Starting a bookkeeping business can be a great way to make money while helping other businesses keep track of their finances. However, in order to do so legally, you’ll need to obtain a business license and you’ll also want to consider training for a bookkeeper certification. In this article, we’ll discuss what you need to get started and how much it will cost. We’ll also talk about the benefits of having a certification and how to best use your skillset as a bookkeeper.
What Licensing and Certification Do You Need to Start a Bookkeeping Business?
The first step in starting any business is to obtain the proper licenses. Depending on your state and the type of bookkeeping services you plan to offer, you may need one or more of the following:
- A general business license
- Training as a Certified Public Bookkeeper (CPB)
- Employer identification number (EIN) for tax purposes
How Can You Get Started with the Licensing Process?
The best way to find out what business license you need for your bookkeeping business is to check online for your state’s requirements. Various states have differing processes, so be sure to check your state for accurate information. In most cases, you can apply for a general business license online or in person at your local courthouse or clerk’s office.
Is a Bookkeeper Required to be Licensed or Certified?
While you are not required by any state entity to have a bookkeeper’s license, it is certainly to your advantage to take advantage of training programs that offer certification. This will assure your clients that you have fully studied and been trained on every level required for bookkeeping excellence. There are a few well-recognized associations that offer certification:
- National Association of Certified Public Bookkeepers
- American Institute of Professional Bookkeepers
Each of these associations offers a nationally-recognized certification process. Again, it will be to your advantage to train to become certified so you can add the identifier, “CPB” after your name.
Other benefits to having the proper license and certification include:
- It shows potential clients that you’re a legitimate business. This can help you attract more customers and build trust with those who hire you.
- It protects you from liability if something goes wrong during the course of your work.
- It ensures that you’re complying with all local laws and regulations.
How Much Will It Cost to Get Your Bookkeeper Business Up and Running?
The cost of starting a bookkeeping business will vary depending on the licenses and certification you need or want to obtain. In most cases, you can expect to pay around $200 for a business license and $600-$700 for the Certified Public Bookkeeper training course. An EIN, which is an employer identification number, is issued by the IRS and is free of charge. You will not need an EIN unless you plan on having or have employees.
You’ll need to set up your office, whether from home or in a workplace, and that will require the purchase of equipment such as a computer, professional adding machine, office supplies, software you’ll use for client maintenance, and other professional supplies. The costs of the equipment and supplies will vary greatly, depending on what you have on hand and which items you’ll need to purchase to get started.
What Are the Protections of Being Properly Licensed & Certified?
If you operate your bookkeeping business with the proper license and have been certified, you have the security of knowing you have established your business correctly. You are also protected from some of the legal ramifications of a dispute between your business and a client. And, most significantly, your prospective clients will note that you’ve demonstrated high moral values by setting up your practice legally, which will translate into the trust they will place in you.
Bookkeeping is a great venture if you are an entrepreneur who wants to start your own business. In order to do so legally, you’ll need to obtain the proper license and you’ll want to become certified via a nationally-recognized bookkeeping association. The process of getting started can be daunting, but hopefully, this information has contributed to your understanding and continued interest in what can be a very successful business for many years to come.