The Freelance Bookkeeper’s Credentials
Posted by Gabrielle on 23 Mar 2009 at 08:00 pm | Department: Articles, Case Studies, Everything Else, Q & A, Training, Videos
One of the most common questions I hear about becoming a freelance bookkeeper is, ‘What credentials do I need?’
The real answer to that question has more to do with the type of freelance business you want to build. But for the purposes of this article, we will assume that you are focusing on handling the month-to-month bookkeeping of your clients as their sole bookkeeper.
You’ve Got Choices
I’ve found that most freelance bookkeepers are concerned with the technical skills needed to provide quality service. Of course, that is a good place to start.
So, if you’re starting from zero, the first step is to learn the ropes academically. Here are a few choices to consider:
the basics you need may be available locally in a classroom setting. Check a nearby community college or continuing education programs to see if there are any live classes offered for bookkeeping certificate programs.
If that is not available in your area, or you can’t fit classroom training into your schedule, you may want to consider self-study training courses available online. Penn Foster Career School offers a couple of choices for self-paced training that are good quality. You can either get a Certificate in Accounting or take their Bookkeeping program.
Universal Accounting’s Professional Bookkeeper training is another option.
This training is a self-study program that takes the traditional paper-and-pencil approach. It is a course that centers on small business bookkeeping, designed and taught by a CPA. It also includes a module on practical steps for starting your freelance business.
Are You Certifiable?
If you already have a good understanding of bookkeeping principles, but want the credibility (and confidence) that comes with a few letters you can add after your name…
AIPB’s Certified Bookkeeper training which provides the CB (Certified Bookkeeper) certification is probably your most economical and recognized option for a professional bookkeeping designation. This is a thorough self-study, traditional debits-and-credits approach from the oldest industry association for our profession. I suggest that you pursue this after you already have a good, basic understanding of bookkeeping under your belt. You will also need some on-the-job experience in order to qualify for the certification.
NACPB’s Certified Professional Bookkeeper training provides the CPB (Certified Public Bookkeeper) designation. This is another self-study training option geared toward those who wish to start their own bookkeeping business, created by a CPA.
Of course, the best training, after you have the academics down, is real-world experience. But you can only get that kind of “training” by actually doing client work.
There are a variety of ways to get that hands-on experience, which range from offering to do the books for a friend or two who own businesses, to subcontracting from an established freelance bookkeeper, to working directly for an accounting firm. Working as an accounting temp may also give you the opportunity for varied experience, if you can land gigs with small businesses. (Experience with large corporations will be of little help in running your freelance bookkeeping business.)
Of course, it goes without saying (though I’m saying it here), you will also want to set up your own set of books and keep good records to apply what you’ve been learning AND see how it feels to be a business owner!
Finally, when you’ve got the bookkeeping principles and practices firmly ingrained, there will be one other major learning curve to tackle in the freelance bookkeeping puzzle. You must learn to use QuickBooks. The vast majority of small businesses use this software, and you will need to learn to use it correctly and well. Just knowing accounting principles does not mean you know how to use this “user-friendly” software accurately.
There are many bookkeepers (as well as CPAs!) who think they can just “fake it” with QuickBooks. That is certainly not the case, and those who do, often cause their clients frustrating problems rather than providing quality services.
So in my next article we’ll tackle this topic – Which QuickBooks credentials and training do freelance bookkeepers REALLY need?
In the meantime, if you need to brush up on your bookkeeping know-how, or start pursuing a certification program, for credibility and confidence before starting your business (or to enhance your existing services), then check out the options above and take action this week. Then let us hear about your success!
Remember, in tough economic times, small business need to have clean books more than they do in fat economic times. Opportunities abound in any economy for qualified freelance bookkeepers.
Of course, if you have questions or experiences you want to discuss about bookkeeper credentials, go ahead and click on the Comment link on the right side below my name below! I’d love to hear your thoughts on this (sometimes controversial) topic as well! 
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As a Certified Bookkeeper, I completely agree that certifications are extremely important.
I have had no experience with Universal Accounting. Therefore, I will not comment.
I have had dealings with NACPB that left a very bad taste in my mouth. I do not find them to be very reputable. I also don’t agree with open-book exams. All that proves to me is you have the ability to read and pay money.
AIPB is great. I absolutely LOVE them and have faith in their certification process. Final exams are not open book. They are completed at prometric centers. Furthermore, you must have more experience to gain their certification.
In my own very humble opinion – AIPB is a very highly respected organization and the best bang for your buck.
