When a Bookkeeper is hired, he is expected to keep the necessary details and prepare the business operational statements required by the Australian Tax office. They also provide BAS services like computer based accounting systems which calculate GST and produce tax invoices for clients consulting on issues surrounding BAS or ATO.
Some steps to becoming a bookkeeper and starting a book keeping business in Australia would include first of all registering as a BAS Agent. BAS services have become one of the most constantly requested services book keepers provide.
When you register, it means you can now legally provide services like this for a profit. Of course this is not a strict requirement, but it will help your credibility. You must also complete a certificate IV Book keeping Course before you can meet the requirements to register as a BAS agent.
Getting an Australian Business Number is a must if you want to operate a business in Australia. This will make it easier for businesses to pay you for the services you provide. You would also have to get insurance to run this type of business, this saves you from any losses you may encounter from negligence or errors that may come from your work. There are insurances that can handle the cost of defending you legally if there is a case made against you and it goes to court.
Then you have to buy the necessary equipment and software you would use to do your bookkeeping business. The equipment here is a desktop computer or a laptop computer, standard smart accounting software, and then setting up a work space. You may choose to get an office space if you want to be more professional as working from home may present challenges especially if you do not stay alone.
19 Steps on How to Start a Bookkeeping Business in Australia
1. Understand the Industry
Advancing technology like cloud-based and data analytics services has really improved the way book keeping is done these days, also affecting the value added by the services book keepers provide. The industry has also enjoyed consistent growth in the past five years, this is based on the confidence businesses are beginning to give the profession. Auditing accounts have remained the major dependable supply of revenue for this industry in the past five years; this is because these services are required by the law for any business to stay legally functional.
Another factor that has affected growth in this industry is the current favourable economic activity and an increase in the demand for industry standard book keeping services. The industry has embraced new technologies with the aim of enhancing service integration and establishing cross-selling services.
One challenge that faces the book keeping industry at the moment is the way smart software is currently doing most of the manual work; these include the actual book keeping and standard end of month balances. As the tools used to do the work evolve, so should the expectation and skill-set of the bookkeeper. Book keepers would have to innovate to meet more demanding requests from their clients.
In as much as technology appears to both help and threaten the industry, with applications and smart software that seem to appear to do the work of the bookkeeper, business owners still need the bookkeeper to interpret the information provided by the software, this gives the book keeper the opportunity to leverage on the skills he possess.
Providing insight and analysis in situations like these is the major expectation for book keepers. The bookkeeper can also play the role of a business adviser for small businesses by helping them achieve their goals through financial and non-financial data analysis.
In order to stay relevant to business owners, book keepers must learn to diversify in the services they provide. It is no longer enough to think that you are adding value by providing the basic bookkeeping services because as business owners become more innovative with accounting programs, the book keeper who just focuses on the basic work may become obsolete.
The book keeper can begin to specialize in certain aspects like Virtual CFO’s for Start-ups and small businesses, Inventory and Warehousing, Point of Sales Systems, Cloud Integration of different applications, Payroll. These various areas of innovative services added to the basic book keeping work will definitely keep book keepers relevant in the coming years.
Book keepers would also need to be very conversant with tax laws; they would have to keep themselves up to date with the present tax requirements and the ones that are evolving across industries.
Because of the investigative nature of book keepers, the future is certainly bright for them. We all know that numbers never lie, but they do not also tell the whole story behind transactions, it takes the eyes of a well-trained book keeper to investigate and develop innovative systems for businesses thus making bookkeepers to take on a much appreciated role of consultant.
The future of bookkeeping in Australia is bending towards management services, consulting services, financial planning, tax consulting, wealth management and so on. All of these areas have recently been incorporated into the role of the bookkeeper, so it’s a very encouraging thing.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
Financial matters can be very tricky especially when you begin to look at tax matters, you will definitely find those who need their books in order. Businesses need their books in order to be able to document their progress as they go along. It is a smart thing to know whether the business is simply generating revenue, making profits or suffering a loss.
Proper documentation of financial activity can mean the difference between financial ruin and success. Knowing exactly what the money is doing will help business owners as well as individuals project what their financial future would be like.
Now that bookkeepers are able to offer brief financial advice, they can also give suggestions on how the money can be handled to provide a more favourable financial future for their clients. Knowing ones financial habits informs one on how to develop themselves and work around financial practices that may be hurting their ability to be effective in both business and their personal lives.
