Can a CPA start a successful bookkeeping business?

Bookkeeping

Can a CPA have a successful bookkeeping business? Well, I’m here to tell you that yes, a CPA can! As a matter of fact, I am a certified public accountant here in the United States, and I have a successful cloud accounting business in which I work with clients throughout the United States and Canada doing accounting, bookkeeping, and consulting for them. What you have to keep in mind though is that you have to look at your skill set. If you come from a tax background, then you really need to get familiar with not just accounting and bookkeeping, but what I would call operational accounting.

Operational accounting is the day to day accounting and bookkeeping, including: How do you enter a vendor bill? How do you pay a vendor bill? How do you enter a customer payment? How does the accounting software work? That’s all very important to know, not just knowing how to handle day to day transactions in accounting software. Say, for example, with QuickBooks Online (which is what I specialize in), how does QuickBooks Online work? A lot of the mess ups that we see in QuickBooks Online come from the fact that business owners, who are trying to do their own bookkeeping, don’t know how to use the software.

You also might come from a background of doing journal entries, but in QuickBooks Online or QuickBooks, journal entries are really the last type of entry that you should make. You would need to know how to adjust the books at a transaction level. For example, if an invoice was entered incorrectly, then we might need to edit the invoice. We might need to do a credit memo. We might need to adjust the transactions rather than entering a journal entry. Most of the time, a journal entry will mess something up in QuickBooks since that’s not the way that QuickBooks is meant to work. I would say that is the most important thing to know about QuickBooks.

You’ll also need to understand that in QuickBooks, transactions can be edited, they can be changed, and they can be deleted. While that’s really the beauty of QuickBooks, that we are not having to make all these journal entries, it is also kind of the curse of QuickBooks, because transactions can easily be changed and deleted. So, it’s probably best to close the books so that you can keep the client from making any changes that they shouldn’t be making.

If you come from an audit background and are looking to start a bookkeeping business, I can relate. I actually have an audit background, and I have found that experience to be so valuable from the standpoint of knowing the balance sheet inside and out. As you auditors know, when the balance sheet is clean, pretty much the profit and loss falls out of that. Understanding the value of cleaning up a balance sheet, and cleaning up the profit and loss will definitely help you, because usually we’re dealing with clients books that are messed up. The average bookkeeper and accountant doesn’t really have the understanding that you do, in terms of your audit background, knowing that accounts need to be reconciled and cleaned up. That will definitely help you in having a bookkeeping business, being able to clean up books properly and reconcile them properly and understanding that the balance sheet needs to be cleaned up.

One of the things that was difficult for me in transitioning from CPA to then accounting firm owner was taking the rigidness out of being a CPA and putting that aside. As CPA’s, at least the sort of background that I come from, everything is about the billable hour. You have to be efficient and you have to do things a certain way -it is very rigid. What I found, especially in working with employees, is that they needed more freedom. They needed freedom to collaborate, to exchange ideas, to be more efficient working together, rather than forcing people to just work by themselves, which is how I was taught. It’s been very interesting for me to then allow my staff to work differently from how I perceived that they should work, allow them the freedom to show me that they can do something better, even though it’s different from what I learned.

I think also, as CPAs (and especially if we worked in public practice), we have been programmed to be these crazy, overworked robots. What I would encourage you to do in building your accounting and bookkeeping business is to seek to build something different. That was my goal when I started my company, to really reinvent the accounting firm, to not assume that I have to work 12 hours a day, and that I have to work every weekend (essentially that I’m this accounting martyr). I sought to create something different in which I work no more than 40 hours a week, sometimes even 32 hours a week or so. We don’t work weekends. We don’t work overtime. It’s amazing when you work in an environment where people are happy to come to work, and then they contribute, they grow, and they stay at your company. Again, if you come from public accounting, you know that employees come and go. That’s because they’re overworked and underpaid. I would encourage you then to seek to build a business in which you want to work in, and in which employees would want to work in, because you’ll be much happier, and you will serve your client much better.

If you come from a corporate background and you are a CPA, you also have some very good skills that you can apply into starting an accounting business. I have also worked in that environment, and one of the things that you will see that is very familiar to you is probably the monthly closing process, because you’re essentially now doing a closing for all of your clients. One thing about corporate accounting that I found was that it was repetitive and predictable, and there is some aspects of that in working and running an accounting and bookkeeping business. Except now, you’re doing it times 10, times 50, times 100 clients. Each client can be different, so I would encourage you to think about whether you can deal with all of the moving pieces for all of those clients, and to really work on some good workflow management and practice management, then to be able to manage the volume that you will see in working with a lot of clients.

I hope that this helps you if you are a CPA and looking to start and run a successful bookkeeping and accounting business. As I said before, I am a CPA and I made that transition, so I know that you can too. Just keep in mind that there are just some changes that you’re going to have to make in order to make it work.

(Visited 206 times, 1 visits today)

Products You May Like

Articles You May Like

Ray Dalio: Career, Economic Risks and Advice To Graduates (2019)
Billionaires Have A Lot To Fear From Bernie Sanders’ Tax Plan [Infographic]
Wolves In Sheep’s Clothing: We Can’t Trust Businesses To Do Right By Americans Now
Testimony: Massachusetts Options for Corporate Tax Reform
Three big mistakes to avoid during Medicare open enrollment

Leave a Reply

Your email address will not be published. Required fields are marked *