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It is important to establish what your charge out rates are before you actively market to prospective clients. If you are in a meeting with a prospective client you need to know exactly what you will charge per hour or will you bill a fixed amount per month or quarter.

You can do some research to ascertain what other bookkeeping services are charging for their services by making a few phone calls. This will help you determine what is going on in the market, but it may not reflect what you wish to charge as your fees. Your charge out rate will be specific to your requirements, how much you want to work, how much money you wish to earn. Now that you have other considerations like public indemnity insurance and professional memberships, the original rate you thought about may not cover these additional expenses.

You can easily work out your charge out rate by taking the income you want to earn each month (or whatever period you choose) after business expenses and divide that by the number of hours you want to work in that same period. Remember to be realistic, 40 hours per week every week of the year may not be sustainable and 10 hours a week may not meet your income expectations. Once you have done this exercise, this will give you a charge out rate. Now compare that to what others in the industry are charging, are they similar, are they more expensive or is it less than others charge?

If your rate has come out exceptionally different to others, why is it? Are you marketing yourself way above the average? Are you short selling yourself by estimating a rate way under what others charge? You dot have to charge what other people charge as I am sure there will be a huge difference. Some people charge $25 per hour; some charge $80 per hour. Thats a big difference in rate, but the key here is, what value you can create for your clients. What do you do differently to deserve the additional rate?

If you have a good idea of how you will create value for your clients and why your rate is a certain dollar value, it will be easier to discuss this at the meeting stage with a potential client. If you have included your rate in initial phone calls or on your web site, it is easier to discuss your rates as you have pre-qualified the potential client and you know your rate must be in their budget vicinity as they have requested a meeting.

Remember you are running a business and have certain services on offer for a fee. You have to cover your costs and make it worth your while to offer the service. There will always be people, who want the cheapest service, but there are other who are prepared to pay top dollar for quality and there will be clients in between.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info for more information and for a free bookkeeping e-course

Occasionally you may find people wanting to sell their bookkeeping practices. This can be one way of starting your own bookkeeping business without a lot of marketing for client generation.

This way of starting a business may be something to consider however it is not necessarily something you should enter into lightly. Unless it is a large bookkeeping firm which has goodwill in the business which is not necessarily attached to the main principal, the smaller ones may not be a good deal.

It is important to analyze the circumstances of each potential business for sale and do your due diligence before taking the plunge. This option is often costly, but is nevertheless an option for a bookkeeper who wants their own business. If you are in the position to be able to buy a bookkeeping business make sure you carefully review the purchase contract and check that all components of the business are transferred to you.

Components of the purchase contract are, but not limited to:

Premises information

Any restriction covenants

Goodwill

Licenses

Supplies

Employees

Work In Progress

Debtors

Charges and Mortgages

It is also important to arrange an extensive hand over period of clients to maximize client retention. It is easy to buy fees and then find the clients all quickly disappear when the new owner walks in the door. It is vial for you to protect your income stream and having a lengthy hand over period will ensure your new clients have had contact with you frequently during the hand over stage. This will assist building a rapport with the new clients and they will be more likely to continue on in your new bookkeeping business.

Another way of starting a bookkeeping business is to consider a franchise instead of an established business. This would mean you are not taking on the clients of another person, but you are buying the goodwill already established by someone elses brand in the form of a franchise.

If you do consider a bookkeeping franchise, you will need to research exactly what you will receive for your franchise fee. Additionally it is important to understand all on going fees that will be applicable. These can become incredibly costly and are in addition to the purchase fee. It is crucial to understand how much the fees are and what they are for such as marketing or advertising.

If you want to start a bookkeeping business and are thinking about either buying an established business or buying into a franchise they key to turning it into a successful business will be thorough research prior to making any decision.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info for more information and for a free bookkeeping e-course

When you commence your own bookkeeping business, one of the key insurances people often forget to organise is Professional Indemnity Insurance.

You can get some policies for as little as $500 per year paid annually, whilst earning fees up to $100,000. This cover indemnifies you so that if someone sues you, you have insurance for the claims. Many bookkeepers do not bother with this, however it really is critical to ensure you are acting in a professional manner and ensuring you have cover if you get into any hot water.

Having this type of insurance is another positive point for your business. If you want to be treated as a professional organization, you need the correct business coverage and professional indemnity is essential.

If you have a registered Tax Agent supervise your work from a BAS point of view to get around the legislation, they will be responsible for any BAS related issues. They will not however be responsible for your other work and therefore you will still require professional indemnity insurance for your other dealings with clients or you could be exposed to legal action if something goes wrong. It doesnt matter which business structure you have chosen or if you work at the clients premises or at home, professional indemnity is essential.