Your general demographic for this type of business are small and medium scale businesses, large scale businesses, individuals with multiple streams of income, or even average individuals who want to put their finances in order. As a contract book keeper or in-house book keeper, your job will prove to be very advantageous for your clients as having a proper financial record is one of the things that qualify businesses to operate in Australia.
There are businesses that need this type of service because of the ever changing nature of tax laws, developing credit rating, reduced debt and so on. The truth is, depending on whatever niche you may want to provide for yourself, every business that deals with money daily will need the services of an apt book keeper.
3. Decide What Niche to Concentrate On
Narrowing down too much into one area of your book keeping capabilities may produce negative effects for your business, as you may not get as many clients to get you up and moving. Most clients would need a wide variety of services and you should be obliged to serve in those capacities, especially as one just starting out.
You could focus on providing bookkeeping services for certain specific industry players like medical professionals, accounting firms, Insurance companies, real estate companies or simply establishing yourself as wealth management company for individuals who have vast personal resources.
The Level of Competition in the Industry
Competition is high when it comes to book keeping firms in Australia. Since a great majority of businesses that need these services are small and medium sized, their operations usually revolves around the local, regional and national scale. This means that a lot of book keeping businesses would easily have access to clients available in the market.
Since there are a lot of book keeping firms in Australia competing to have their own share of the market, it would be safe to say that the simplest way to stay above the competition is to provide an unbeatable variety of services and also to do aggressive marketing.
4. Know the Major Competitors in the Industry
Well-known brands in the industry could be the go to names when people think about someone to keep their books. When it comes to brand awareness, these companies have done well in making their presence known all around the nation.
They are no doubt one of your competitions in this industry so paying attention to them should be one of your priorities. Listed here are some of the known bookkeeping businesses in Australia;
- The Institute of Certified Book Keepers
- Australian Book Keeping Company Pty Ltd
- Jim’s Book Keeping Australia
- Pacific Accounting Solutions
- Accountants Australia
- OAS Australia
- First Class Accounts
Starting a book keeping firm can be very light on your pocket, depending on how you want to approach the venture. It is possible to start your book keeping business from your home, all you would need is to register for the necessary documents and licenses, get proper training and take advantage of the digital world to market yourself and start serving clients.
However if you want to operate a much more professional business, then you may look into getting an office space. The most important thing is that you know what you are doing as a book keeper and that your services are up to standard.
The general economic climate for this kind of business presents that the demand for various services related to liquidations, restructuring and bankruptcies will continue to remain high factors that will certainly affect the business. Payroll services is to be identified for creating most of the work for book keeping professionals, this is only seconded by tax preparation and auditing services.
5. Decide Whether to Buy a Franchise or Start from Scratch
In Australia, there are quite a number of book keeping companies willing to franchise their business. This gives you the opportunity to leverage on a well-known brand which will make marketing a lot more smooth for you. There would be no need to further create marketing strategies as your franchisor has already done most of the ground work for you.
Also if this is your first attempt and you lack sufficient experience, you would have access to veterans in the field that have been doing this business longer than you. Their advice would be very helpful especially in difficult times when strong decisions have to be made. First Class Accounting is one of the firms willing to franchise their book keeping business and they operate in Australia.
On the other hand, starting your business from scratch will give you an opportunity to build your network as well as your personal character and skill set. You will become better at your trade as you learn to navigate through the various challenges and hiccups one usually experience when starting a business from the scratch.
Whatever your choice may be, be sure to know that the success of whichever approach you choose will depend on your own personal drive and perseverance.
6. Know the Possible Threats and Challenges You Will Face
One major threat you would face as a book keeping business is the advancement of technology and smart software that appear to do your job for you. It may seem that as technology continues to evolve, solutions become more user friendly. When a small business owner begins to feel like whatever it is he was going to pay you for, he could do by himself with the smart software, then it appears that the contract bookkeeper’s days are numbered.
Apart from simply keeping records, the book keeper can offer professional advice or even consult on some matters affecting the client. These ideas may not be readily available to the business owner since they have not received any kind of formal training on the matter.
Another threat is that accounting firms also offer book keeping as part of their services. These accounting firms may offer to do so much more than your book keeping business may not be able to do at this time. But the way around this particular threat is the fact that accounting services in its entirety is more expensive than simple book keeping services, and looking at your target market, they are mostly small businesses or individuals who need their records to just be straight.