That’s wonderful to hear good things about AIPB! I looked into them a couple of years ago and have asked around since and haven’t found someone who interacted witht them directly. Still, most advice I get is to be careful with “correspondence” certifications. Probably good advice, but I don’t have the right schedule or the money to go the community college route.
I have been a member of the AIPB for two years now and I do really appreciate their newsletter.
I only have on-the-job training and it has been really great. I’ve learned a lot. But for those jobs where I have to clean up someone else’s mess it’s hard for me to understand the accounting principles they had in mind when I find a journal entry that’s not connected to a source document. I also need more expertise in analyzing financial reports. I’m hoping an academic foundation will help with that.
Thanks for the comments!
I am in agreement with having certificates, education, and job experience. I have learned the most form working free lance at many different types of businesses. I would have never picked everything up in a classroom. However, I do believe in life long education. My weakest point in the bookkeeping world is also analyzing financial reports. In this economy I am getting more and more requests for this. I am now searching for some classes in this particular area.
Kathy,
I’m a CMA and a CFM, and will be starting my own bookkeeping business after tax season is over. Analyzing financial reports is actually a specialty of mine, so I thought about using that as a niche. What is it your clients are asking for in the analysis? Are they looking for you to explain the financials, or do they want some type of trending or ratio analysis?
Just curious. Like I said, I am trying to find a niche beyond the bookkeeping, so any ideas are helpful.
Great article Gabrielle! I purchased Universal Accounting a few years back and I’m embarrassed and ashamed to say I’m still not finished with it! Overall it’s a good course to learn accounting, however I had a pretty good understanding of accounting when I purchased it. I thought it was more geared to telling me how to start a bookkeeping business. There is a very small section on it but don’t feel it is enough information.
I also was a member with AIPB and am looking to join again. I also have a few of their course books and am looking at some point to get certified through them.
Does anyone know of someone, something that will give you a guide to starting a freelance bookkeeping business?
Hi everyone! Great comments. I always appreciate hearing about your experiences, questions and challenges. The synergy is great!
Kathy,
Yes, in this economy and based on a recent survey done by Intuit (the makers of QuickBooks software), we will be called on by small business owners more and more for guidance in understanding their financial reports. That’s great news! But it also means we have to be sure we are understanding them well too.
Chris,
Yes, specializing in the area of financial analysis will be helpful to small business owners, since they are now more concerned in using their financial information to tighten up their business. Just remember to stay in simple, practical terms they can understand and use. They want to take action based on what they can learn from their financial information (and they are SO hungry to have someone there to advise them). This traditionally has been more the role of CPAs, but the smaller businesses will look to us for that advice as well because we are right there in the trenches with them in their business. It is a very valuable service we can provide (and build into our rates).
Kimberly,
Yes, Universal Accounting’s course primarily teachees the bookkeeping mechanics, but one module surrounds the basics of going freelance. It’s a good foundation, but I agree more is needed.
That’s why I recently co-authored a book on the subject (available at Amazon) called, “How to Start a Successful Home-Based Freelance Bookkeeping and Tax Preparation Business” You will find helpful information there as well.
In the coming months I also will be putting together additional helpful information on the specific different aspects of running a freelance business. Most available information (including the one mentioned above) tend to provide “wide and shallow” info. I’d like to provide more detailed and deep resources. So do let me know about what kind of information you need most, and keep your eyes peeled for these new resources. You guys will be the first to hear about them!
I have to say I have thoroughly enjoyed everyone comments. They have been very helpful. I have not pursued furthering my education as of yet, but now I have a good idea where to start. I myself had started a freelance bookkeeping business and was noticing I had a lack of knowledge in some prime areas. I started looking for alternative ways to broaden my knowledge due to being short on funds (single mom). The library only took me so far so I found a bookkeeping job with a CPA firm. It has been a GREAT alternative. Not only have they helped me in the areas I was lacking but also, I have had the opportunity to work with some very high end clientele as well as non-profit. They have offered to pay for schooling but I still would like to pursue freelance full time in the near future. So I have declined the offer. I was wondering how being a quickbook pro-adviser could help bring in clientele? Any thoughts or wisdom? Thanks!
[...] 30 Apr 2009 at 11:03 pm | Department: Articles, Everything Else, Training In my previous article, The Freelance Bookkeeper’s Credentials, we discussed the training and certifications most often recommended for bookkeepers who gear their [...]
