How to become a freelance bookkeeper

If you’re considering a self-employed career and enjoy working with numbers, you might want to know how to become a freelance bookkeeper. With the growth in people working for themselves and smaller companies increasingly outsourcing their financial needs, there’s a good opportunity to build a successful freelancing career.

With accounting software, video meetings and instant messaging, virtual bookkeepers are on the rise, making it easier to work remotely. So, it’s a great option if you want to start freelancing from home and prefer to avoid meeting clients in person.

What does a freelance bookkeeper actually do?

Businesses of any size will go through a number of financial transactions every month. These include sales, purchases, invoices, payroll, bills, expenses and more. And the larger the company, the more this will increase in volume.

A freelance bookkeeper will be brought in to record and process all of the financial transactions. This starts with data entry and filing invoices, making payments, chasing invoices, and preparing the business books ready for accountants at the end of each financial year. A bookkeeper also needs to reconcile records with banks, suppliers and customers, which means checking if everyone has the same figures, or investigating why any difference might have appeared.

The need for bookkeeping dates back to Babylonian records from 2,600 BC, but modern technology has made single-entry and double-entry bookkeeping much easier by automating many of the more routine parts of the job. Many freelancers will choose to learn and specialise in one system, such as Quickbooks or Xero.

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What skills or qualifications do you need?

There is no formal education or qualifications required to start offering your services as a freelance bookkeeper. But when you’re dealing with the finances of other businesses, demonstrating some relevant training will help reassure clients that you know what you’re doing.

Some of the most recognised organisations for training and qualifications for bookkeepers are the International Association of Bookkeepers (IAB), the Institute of Certified Bookkeepers (ICB), and the Association of Accounting Technicians (AAT). It’s also possible to go through the qualification process as part of an accounting apprenticeship.

Obviously, a talent for working with numbers, keeping meticulous records, and having an eye for detail will be important, as you’ll need to spot any discrepancies or errors. You’ll also need to decide which software platforms you’ll offer to clients, and make sure you’re familiar with how to use them effectively.

Various courses are available for all of the most popular bookkeeping software, often available from the companies themselves, as well as third party providers.

  • What does a freelance bookkeeper actually do?
  • What skills or qualifications do you need?
  • What’s the difference between freelance bookkeepers and accountants?
  • How much can freelance bookkeepers earn?
  • Do freelance bookkeepers have legal or insurance requirements?
  • How to find clients as a freelance bookkeeper
  • More resources and support for freelance coaches

What’s the difference between freelance bookkeepers and accounts?

There are no qualifications needed to become a freelance bookkeeper, and you’ll be responsible for recording and collating all the financial records of the business, before potentially preparing the accounts up to trial balance stage, where they are fully reconciled with all other parties.

But accountants need to be qualified via the Association of Accounting Technicians, or the Association of Chartered Certified Accountants, and may have also completed a degree in accounting.

These means they’re able to prepare the accounts for tax purposes, but also deal with HMRC if their clients are subject to an investigation. An accountant is expected to know and understand all of the legal requirements related to client finances, be able to audit statements and evaluate financial records, as well as recommending ways for a client to save money.

It’s important for any freelance bookkeeper to ensure they know where their responsibilities end, and when clients should be referred to an accountant.

How much can freelance bookkeepers earn?

All freelancing incomes will vary across individual businesses, and down to each client agreement or contract. So, it’s hard to say exactly what you can earn as a freelance bookkeeper in the UK. But a typical hourly rate would be between £10-£25 depending on experience.

The average hourly pay for a bookkeeper in the UK is calculated at £11.89 by Payscale, with annual salaries between £18,000 and £36,000. An average of £23,239 is reported by Indeed, £27,000 by Totaljobs,  and £24,372 by Glassdoor.

As a freelancer, you’ll need to cover the costs of your software and equipment, business expenses, and the absence of paid holidays or sick days. So, it’s important to take all of this into consideration when you’re setting hourly, daily or project rates for clients. And you’d expect a freelance bookkeeper to have a good idea of their living costs, and the income they need for a viable business.

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Do freelance bookkeepers have legal or insurance requirements?

Most bookkeepers will be likely to fall under the UK Money Laundering Regulations as an accountancy service. This means you’ll need to register with HMRC or an appropriate professional body such as the AAT, ICB or IAB.

As you’ll be processing personal information, you’ll also need to pay a Data Protection Fee to the Information Commissioner’s Office every 12 months. The cost for most freelancers will be £40 or £60.

And given the nature of dealing with financial matters and the risk if you make a mistake, investing in Professional Indemnity Insurance is recommended. This will meet the cost of actions by a third party if they’ve suffered a financial loss as a result of something done by you or your company. You can save on insurance cover with exclusive discounts from specialist providers for IPSE members.

So, you’ll have some protection against the losses if data is damaged or goes missing, there’s a breach of confidentiality, or any negligence occurs. Accountancy firms are required to have PI cover as a part of their professional status.

How to find clients as a freelance bookkeeper

If you’re just starting out as a freelance bookkeeper and need to find clients, the best routes could be making friends with accountants and other freelancers.

While qualified accountants are often able to do bookkeeping, generally they prefer to outsource this to other people, letting them focus on more specialist tasks. And as a freelance bookkeeper, you’ll be passing on the financial records to accountants at the end of each year. So, building a good relationship means you’ll have people you trust when clients need further advice, and a source of regular bookkeeping tasks.

Another useful source of clients are your fellow freelancers. Many people choose self-employment because they want to focus on work that they’re passionate about, and not necessarily because they want to spend time balancing the accounts. Offering help and advice in freelance communities such as Creative Freelancers UK will quickly lead to potential clients enquiring about your services.

Networking events are a great way to meet other local businesses in your area or industry sector, and you can also look at local advertising, or putting something in trade publications. And once you have your first clients, you’ll probably find referrals are a valuable source of new business.

Normal online marketing techniques for any freelancer will also work; including setting up a website, optimising your LinkedIn profile, and listing yourself on freelancing websites. But for bookkeepers, it’s also well worth getting yourself included in the directories provided by software providers, such as Xero’s Advisor Directory or Quickbooks similar service.

More resources and support for freelance bookkeepers:

Researching other freelance careers? Why not check out our other guides:

And you can get support and help if you’re starting out with self-employment, or still in the early stages of building your career, with the IPSE Incubator. The 12-month programme is currently free with IPSE membership, and includes advice, events, webinars, networking and more, tailored to anyone just beginning their freelance business.