If you’d prefer not to bill hourly, you can set a fixed fee or retainer bill for each client. How Will You Handle Scope Creep for Fixed Payment Clients? As a virtual bookkeeping firm, you’ll need to determine a reasonable rate for your clients, even if they’re located in other areas. There is also no reward for working efficiently since fewer hours means less billing. But there is a downside: you need to track how all your time is spent. It can be a very profitable way to bill your clients. Do You Want to Track Your Time?īilling hourly has been standard practice in the bookkeeping industry for decades. You should consider the following questions when picking a billing method. If you got into virtual bookkeeping for the freedom and flexibility, you might want to work off retainers, but you also have the option to bill hourly. You need to be ready to answer! Start by deciding how you are going to price your services. One of the first questions potential clients will ask is about your prices. If your virtual bookkeeping firm has employees in several states, you may want to work with an insurance agent to find coverage that works for all your employees. ![]() Health insurance is a much sought-after benefit if you plan to hire employees. Many states require residents to have some level of health insurance coverage. Replacing employer-sponsored coverage can be one of the most expensive costs of going into business for yourself. You should also consider health insurance as an added expense, especially if you previously had health insurance through your employer. You should request quotes from several agencies to ensure you get a good deal. Your premiums will vary depending on what type of services you offer and your projected revenue.įor a bookkeeping business just beginning, an insurance policy costs less than your daily cup of coffee. Professional liability insurance will protect you against errors, negligence, and omissions that may occur during your bookkeeping engagements. The amount of coverage you need will depend on your client list. This insurance will cover you against claims you made a mistake in preparing a client’s books. ![]() One of the most critical steps to take in your virtual bookkeeping business is to invest in professional liability insurance, also known as errors and omissions (E&O) insurance. DBAs can usually be filed with your county or parish.īusiness insurance will protect you from claims against your business, but you need the correct types of insurance policies. If you plan on operating under a fictitious business name or several different names, you may need to file a “Doing Business As” (DBA) statement. You should consider the licensing fees when deciding where to locate your virtual bookkeeping business. Fees vary from a few dollars to a percentage of revenue, depending on your business location. You are required to register for a business permit in most locations. An EIN is optional for sole proprietors, but it allows you to receive 1099s at the end of the year from your clients without giving them your SSN. The EIN identifies your business and is separate from your social security number (SSN). ![]() Once you’ve formed your entity, you must apply for an employee identification number (EIN) with the Internal Revenue Service (IRS). Sole proprietorships do not require formation filings, though they often require business licenses. If you’ve established a corporation or LLC, the entity needs to get registered with your state. Permit and licensing requirements vary by state and locality.
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