So do a great job at keeping the books, as well as offering some of the services accounting firms offer that are well within the scope of the book keeping trade, and this threat would not be a torment to you. Other challenges may include; developing a business plan for your book keeping business, choosing a way to enter into the practice, learning the various policies that are generic with the field you choose to do business with.
7. Choose the Most Suitable Legal Entity
There are various legal entities you can use for this type of business depending on how far you see your company going. Like we said, one can run a book keeping business simply by getting a laptop with all the necessary software, set up a work station at home, reach out to clients and start work.
If this is the route you want to take, then registering as a sole proprietor may be okay, however the liability issues may not be pleasant should you come out on the wrong side of the liability claim. The best legal entity to register this type of business as is a partnership, when you choose to come together with other book keepers or those who can offer different services to the entire firm.
Some of the advantages of registering your company as a partnership revolves around liability protection, flexibility and tax perks.
8. Choose a Catchy Business Name from the ideas Below
The business name can generate interest or repel potential clients. Seeing as this is a business centered on finance, one would want to be creative but not sound too playful with the names they choose. The name you choose should reflect what you do, it should portray the right kind of seriousness you plan to bring to the table when handling your client’s books.
It should be easy to pronounce, easy to spell and should go well with a .com, .biz or .au at the back of it. You should also make sure that the name is not already used by another business to avoid problems with copyright laws. Even when designing the actual letters, the fonts used have power in portraying the message of your business to clients. Below are a few suggestions you can try;
- Living Book keeping Firm
- Optimum Books
- Advance Allen Book Keeping
- Bedrock Finance Book Keeping
9. Discuss With an Agent to Know the Best Insurance Policies for You
Insurance policies are vital for this type of business, book keepers deal with a lot of sensitive information revolving around money. If any problems arise from omissions or other circumstances, the bookkeeper has to be protected from the negative effects of claims.
The insurance policies gotten for a business that deals with finances may be slightly different from that of regular businesses, although quite a number of these insurance policies are necessary for all business types. Some of the insurance policies required for running a book keeping business in Australia are as follows;
- General Insurance
- Professional indemnity Insurance
- Business Owner’s Policy
- Valuable Papers & Records Insurance Coverage
- Computers & Media Insurance Coverage
- Liability Insurance
- Workers Compensation
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
In this type of business you need to protect your intellectual property because you would be handling very sensitive documents, and the methods you develop in effectively keeping the records of your clients have to be protected.
You would also be accessing the intellectual property of a lot of businesses and since part of your job is also providing advice for your clients, you would need to also advise them on protecting their intellectual properties.
11. Get the Necessary Professional Certification
While in other countries you may not require certification to practice book keeping, but in Australia, you will need a Certificate IV in book keeping, it is required by law. Proper training would be good for you and your business; because many businesses will feel comfortable knowing that the person handling their records knows what he is doing. Since you would be dealing with very important aspects of business or individual finance, a proper understanding of the work is important.
12. Get the Necessary Legal Documents You Need to Operate
Some of the legal documents required to run your book keeping business are as follows;
- Certificate of Incorporation
- Australian Business Number (ABN)
- Business Plan
- Insurance Policy
- Employment Agreement
- Consulting contract documents
13. Raise the Needed Startup Capital
This part of any business plan is usually one of the most important. Finances play a great role in business and you need to know how to generate such for your business. Usually the main channel people think about when thinking of how to raise money for their business is to get a bank loan.
While this is still a very good approach, you must know that certain banks are more likely to pay more attention to well established businesses than those who are just starting up. Other channels of raising money for your business are still available a few of which are stated below;
- You can look for private investors or business partners who would be willing to be involved with your book keeping business
- If you possess some valuable properties, you could sell them to raise money
- You could convince family and friends to give you the initial capital you need.
- With anticipation of how big your firm would be, you could sell shares to interested buyers.
- You could receive grants from business angels or organizations willing to give grants to budding business people
- You can also apply for a loan from banks
- You can raise money from your own personal savings
14. Choose a Suitable Location for your Business
Most people who want to start this type of business may prefer to start it from home. Since this business usually only needs a laptop, access to the internet, smart software, power, papers and such, it may be a good idea to start from home and then move to a proper office when you start making some profits.
But if you are going for the professional work look, then looking for a place with high concentration of your target market would be one of the best; a place that is known as the business district of the town, where the purchasing power of the general demographic is encouraging.
