How do I start a bookkeeping business?

Define your services and niche, choose a business structure (LLC or sole prop), obtain an EIN and required licenses, open business banking, set up your tech stack (QBO or Xero plus e-sign and document tools), price fixed monthly packages, and create basic marketing assets (website, Google Business Profile, and outreach scripts).

Do I need a certification to start a bookkeeping business?

No certification is legally required to start. Credentials like QuickBooks Online, Xero, or CPB/CB help credibility and consistency, but client results and referrals matter most.

What licenses and permits do bookkeepers need?

Typical items include a state/city business license, EIN, registered agent for an LLC, a DBA if using a trade name, and in some areas a home-occupation permit. Pure bookkeeping services usually don’t require sales-tax registration; confirm local rules.

Should I form an LLC or operate as a sole proprietor?

An LLC provides liability protection and added credibility but has state fees and filings. A sole proprietorship is the simplest and cheapest to start. Many solo bookkeepers choose an LLC and consider an S-Corp tax election later if profits justify it.

How much does it cost to start a bookkeeping business?

A lean launch typically ranges from $275–$2,200 one-time (entity setup, licensing, basic website, initial software) and $160–$490 per month for software, insurance, and communications. Costs vary by state and tool choices.

Can I run a bookkeeping business from home?

Yes. Set up a dedicated, secure workspace with dual monitors, reliable internet, device encryption, a password manager, and a client portal. Check for any local home-occupation rules.

What software do I need as a bookkeeper?

Choose a core GL (QuickBooks Online or Xero), a receipt/document tool (Dext, Hubdoc, or AutoEntry), e-signature/proposals (Ignition, PandaDoc, or HoneyBook), file storage, and a password manager. Add payroll, reporting, and portals as needed.

How should I price my bookkeeping services?

Package services into fixed monthly tiers based on complexity, transaction volume, and integrations. Quote cleanup projects separately at a fixed fee. Avoid hourly billing when possible.

How long does it take to land the first client?

With focused outreach and a clear niche, many new firms secure 1–3 monthly clients within 30–60 days. Results depend on network, offer clarity, and consistent prospecting.

Do I need to be a CPA to offer bookkeeping?

No. Bookkeeping is distinct from public accountancy. Do not offer services that require a CPA license (e.g., audits or attestation) unless you are licensed to do so.

Can I work with clients in other states or countries?

Yes. Bookkeeping can be delivered remotely. Understand each client’s sales-tax and payroll rules and use clear engagement letters that define scope and responsibilities.

What insurance does a bookkeeping business need?

Consider professional liability (E&O), general liability, and cyber insurance. Requirements vary by client contracts and state.

What should an engagement letter include?

Define scope of services, deliverables, timelines, client responsibilities, data security and confidentiality terms, fees and billing, and cancellation or change-order procedures.

How do I keep client data secure?

Use MFA on all apps, device encryption, a password manager, secure file sharing, least-privilege access, and written data-handling SOPs. Avoid using public Wi-Fi without a VPN.

How to Start a Bookkeeping Business (2025 Guide)

If you’re detail-oriented, organized, and comfortable with numbers, a bookkeeping business is one of the lowest-overhead service firms you can launch from home. This guide walks you through entity choice (LLC vs. sole prop), licenses and permits, a complete startup checklist, realistic costs, and a home-office setup that wins clients.

Step-by-Step: From Idea to Open for Business

1) Define your offer

Scope: monthly bookkeeping, cleanups, catch-ups, AP/AR, payroll coordination, sales tax, management reports.
Niche: e-commerce, trades (HVAC, roofing, plumbing), real estate investors, medical/dental, nonprofits.
Outcome: fixed monthly packages with clear deliverables and turnaround times.

2) Choose your business structure (LLC vs. Sole Proprietor)

Sole Proprietor

Pros: simplest setup, lowest cost, easy taxes.
Cons: no liability shield; personal assets at risk; credibility can be lower for B2B.

LLC

Pros: liability protection, easier to partner or hire, looks professional to clients/banks.
Cons: state fees and annual filings; slightly more admin.

Most solo bookkeepers start as an LLC for liability and trust. You can elect S-Corp later if/when profits warrant payroll tax optimization (talk to a CPA).

3) Get licenses, permits & compliance in place

Business license (state/city/county).
Registered agent (for LLC).
EIN (free, needed for business bank account and 1099s—even for sole props).
Home-occupation permit (if required by your city).
DBA/fictitious name (if operating under a brand name).
Sales tax license (usually not required for pure services, check your state).
Client agreements: engagement letter, scope of work, confidentiality/NDA, data-processing addendum.
Insurance: professional liability (E&O), general liability, and cyber coverage.

4) Open business finances

Business checking (keep finances separate).
Business credit card (cash-back on software).
Bookkeeping for your firm (yes, your own books!).
Quarterly estimated taxes system (CPA helps you set this up).

5) Build your tech stack

Core GL: QuickBooks Online or Xero.
Docs & receipts: Dext/Hubdoc/AutoEntry; Google Drive/Dropbox.
Proposals & e-sign: Ignition, PandaDoc, or HoneyBook.
Invoicing & payments: native QBO/Xero, Stripe, or ACH solutions.
Password manager: 1Password/Bitwarden.
Communications: dedicated business email, calendar booking link, secure client portal.

