping side hustle. Make sure you have a professional profile, link to your website and share regular updates on the work you are doing. Connect with influencers and potential partners in the industry and use #bookkeeping and #startup hashtags.
3. Network and get involved with local business groups: Attend business networking events and connect with other entrepreneurs and business owners in the area. Make sure you are looking to build relationships and keep in touch. Consider joining a professional organisation such as the Institute of Certified Bookkeepers.
4. Reach out to potential clients and offer your services: Use existing connections, your contacts on social media and professional networks to reach out to potential customers to offer your services. Give them an idea of what you can do as a bookkeeper and how your services can help them.
5. Build up a portfolio of clients and projects.
Ways to Promote Your Services
1. Create a Professional Website: Setting up a website or blog is a great way to showcase yourself, your skills, and your services. It will also give your potential clients an easy way to contact you if they’re interested in working together. Make sure you list all the bookkeeping services that you offer and include pricing if possible.
2. Utilize Social Media Channels: Social media is essential for promoting small businesses. When it comes to bookkeeping services, use the platforms to showcase your services, engage with potential clients, and build relationships. Share success stories, post success tips, and answer questions that will show off your knowledge and expertise in bookkeeping.
3. Expand Your Network: Utilize online tools such as LinkedIn, Facebook, and other social networks to post your services along with links to your website. Reach out to small business owners, entrepreneurs, and professionals that may be in need of bookkeeping services through messages, groups, and special message boards.
4. Send Out Proposals: Compile a list of contacts that may be interested in bookkeeping services and send out tailored proposals that demonstrate your experience, qualifications, and rate of services.
5. Join Communities & Exchange Resources: Take advantage of local events, workshops, and meetups to connect with potential clients. By joining and participating in online communities, you also have the opportunity to exchange resources and ideas to help boost your business.
Building a Network of Clients
Building a network of clients is an essential step to getting your bookkeeping side hustle off the ground. There are a few ways you can do this.
1. Advertise your services. You can do this by placing ads in local newspapers, online classifieds, or through social media. Make sure to include information on your qualifications and experience in bookkeeping, as well as what services you offer.
2. Attend networking events. Many professional organizations and local business groups have events that are a perfect place to meet potential clients. Look for events that are directly related to accounting and bookkeeping.
3. Use referrals. Ask existing clients, colleagues, and contacts if they know of anyone who might be in need of a bookkeeper.
4. Ask for reviews. Ask clients to leave positive reviews for your services on sites like Yelp and Google, which can help draw new customers to you.
5. Join local business associations. Many local business associations and chambers of commerce post openings for bookkeepers and can be used to find potential clients.
6. Consider other services like bookkeeping software. Offering potential clients a complete package that includes bookkeeping software or other services could be attractive and beneficial to them.
Building a network of clients involves developing relationships with businesses in your area so that you can provide them with the best services. Networking, promotions, and referrals are key to acquiring new clients for your bookkeeping side hustle.
Tip 7: Stay Organized
Organization is key when starting a bookkeeping side hustle. You’ll need to keep track of all your clients, their financial information, services and payment terms. Create systems to streamline the process of invoicing and track expenses, sales, and other financial activities. Also keep accurate records of all the client information you receive, such as contact information, time tracking, invoices, and other documents. Organization will save you time and help you stay on top of your bookkeeping business.
Basic Record Keeping Techniques
1. Create a List of Business Services – The first step in starting a bookkeeping side hustle is to create a list of the services that you would ideally provide. Consider the types of clients and the type of work you can handle. As a side hustle you may decide to focus on small businesses or individuals, but having a offer that is tailored to your preferred type of client will help you attract them to your business. Knowing which services you will offer will also help you create the necessary paperwork needed to get your business up and running.
2. Keep Track of Expenses – It is important to keep track of all of the associated business expenses such as supplies, software, advertising, and more. Document these and save all of the receipts as they will be important for understanding your costs and for properly recording them in your books.