For example, you are providing bookkeeping services to a small business and are responsible for their accounting data file. As part of your role, you do backups of the system. The clients computer crashes and the hard drive can not be recovered. If you have not got a back up off site, on a memory stick or in another format, the client has lost all of the data. Who do you think they will blame if they do not have any data? If you then need to re-key in data and use 50hours of your time doing so, is the client going to be happy if you front up with an invoice for 50 hours of your time?

You can see with this example it is very easy for things to go wrong and even the best clients can get upset. This also demonstrates the need for specific systems with your clients, which we will cover in detail later in this book.

The National Institute of Accountants, to which I am a member, has a specific public practice certificate for bookkeepers and can also provide a competitive Professional Indemnity policy through bulk purchasing power of their members. Additionally, they also provide a public practice certificate which you can frame and have on display for clients if you have an office, or home office set up. Once again this assists in making you look professional and impress your clients.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info for more information and for a free bookkeeping e-course

The amount of days money is due to you remaining in accounts receivable (AR) provides a solid indication of how long it’s taking you to collect money owed to your practice. The Medical Group Management Association’s family practice accounts receivable benchmark breaks down like this:

0-30 days: 68%

31-60 days: 14%

61-90 days: 7%

91-120 days: 3%

121 + days: 8%

The more money collected sooner, the better. However, what do you do if that is not occurring? If you’re reluctant to pursue the funds yourself and choose not to have staff do it, you may want to contact a medical collection firm.

What are some things to look for?

* Find out if the company belongs to industry associations like the Commercial Law League of America or the Commercial Agency Collection Association. This suggests they understand the ethics of collection laws like the Fair Debt Collections Act.

* Inquire about the commissions. The range can be anywhere from 15% to 50% of the total amounts collected. It depends on the account type and the level of collecting difficulty.

* Make sure the firm understands the sensitivity of collecting medical bills. A balance must be maintained between collecting what you’re legitimately owed and your medical practice. The collection process needs to be gentle, firm and persistent and always moving forward.

* Learn the collection process. The usual collection agency timeframe occurs at the 90 day mark. If a bill has not been remitted nor the patient heard from in 90 days, the collection firm’s work begins. It begins with a staff collector making:

- Immediate letters to the debtor
- Daily calls within a two to three week period

If no resolution appears to be forthcoming, then an attorney may take over. The attorney will pursue the case the same way. However, the letters will now be on the attorney’s letterhead and the calls will be from an attorney.

If nothing happens, then you’ll make a litigation decision. If you go forward, you’ll pay the $600 to $800 court costs and a lawsuit will be filed. If not, then the amount will be written off.

Either way, it’s resolved.

* Make sure you have realistic expectations. Find out the collection recovery percentage the firm achieves. Some studies suggest that a medical collection company will collect between 15% and 25% of the money they pursue. The average appears to be about 20% (The firm will collect $5000 from every $25,000 turned over).

* Consider bundling your billing and collections. If you find a reliable firm who can do all of your billing and collections, it may be financially worthwhile to review the costs and benefits of that situation instead of outsourcing the just past due accounts.

Ronald McLaughlin
RMK HOLDINGS INC.
625 N. Michigan Ave.
Chicago, IL 60611

Read revenue management information at our website which is http://www.revenuemgmt.com

Everyone knows that they have to pay taxes ,but some people do not even know what a tax is. Collected by the state and the federal government, taxes are required charges that are collected against every working adult. In some form or another, taxes have always been charged against people, even in family, taxes were collected in the form of gold, produce, or even labor. They are a way that we give back to the community we live in.

In the past, taxes have been used to do things like finance wars but today mostly our tax money goes towards things like maintaining the public education system, the upkeep of our laws, build new infrastructure, maintain and build new roads, our defense, and so much more.

In 1913 the Federal Income Tax was instituted by President Woodrow Wilson. Between 1% and 7% of a persons income is deducted for this tax, depending on various factors. And since then, more taxes have been added in order to keep our government running. After World War I, the American Tax Code has become four times larger.

In America, we have a system that lets the government know how much you have earned, and if you have paid the correct amount of taxes. The tax returns run by the Internal Revenue Service (IRS), and it is something that everyone who makes over a certain amount each year has to go through.

Basically, what happens is you fill out a single form that everyone has to complete, and then supplementary forms. There is also a instruction booklet that can make the process easier, provided by the IRS. You give them information regarding your expenses, and income, for that year, and they calculate the taxes you have to pay.

Even if you are self employed, you are expected to file a tax return. If you are receiving any sort of taxable income, you must file only very few people over the age of 18 are exempt from filing.