6) Price & package your services

Starter: bank/CC reconciliation, basic P&L/BS — for very small accounts.
Standard: + AP/AR oversight, monthly management reports, Slack/email support.
Premium: + KPI dashboards, cash-flow calls, forecast, priority support.
Price by complexity + transaction volume + integrations, not hours. Offer clean-up projects at a separate fixed fee.

7) Set up a home-based office that inspires trust

Private space: door you can close; lockable file cabinet.
Dual monitors (bookkeepers live on spreadsheets).
Ergonomic chair/desk, quality webcam & mic for Zoom.
Backup internet (phone hotspot) + UPS battery for outages.
Security: device encryption, auto-lock, anti-virus, shredder, secure Wi-Fi.

Realistic Costs (One-Time & Monthly)

Item	Notes	Est. Cost (USD)
LLC formation & registered agent	Varies by state (filing + RA)	$100–$500
Business license/permits	City/county fees	$25–$250
Insurance (E&O + cyber) setup	First-month premium/deposit	$50–$150
Computer/monitor upgrade	If needed	$0–$800
Branding/website basics	Domain, simple site, email	$50–$300
Initial software subscriptions	QBO/Xero, proposal, docs	$50–$200
Estimated one-time total	Lean launch	$275–$2,200
Monthly software stack	GL + docs + e-sign	$80–$250/mo
Insurance premiums	E&O + cyber	$40–$120/mo
Phone/internet	Business line optional	$40–$120/mo
Estimated monthly total	After launch	$160–$490/mo

How to Start a Bookkeeping Business (2025 Guide) 3

Bookkeeping Business Checklist (copy this into your SOP)

Planning & Positioning

Pick a niche and define service tiers (Starter/Standard/Premium).
Decide pricing method (fixed monthly; separate cleanup projects).
Draft your unique value prop (what outcomes you deliver).

Legal & Compliance

Form LLC (or confirm sole prop), obtain EIN.
File DBA (if using a trade name).
Register for state/city business license, home-occupation permit.
Set insurance: E&O, general liability, cyber.
Prepare engagement letter, scope of work, privacy/data terms.

Finance & Operations

Open business bank account + card.
Set up your own chart of accounts and bookkeeping file.
Create invoice & collections policy; plan quarterly tax payments.
Build a monthly close SOP and quality-control checklist.

Tech Stack

Choose GL (QBO/Xero) + receipt capture + e-sign + portal.
Implement password manager; enforce device encryption.
Set up cloud file structure and naming conventions.

Marketing & Sales

Buy domain, publish simple service website with case-style copy.
Create Google Business Profile; add services and booking link.
Build LinkedIn profile + 10 outreach messages for your niche.
Draft proposal & discovery call script; add a portfolio sample.
Create a referral one-pager for partners (CPAs, agencies, coaches).

LLC vs. Sole Proprietor: Quick Decision Guide

Choose LLC if you want liability protection, plan to hire or partner, or want extra credibility with B2B clients and banks.
Choose Sole Proprietor if you’re testing demand with one or two clients and want the fastest, cheapest start—then convert to LLC as you grow.
Either way, separate business banking and use a written engagement letter for every client.

Home-Based Setup That Clients Trust

Professional presence: custom domain email, calendar link, branded proposal.
Security standards: VPN on public Wi-Fi, MFA on all apps, least-privilege access.
Meeting etiquette: quiet space, clean background, reliable webcam/mic.
Redundancy: external backup drive + cloud backup; hotspot + UPS.

30-60-90 Day Launch Plan

Days 1–30 (Set Foundations)

Form entity, get EIN, license, insurance.
Pick niche, create 3 packages, finalize tech stack.
Publish basic website, Google Business Profile, and booking link.
Draft engagement letter, proposal template, discovery script.

Days 31–60 (First Clients)

Contact 50 niche prospects (warm intros, LinkedIn, prior network).
Post two authority articles (niche pain points + case-style examples).
Send 10 proposals; close 2–3 monthly clients at “Standard” package.

Days 61–90 (Stabilize & Scale)

Document monthly close SOP; set QA checklist.
Ask for reviews/testimonials; publish 1 case study.
Optimize pricing; add one premium add-on (KPI dashboard or cash-flow call).
Line up 1–2 referral partners (CPAs, web agencies, coaches).

FAQs

Do I need certification to start?
No. Certifications (QBO, Xero, CPB/CB) help with credibility and process consistency, but client results and referrals matter most.

How much does it cost to start?
A lean home-based launch is often $275–$2,200 upfront and $160–$490/month thereafter, depending on your state fees and software choices.

Can I serve clients in other states or countries?
Yes—bookkeeping is largely jurisdiction-agnostic, but know each client’s sales-tax or payroll rules and keep engagement letters crystal clear.

Your next step

Clone the checklist above into your project tool, pick a niche, draft three packages, and set a 90-day outreach target. When you’re ready, I can turn this into a downloadable SOP pack (engagement letter, scope of work, onboarding checklist, monthly close checklist).