[Sharpone]

I have had some recent requests from friends with small businesses to do accounting for them. Although I have my CPA license, I have not had many years of experience. I would really like to branch into doing accounting for small businesses, but am not sure if I am ready yet. I would like to believe that referring to textbooks and Becker material could help me with the areas I may need to research, along with access to the FASB Codification website.

So I believe that my question targets accountants who currently do the books for small businesses. How did you realize when you were ready to start your business? How many years of experience did you have? What type of experiences did you have? What advice would you have for someone like me?

Thank you!

[Recked]

I hate to say it but CPA exam and school is very different from the real world.
I'd recommend a few years in tax before you venture out on your own.
You need to know the ins and outs of it to properly advise clients on real world scenarios.
How many years of tax experience do you have? Have you done any tax returns?

[Sharpone]

Hi, I should have clarified. My friends are searching for someone to do bookkeeping for their small businesses, i.e., journal entries, account reconciliations and financial statements, not taxes. What do you think? Thanks.

[Recked]

To be honest, this is below your pay grade as a CPA.
If you are desperate for work, or for money, then hop on the opportunity.
Most people pay bookkeepers less than $100 a hour, more like 25-50, and your time as a CPA should be worth $300+ an hour.
It would be a good learning experience. Do they use quickbooks, are you familiar with QB?
The opportunity to first prepare the bookkeeping, and then take over the tax returns would be tempting as well.

[Sharpone]

I am actually very eager to find work and would really like to gain the learning experience. $300 an hour?! Wow!

I'm unsure if they use QB. I am familiar with QB, although I have only done AP, bank reconciliations, journal entries and a little AR in QB. I'm not sure if that's enough to consider myself an expert. I would love to learn more and am currently using self-study and Lynda.com to brush up and learn even more QB concepts. The cost of a QB certification is too expensive for me at this point. Plus, most QB online courses are seem to be six weeks and I'd rather do a self-study course so that I can't “get out there” quicker.

Thanks for your advice.

[Missy]

For simple bookkeeping you can charge between 30-50/hr where another bookkeeper might only make $13-$18/hr. It's hardly below your pay grade, a full time job paying $40/hr works out to over 80k/year which is pretty typical for a new CPA, but an 80k salary works out to much less than $40/hr if you're doing more than 40hr/week which most are. Firms can charge $300/hr but that's for auditing or corporate tax typically. No small business is paying that for bookkeeping. To say all cpa's are worth $300/hr is to say we all make over 600k a year.

I highly recommend the QuickBooks proadvisor course if you've got limited QB experience. Yes that's an investment and will take a few weeks. If you're looking to do this quick and cheap may not be for you. Very important to know how to set up a functional chart of accounts specific to the business you're doing the books for. The chart of accounts for my candle and soap client is much different than the chart of accounts for my client with two dozen rental properties.

For someone who works less than 50 hours a week at a regular job it's a pretty good way to bump up your annual income by 20k without having to commit to a full time job with tons more hours.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Missy]

Let me add the advice above only applies if you're doing it as a side gig. You'd never make enough as a full time gig to replace a full time job with bookkeeping.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Sharpone]

Great advice, Missy. Thank you. I am researching QuickBooks proadvisor courses now. I'd rather complete an online course instead of having to physically attend a school. However, if physically attending a course during the evening is cheaper, I might follow that route.

I'd love to help my friends with their bookkeeping, but after my skills are a bit more efficient, I guess.

[Missy]

The upside of going through intuit and using their online course is a bit of free advertising, being able to represent yourself as a certified pro advisor and being able to buy QuickBooks products at a discount (to resell so if your friend is using 2015 but needs to upgrade it's a bit of a markup for you)

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Sharpone]

Hmm, great food for thought about bookkeeping being more of a side gig. I now have to decide if the approximately $1K amount spent in classes and taking the proadvisor class is worth it…

[Anonymous]

@Sharpone-I was never a pro-advisor but did at some point do bookkeeping for small businesses. I used to charge $300/month or $30/hour. Made about 1K a month in addition to my full time job. I agree-great side gig, not a good idea for a full-time job. Mine were very small potatoes, I am sure you could make more than that on the side. I think any investment is a good investment…Don't forget about errors and omissions insurance either.

[Missy]

Originally I only did the proadvisor because (a) needed some quickbooks skills and (b) needed CPE credits to renew my license so I figured it was worth the cost (I don't work in Public so I have to foot the bill for my own CPE and don't have access to seminars like those in public might). I got most of my CPE knocked out that way.

I've since let it lapse, the four clients I do on the side are MORE than enough for me to keep busy and not looking to pick up any more at this time so theres no benefit to me in keeping it.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Sharpone]

@anyatver Thanks for your advice. How many years of experience did you have before you began doing small business' bookkeeping? And what type of experience did you have? How did you get into it as a sidegig

@Missy I didn't realize that you get CPE as well. That's great!

[CPA2BEE]

Taking on your friend's books is a perfect opportunity/project to see how you manage things on your own. Your not filing a tax return and it is something that can always be fixed, so this is a great way for you to test the waters.

As for the $300/hr comment above, I highly advise to disregard that post – its ridiculous. There are SOME services that CPAs can charge that rate for, but bookkeeping is definitely not one of them. Rates vary depending on where you live, but if it were me I'd charge $50-80/hr for bookkeeping (or maybe even a flat monthly fee if it were really simple) and then try to streamline everything I can offer that client directly into my office. What I mean by that is once I have their books I would offer to do their payroll, tax planning/projections, prepare their business and individual tax returns, compilations/reviews if needed, any other quarterly/annual filings. Whatever I can do for them, offer it! Thats how you make $$$$ from your clients – the bookkeeping isn't going to be your money maker but it can lead to your money makers where maybe you can charge that $300/hr rate. This happens all the time.

If you have a couple years under your belt, I think you should feel confident enough to take on a bookkeeping project on your own. Start with that, work your way up to issuing financials and preparing tax returns and before you know it, you'll have yourself a practice going. Good luck and I say go for it!

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[Sharpone]

@CPA2BEE Great advice! Thank you.

[Author]

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