Many people get penalized every year for failing to file their taxes, or for filing incorrectly. Even if you do not receive a tax return from the IRS, you should file your taxes to ensure that everything is in order.

Your tax returns need to be send by April 15 after the end of the tax year.

Tax returns are not something that can be forgotten about, or put off . Taxes certainly are not something you can get out of paying!

I am an owner of KJ Accounting and Consulting Group, would be happy to help enterpeneurs to take care of accounting/bookkeeping needs.
http://www.mysimpleaccounting.com

The top tip if you are thinking about how to start a book keeping business is that you need a business plan. This might not sound like a news flash, but many people start their own business by accident and they stumble along getting clients slowly or doing the books for their family business.

Although this is a great starting point, but if you want to take your bookkeeping business to the next level and want to create a sustainable long term business, you will need a business plan.

Many people run for cover when your start talking about creating a business plan, but it really is a wonderful tool to make your business grow to the next level. A business plan gives you all the information you need at your finger tips. Your business plan then becomes a reference tool and can help guide you in the choices you make in you business life.

There are many things which you can include in a business plan and it doesnt need to be a 10 page novel. Short statements about what you want to achieve and how you will achieve it is fine. Waffle will not make your business plan any clearer and the age old expression, keep it simple stupid rings true.

What is your business?

Is it targeted to specific industry?

Is there a market for the bookkeeping business?

What does your feasibility study say about the need for bookkeepers?

How big is the market for bookkeepers?

Is the market expanding or contracting?

What share of the market do you want to obtain?

How are you going to capture it?

How are you going to price your bookkeeping service?

What will you do which is unique, what is your competitive advantage?

Who are your competitors?

What are your strengths?

What are your weaknesses?

How will you overcome your weaknesses?

How will you caplitalise on your strengths?

What is the cost of start up?

How will you fund the start up?

What is your projected profit?

What does your projected cash flow look like?

What are your ongoing costs?

What are your variable costs?

Do you need staff?

Will you have office premises, virtual office, home or a combination?

These are only examples and you may choose to not use all of them or add some of your own. I have also included as a bonus to this book a separate business plan written specifically for bookkeeping. You can use it as a template and modify it for your purposes and add your own ideas and requirements to it. It is a good starting point and you never know when your business plan may be needed for something.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info for more information and for a free bookkeeping e-course

If you are considering staring a book keeping business, there are some important tips which will help you along the way. Even if you have many years bookkeeping experience starting a business required new skills and attitudes which you need to be aware of.

Firstly, do you have the right attitude to be in business for yourself? This is sometimes difficult to do as often people do not understand their limitations or really know their own personality.

Can you get up and be out of your pajamas by 9am and be at your desk even if you dont have a client to see that day? When you are first starting out, your diary will not be full every day of the working week. You will still be disciplined to be at your desk working on your business when you have some spare time up your sleeve. This is difficult to do if you do not have the right personality and find it difficult to motivate yourself.

If motivation is not your strong suit, you can create a visualization or goals board for you to have in your office area. This board is to include all of the results you want to achieve by working in your own business. Make sure they are specific and clearly illustrate your personal goals.

Secondly you need to ensure you have the correct professional indemnity insurance as a book keeper. This will protect you in the event there is an issue with a client and a claim for professional negligence. This is an area that many bookkeepers omit when starting up due to the cost, but it can save your business or your other assets in the event of a claim.

The final tip is just as important as the others but it is also often forgotten about especially in times of stress. Tip three is enjoying yourself! It is very easy to forget this when you are stressed about getting clients, or having too many clients, or having problems with clients or trying to juggle your own time management. During these times it is easy to forget about enjoying the process and learning curve of starting, running and growing your own business.

You need to enjoy your career choice and being your own boss comes with lots of challenges. With a lot of hard work, determination and the right attitude you can create a business of your own which will provide you with a good income and a rewarding career for years to come.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info for more information and for a free bookkeeping e-course

If you have been thinking about how to start a bookkeeping business, you may have thought about your structure, your qualifications and experience and may have thought about what services you can provide. You might then decide it is all too hard to set it up from scratch yourself and doubt your abilities. If you not sure about being being able to start your own business, you may be thinking about buying a bookkeeping franchise.

Franchises can be a good introduction into business if you are not confident about the whole package which is required to be a business owner/operator. They can be however quite costly to but into and a bookkeeping business is often the type of business that people start on a shoestring budget from home and build up gradually If this applies to you, paying upwards of $20,000 can be a big dent in your finances, especially if there are large ongoing fees and may not be suitable for everyone.