I got my bookkeeping certification through Universal Accounting. I’m also as someone eles mention, in that I had already had enough high school, college, and work experience to where I already knew the basics anyway. And my real reason was to see if I could learn something about how to really go about starting your own bookkeeping business. Althought the course got me motivated in starting my businss, I fizzeled out when the clients were became far and few in between. I did not have anywhere to go to learn more about how to get and keep clients. So if you already know bookkeeping, I would not spend the extra money on taking that course. But for someone who needs to learn bookkeeping from scrach it is very user friendly and helpful.
Someone once gave me a bit of advice about bookkeeping in businesses. Sadly they said that most businesses (especially the small businesses) only needed to know if they had money in their bank account. And while I listened to her advice. I became more clear to me that I needed to give businesses good reasons why bookkeepers were needed in their businesses. So that is also when I started looking at being able to explain what the numbers mean in the financial statement, cash flow, and business ratios to help managers and business owners make decisions about their businesses. So someone asked the question where to get such information on learning these type of things. If someone does know any good books or study programs let me know. So far I have thought about AIPB study course. I also went way backed to my old accounting college book and they did have a chapters on ratios and understanding financial statements.
Terri,
Working for a CPA is fantastic experience – smart move! If you like working with non-profits, that is certainly a niche that has a BIG need for competent bookkeepers.
Regarding becoming a QuickBooks ProAdvisor, you’ll want to check out the April article Consulting and The Freelance Bookkeeper.
http://thefreelancebookkeeper.com/blog/quickbooks-and-the-freelance-bookkeeper/
In it, I give you some more food for thought about becoming a consultant. But specifically, you asked how becomging a ProAdvisor helps bring in clients.
The short and most immediate answer is that once you are certified, Intuit adds you to their ProAdvisor database, where potential clients can (and do) find you based on your geographical location (among other criteria). Intuit also heavy promotes this database. So you will get calls as a result. But certification also allows you to use the ProAdvisor logo on your marketing materials, as well as gives you credibility (and something to talk about) when talking about what you do with prospects.
Those are just some of the ways the ProAdvisor program helps you grow your business. I highly recommend it.
Hope that helps.
Sheila,
You bring up a GREAT point! Many, many small businesses do not pay attention to their financial reports except when it comes time to pay taxes. But then it’s too late to use them to manage their business.
So yes, part of our value to our clients is to show them how their financial reports help them make their business more profitable.
That being said, I suggest that you don’t get too technical about the numbers with your clients (such as with ratios) unless the client readily understands them. That is what a lot of CPAs do, and it is like they are speaking another language. If you, on the otherhand, can show you client in simple, easy-to-understand language what their numbers mean each month in practical terms, they won’t be able to live without you – especially in challenging economic times.
Look for books on understanding financial reports for non-accountants to learn how to do this.
I have decided that I would like to get my bookkeeping certification and start my own freelance business, however in researching the best methods for getting this certification I have ended up very confused. I am interested in taking the course from Universal Accounting but worry that it will be a disappointment and it is a lot of money to purchase the program. I have been a full charge bookkeeper for 14 years for a construction company, now I am looking to expand my skills to benefit other areas. Does anyone have any advice about the Universal Accounting program and if it’s worth it or should I just stick to the selft study for AIPB? Or do I go through Gatlin Education Services and the local community college? I want a program that will leave me confident that I can handle the books for any type of small business. I am very confused as to the best approach and would appreciate any feedback.
Wendy,
If you have over 14 years of full-charge bookkeeping experience, you don’t need the Universal Accounting course. That course teaches basic bookkeeping from zero. The marketing / business establishment module is helpful, but you should not buy the whole course just for that one module.
For certification so that you have confidence and can fill in any general knowledge gaps, my best suggestion is the AIPB Certified Bookkeeper designation. Additionally, you will, if you don’t already, need to be well versed in QuickBooks. So I highly recommend that you get certified as a ProAdvisor too.
As far as being able to handle bookkeeping for all types of businesses, my best advice is to specialize instead in the businesses you are already familiar with, such as construction. Each business type has it’s own unique situations and you will be far more valuable and be able to charge higher rates as a specialist than you can as a generalist.
That’s not to say that you shouldn’t take on clients in industries that you are not familiar with, but you will need to educate yourself to do right by them. It is far easier (and more profitable) to build up your reputation and confidence by using the experience and expertise that you already have.
Focus on your strengths!
