What Do I Need to Start a Bookkeeping Business? A Guide to Expenses & ProfitsOct 11, 2021
In this episode of Profits + Prosecco Podcast, I am going to be talking about the monthly recurring revenue you get from having a bookkeeping business. It truly goes on with no end in sight and once you book out, you'll continuously have a steady income. To hear what the regular operating expenses are in a bookkeeping business and how to think about your profitability, keep reading!
But before we dive right in, welcome to the Profits + Prosecco Podcast! I’m your host, Katie Ferro, CPA, reformed rule follower, creator of Booked Out Bookkeeper, mom to 3 little ones, and Kajabi enthusiast.
This podcast is for entrepreneurs who desire to change their life through their profitable business, and for bookkeepers and accountants who want to escape the 9-5 and start a simple scalable bookkeeping business like I did.
Bookkeeping increases profits and profits change lives. So pop some bubbles and let me show you how!
In this episode, you'll learn all the expenses it takes to start a bookkeeping business and why each one is so important to your growth. For even more juicy details, listen to ALL of episode 48 of the Profits + Prosecco Podcast on your fave streaming platform.
Expenses in a bookkeeping business.
Almost ALL of my expenses in my bookkeeping business are optional or avoidable. You could basically operate at 100% profitability in a bookkeeping business (depending on how you do it). If you cut out expenses, it’s going to take a lot more time and a lot more administrative tasks so it stops being worth it. While the expenses are optional, they are definitely valuable!
Some costs buy back your time, some ensure you're getting paid, and others boost the image of your business and how your clients perceive you.
The biggest expense I would never recommend avoiding is bank service charges. I invoice my clients through stripe, which automatically bills them that same day of the month until it’s cancelled. What's great about this is that I don't have to remember to invoice my clients and if they change their credit cards, I’ll get a notification from Stripe so they make it very easy to ensure you're getting paid.
Software expenses and why they matter.
I have two software platforms that I pay monthly for…
GSuite: This is six dollars per user per month and it allows me to have all of my team members with an email associated with my domain. For example, all of my bookkeepers have an orderly accounting email address, and this just keeps everything professional. This expense is super important especially for the image of professionalism you're going for when bringing clients in and introducing your team.
ADP: This is where I have my team members track their hours, and this is $2.50 per user. This is the only app I pay through because I’m actually an ADP partner so I don't pay for my own firm's payroll. I highly recommend getting set up as a partner on ADP or Gusto so that you can get your own firm for free.
My annual expenses as a bookkeeper.
When it comes to my annual expenses, I try to pay things annually because it tends to save me money and that's what I'm always looking for. Here is a rundown of my annual expenses:
- Liability insurance
- Business licenses/permits
- Calendly (booking software)
- Hello Sign
- Domain renewal
A lot of these can be free but if you want unlimited options and better results, I recommend checking out the different subscriptions to these platforms.
What Do I Need to Start a Bookkeeping Business? A Guide to Expenses & Profits: The Bottomline
I hope this episode helps you understand all the expenses it takes to start a bookkeeping business and why they're so important for your growth. As I look at my bookkeeping business and the consistency behind it, the expenses are 100% worth it. Yes you're spending more money, but in the end you become more profitable because of the investments you're making.
If you enjoyed the episode, please take a second to rate and review. Each review helps us reach and inspire more entrepreneurs and bookkeepers just like you.
Don’t forget to take a screenshot, share it in your Instagram stories, and tag me at @orderlyaccountingbykatie. Cheers to your inevitable success and I’ll see you in the next episode!
CONNECT WITH KATIE:
The Bookkeepers’ Corner Facebook Group