If you are looking at buying a bookkeeping franchise to start your own business, do your due diligence, another words, do your homework, look at everything.

What is included in the franchise fee?
What payments are required on an ongoing basis and how much are they?
What do you get for your money?
What support do you get?
What training do they provide?
Do you have a specific area or territory you can market in?
Do they give you clients?
What is the projected return on investment?
How long is the franchise agreement for?
Does the agreement give you enough time to recover your costs, make a profit and experience capital growth?
Are there any legal issues with other franchisees which are not yet evident?

These are certainly not all the important point, but it just gives you an idea of what to look for in a franchise opportunity and how to assess the merits of the different franchise models available. You need to know exactly what you are getting for your money and if it is of value to you. Can you do what the franchise is giving you? Can you keep your money and eventually have what the franchise is offering you from day one?

Overall a franchise might be suitable for you and your personality, but like all business decisions, evaluate your options, do your research, get professional advice from your accountant and lawyer and then select the option that is right for you personally. Have confidence in your own abilities too as when you are in business you need to believe in yourself and keep going when things get tough, irrespective if you have a franchise behind you or not.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, How to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info

Are you a bean counter? Do you just love numbers and love crunching them all day? Do you like helping business owners know how their business is performing and enjoy looking at the books all day? If this sounds like you and you are looking to become your own boss, you might like to think about starting a bookkeeping business.

Creating your own business is not something to enter into lightly and a love of bookkeeping is not enough to be a successful business owner. Having your own business takes time, effort, dedication and a lot of perseverance. It is a challenge and building a business from the ground up is not as easy as people think. Statistics show that many small businesses fail in the first 12 months and you dont want to become a statistic.

If you are realistic and commence with a thorough business plan though it will increase your chances of success. The age old expression of businesses not planning to fail, but failed to plan rings true.

It is important to understand that taking a love for bookkeeping and making it into a viable business which requires additional business skills to be successful. You will need to know how to start your business, how to select your name and what licenses you might need. You will also need to plan how to get clients and what services you will offer. You will then need to think about ways of marketing your services and through what channels. You will need to do a complete costing of your services so you know how much to charge. Additionally you will need to check the market and see if your rates are in the ball park of other bookkeepers to be competitive. You will also need to plan for growth and eventual succession.

Fortunately bean counters are extremely lucky these days. There are many small business opportunities where business owners cant do the bookkeeping themselves, or dont have the inclination to, but they do not have the work for staff, which is where self employed bookkeepers have become more and more needed to service a growing industry.

Additionally, bookkeeping as a profession is not as regulated as other industries and it is easy to get experience and basic qualifications so you can then go out and start your own business. Although it takes a big jump of faith in your abilities, if you have a love for bookkeeping and a desire to start your own business, perhaps being a business owning bean counter might be the way to go.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info

Being a bean counter is a wonderful profession which has increased in popularity in the last decade. Bookkeepers, our bean counters we are more affectionately called, are instrumental in small business owners understanding their businesses on a more frequent basis than once a year when they visit their accountants.

Bookkeeping is not a regulated industry, but it is gaining momentum. There are no minimum set prerequisites that need to be achieved to set your self up as a bookkeeper, so experience at this stage is sufficient. The issue with this is that many people find they can not get employment, without experience and people wont give them the chance to get experience. Fortunately with the increase in the profession, more courses are available which specialize in bookkeeping and also offer work placement opportunities.

Mentor programs are also a good way of getting vital information and skills to become a bookkeeper. It is important in anyones career to have good support and finding a mentor can give you an advantage. If it is suitable, someone at your first place of employment or your supervisor might be a good choice. A good mentor can assist you with your career choices, appropriate work experience, professional development and even with course material if you are continuing your bookkeeping studies whilst employed.

There are a number of courses on offer starting at certificate level to get the foundation knowledge required to be successful in bookkeeping. These courses often involve bookkeeping with an accounting package as well as learning about double entry bookkeeping and keeping manual records.

It is beneficial to undertake a bookkeeping course which is a recognized qualification; this is because of the foundation and training you will receive in fundamentals of bookkeeping and accounting principles. If you just attend a software course, you can learn how to use a software package, but it will not give you the foundation of knowledge required to actually understand why you do certain functions or what the ramifications are.

Most basic bookkeeping software packages have functions like spend money or receive money, but it does not explain why the accounts in your chart of accounts is effected. It only teaches you how to perform a transaction, not what the transaction does behind the scenes.

Ultimately if you want to become a successful bookkeeper who can undertake a full range of services for any employer, you will need to understand the fundamentals of bookkeeping and the best choice to have a long lasting career in the industry is to undertake study to increase your career prospects.

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info