There is alot more to this story but this is the jist of it. I recently approached a bookkeeper after being refered to them through a Quickbooks Advisor hyperlink. I have owned a small construction company for two years and have done no bookkeeping and have not payed my taxes. I thought it would probably be in my best interest to hire a professional since I have no bookkeeping or accounting experience. I sat down with the owner of the company, told her my story and she assured me she was very good at clean up work and her prices were fair. She said it would take roughly one day to complete. I figured I should budget for two. It has now been over two months, my Quickbooks file is incomplete and seems to be inaccurate. I have paid $1,150.00. My bookkeeper has offered to finish up my bookkeeping through 2009 for free, but she can’t get to it for another two weeks. My quesetion is what action can I take. Should I continue to let her “fix” my books and lose another two weeks time and risk them being inaccurate or do I move on to another bookkeeper. HELP!
Micheal,
As you say, it sounds like there is a lot more to this story than is mentioned here. The fact that you have not done any bookkeeping for two years tells me that it is a huge job and would wonder about the availability of the details needed to complete an accurate set of books. I do believe that hiring a professional was the right choice, however, as I’m sure you can agree, not all bookkeepers are the same. In fact, you may find the article I wrote on my Smart Money Choices blog on how to hire a bookkeeper useful for future reference, if needed.
You asked for advice as to whether you should stick with your present bookkeeper to complete the work needed or to go elsewhere. Since your current bookkeeper obviously underestimated how much work/time was involved to complete your work, and she has promised to complete the work for free, it does not sound like waiting a couple extra weeks will really make a substantial difference. Likely it will take more than that to find someone else and get the work done anyway.
You mentioned that the work done so far appears to be inaccurate, yet you also mentioned that you have no bookkeeping or accounting experience yourself. Given that you have not yet filed your taxes for the past two years, I would expect that once the books are up to date, you will do so, with the help of a qualified tax accountant (CPA or Enrolled Agent). At that point in time, the accountant can assist you in any “correction” that may be needed to the books before preparing the tax returns. I do, however, suggest that you do not have the current bookkeeper prepare your tax returns (even if she is qualified to do so), since that will provide you some extra quality assurance.
Hope that helps.
Can anyone tell me anything about the Penn Foster bookkeeping program? Their cost is considerabley less than Universal.
Earl, I just finished the diploma program in Bookkeeping at Penn Foster. At first, I thought it was going to be a gravy class because the tests are open book. Boy was I wrong! To say that the class is rigorous is an understatement.
It starts off easy enough for the first couple of modules. And the excel and pc sections are pretty easy. But, in later modules you are taking all the cumulative knowledge and creating sets of books and financial statements and getting your multiple choice answers from their. So, if you don’t set up the books or create the statements correctly, you won’t come up with the right answer.
The kicker is the course project final. I spent quite a bit of time on it. I managed to get a 100 on it, but the instructor told me that less than 1% are able to do so. *pats self on back*… it was HARD. But, I probably learned more during the project phase then in the rest of the class.
The main drawback I see in the class is that it only teaches pen and paper bookkeeping. That is, of course, the most important thing to learn. If you know that, then you can apply that to any number of accounting software applications. However, I would have liked at least an overview of quickbooks.
One perk of graduating is that I received, as part of my graduation module, the study guides to AIPB’s CB exam and a voucher so I can take the first test for free.
As soon as I finished the bookkeeping course, I enrolled in the 1-year accounting certificate program. It does include an overview of quickbooks and peachtree, btw. They recently reconfigured it and it costs alot less. I highly recommend taking the bookkeeping course first. The next step is to actually take the CB exams and enroll in the ProAdvisor program.
As far as cost is concerned, you really cannot beat PF. I put $10 down when I started the bookkeeping program and paid $47 a month. I made extra payments to pay it off on time, but did so when it was financially convenient to me. When I enrolled in the accounting program, I think I put down $39 dollars and pay $49 a month.
I think the bookkeeping class is equivalent to Accounting Principles I and II. You would probably have to have it evaluated to transfer credits. However, the accounting classes are ACE certified credits. So, if a college accepts ACE credits, then your classes transfer. This would come in handy if you are pursuing an accounting bachelors degree. Currently, PF only offers Criminal Justice and Business Management(or administration, I can’t remember) bachelors degrees.
So, to sum up, the bookkeeping course is a great way to learn pen and paper bookkeeping, but you need to learn QB on your own. The accounting certificate takes you to the next level and gives you a deeper understanding of accounting and the ability to drill down into financial statements and really speak the language of business. And the credits are transferable…and both of these courses are affordable for just about anybody.
Wow! Thanks April for sharing your in-depth experience with the Penn Foster training. That is very helpful for all who are considering.
Thanks so much!
No, thank you. I just added this blog to my favorites list.