You would also want to look into whether there are other book keeping or accounting firms situated there as well, so as to know what the competition rate would look like. Below are some of the factors to look into when choosing a location for your Book Keeping Business.;
- One way to effectively pick a good location for your Book Keeping business is to look for an area where the general demography suits your kind of business.
- You must check if there are other book keeping businesses in the area
- A location where the demand for your type of business would be high
- A place where the purchasing power with business activity is high
- It should be accessible to prospects and the road network should be easily understood
- Security, traffic and parking is also a factor to take into consideration when picking a location for your book keeping business
15. Hire Employees for your Technical and Manpower Needs
In as much as you will be working by yourself or with a group of other book keepers, the nature of your business model would determine exactly how you are staffed. There are no great equipment needed to run a business like this. You would only need chairs, tables and other pieces of furniture for your office. You would need computers, internet, phones and so on.
You would need a filing cabinet or even a library to keep some paper documents should there be need to have them. Concerning manpower, you may not need many people except of course other assisting book keepers, a front desk officer and such.
The Service Delivery Process of a Book Keeping Business
There are various methods through which book keeping businesses deliver service to their clients. Sometimes one may choose to stick to international best practices, a set of procedures that have been proven to work over the years by book keepers around the world.
Other book keepers may choose to adopt the techniques of other book keepers, or even rely on software and technology to produce effectiveness in their record keeping endeavors. Whatever method you choose to apply, make sure you are being efficient at your job and serving your clients well.
16. Write a Marketing Plan Packed With ideas & Strategies
People will only invest in your business if they know they will get good returns of investment. You would have to prove yourself again and again before pulling in the right kind of investors to give you the much needed liquid cash or working capital.
Aside from your qualifications and experience, a convincing personal and company profile will go a long way in getting you investors. Clearly stating what you have accomplished in the past as it relates to the financial service industry will help increase your chances in the field when looking for clients and investors.
Please have it in mind that when looking for funds from banks and other financial institutions you will be called upon to defend your proposal, a heightened presentation skill will be most advantageous in such scenarios. Below are some platforms you can use to market your business.
- Your business can be advertised on Magazines, Radio Stations and Television Programs
- You could send letters that introduce what you do to business organizations, households and any other establishment needing your services
- Local directories are also a great place to get your business known to the people of your general target area
- Yellow pages
- Participate in networking workshops, seminars and event.
- Get Marketers to go out and market your business.
- Use digital marketing
17. Develop Iron-clad Competitive Strategies to Help You Win
You would need to device proper tactics to win over your competitors in this business. It is a highly competitive industry and to get clients you must be aggressive. Innovation in marketing and advertisement will go a long way in getting you clients. When strategizing to gain more clients, you must focus on marketing strategies that actually produce results rather than just throwing resources at every marketing platform that shows up.
Focus on generating leads, conversation and new service acceptance than likes and followers when using social media to market. Leads and conversations are real signs that the said social media marketing is actually effective. If you do very well in properly marketing your business beyond the appeal of your competitor, you will be able to win in this highly competitive industry.
18. Brainstorm Possible Ways to Retain Clients & Customers
Client satisfaction is the singular most effective way to retain customers for this kind of business. You must figure out a way to quantify the satisfaction of your client, one way to effectively do this is to put out a poll and find out what sits well with your clients and what doesn’t, when you do find out the exact things that satisfy your clients, then begin to leverage on those things in order to drive revenue.
Whenever you receive any kind of complaint or negative response to the services you render, be sure to quickly fix such problems as bad reviews spread faster than wild fire and could cause you to loose business. Find out the things that are important to your clients, no matter how small and insignificant they may sound, make those things one of your major priorities.
Once the customer is happy with the services you provide, they would come back again to receive such quality service.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
When it comes to boosting your brand, there are various methods that will give you the type of results you desire. No business can be successful without the general public knowing about them. It is one thing for your target market to know about you, but then it is another thing for your influence to go beyond those in your market.
Becoming loud in your publicity approach can spell the difference between business growth and stagnation. Below are the platforms you can leverage on to boost your brand and advertise your business.
- You could have banners and billboards placed at strategic positions across your city
- Official cars that are banded with your logo, gives a sense of professionalism, making people believe more in your brand.
- Advertise your business on your online and social media platforms
- Call Businesses, households and other establishments and tell them what services you offer
- Fliers and handbills could be distributed around locations where you hope to find clients.
- Loyal customers could tell those needing your services about the great work you do
- Spread awareness through your mobile app and your digital marketing platforms
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