3. Purchase Accounting Software – While it is possible to keep physical books and document your transactions manually, many startup bookkeepers choose to purchase accounting software. This allows you to generate detailed financial reports, store records for taxation purposes and to collaborate with clients virtually.
4. Set Professional Financial Policies – The next step is creating financial procedures and policies. This includes the types of payments you will accept, how often clients should make payments, late payment penalties, and so on. These should be explained in detail with clients before they sign up for services.
5. Collect Client Data – Collecting data about each client is a critical
Tips for Maintaining Organization
1. Create a system of folders and subfolders: in order to organize all of the documents related to your bookkeeping side hustle, create a system of folders and subfolders and label each accordingly. This system should also include an electronic version, backed up to an external drive or cloud system.
2. Set up a calendar: use a calendar to schedule your clients’ due dates and keep track of your projects. Having a visual calendar makes it easier to stay organized.
3. Create a task list: create a task list to keep track of your daily, weekly, and monthly activities. This will help you stay on track and be aware of upcoming deadlines.
4. Record your expenses: create a ledger for tracking your expenses and income. This will help you stay organized when filing your taxes and save you time.
5. Utilize software solutions: using software solutions to create and store documents and ledger entries will simplify the process of keeping records and making sure documents are secure.
6. Stay up to date on bookkeeping standards: stay up to date with the latest standards for bookkeeping and tax law. Becoming an expert in your field will help you stay organized and maximize the efficiency of your time.
Following these tips will help you stay organized when you start your own bookkeeping side hustle and make sure that your work meets the highest standards.
Conclusion
Starting a bookkeeping side hustle can be a great opportunity to add an additional revenue stream to your finances. To get started, you’ll need to assess the current state of your financials and business needs, understand the laws and regulations applicable to your business, and decide on what services you’ll offer. You’ll also need to develop an effective plan for marketing your services, accounting for the cost of necessary software and hardware setup, understanding different payment models such as hourly, fixed or value-based pricing, and positioning yourself competitively. With the right combination of experience, knowledge, and research, you can create a successful bookkeeping side hustle that provides ongoing financial security and opportunity.
Summary of Tips
Starting a bookkeeping side hustle can be a great way to make some extra cash while doing something you enjoy. Here are some tips to get started:
1. Research the Market: Know what services you’ll offer and which clients you’ll target.
2. Get Educated: Get trained and certified in bookkeeping and/or accounting so you can provide your services with confidence.
3. Create a Business Plan: Establish your goals, pricing structures, marketing strategies, systems and processes.
4. Build a Network: Connect with other bookkeepers or accountants who can help you build your business.
5. Advertise: Get your name out there to potential customers via advertising or online platforms.
6. Get the Necessary Software: Invest in good software for bookkeeping, such as QuickBooks or Xero, that will help you manage the day-to-day operations.
7. Keep Your Finances in Check: Setting up a separate business bank account will help you to track your business’s income and expenses.
8. Follow Up: Go the extra mile when it comes to customer service. Follow up with clients to ensure their satisfaction with your services.
Outline of Bookkeeping Benefits
Bookkeeping is an essential skill for running a successful business. It can help you to manage your finances, track your spending, and make sound financial decisions. By having a thorough understanding of the financial aspects of your business, you can make informed decisions that protect your business from financial hardship.
Starting a bookkeeping side hustle can be a great way to generate additional income. You can use your knowledge of bookkeeping to provide services, such as financial record-keeping, bookkeeping services, accounting, and tax preparation. This can be especially beneficial if you are already an accountant or bookkeeper, but are looking for an additional income stream.
When starting a bookkeeping side hustle, there are a few key benefits that you can enjoy. First, you can offer more flexible services that suit your schedule. You are in control of when you work, and you can create a system that works best for you. With the right software, you can manage clients from anywhere, provide value, and get paid faster.
Second, it can be cost-effective. By having a side hustle, instead of trying to open your own bookkeeping business, you can avoid costly overhead expenses. This frees up additional capital to invest in your business.
Third, you can expand your service offerings and experiment with different types of bookkeeping services. This will help you to build your business’s reputation and expand your client base.