How to Start a Bookkeeping Business in New Zealand

If you want to start a bookkeeping business in New Zealand, it is a good idea to research the market for opportunities and to define your service offering. You can choose to serve a specific niche, like businesses in the construction industry. Some of the crucial decisions you will make as part of starting your venture include choosing a business structure and setting up your technology systems. This article discusses:

• the various steps you need to take to start your bookkeeping business in New Zealand;
• your legal and tax obligations; and
• how to promote your services.

Get Your Licences and Qualifications 

To become a professional bookkeeper in New Zealand you will need some training and certifications. Most bookkeeping qualifications are at diploma or certificate level. You can start working as a bookkeeper with only a secondary school qualification. However, if you want to start your own business, it is best to: 

• get further education; and 
• join The Institute of Certified Bookkeepers NZ, to improve your credibility. 

Most prospective clients will also expect you to have some experience, including an endorsement from business owners like themselves.

Further, to become a registered tax agent, you have to register with Inland Revenue and meet specific criteria. 

For example, as a bookkeeper, you must have signed authorities to act for ten or more other clients in relation to their tax affairs, social policy entitlements, or both.

Create a Strategic Plan for Your Bookkeeping Business

As a bookkeeper, you can offer a number of services, such as assisting clients with:

• managing their accounts payable and accounts receivable;
• preparing their bank reconciliations; 
• meeting their tax obligations, such as preparing and filing tax and GST returns; 
• managing their payroll and PAYE; 
• software migration, set up and training; 
• financial reporting; 
• managing backlogs; and 
• correcting errors. 

It is tempting to offer as many services as possible to widen your potential client base. However, if there is already a lot of competition servicing your target market and you want to differentiate your offering on quality, you may have a better chance of succeeding if you: 

• specialise in a few areas; or 
• find a niche, like construction businesses. 

Creating a business plan can help you identify opportunities in the market and determine the profitability of your offering. You can also access free mentoring programs and support provided to business owners in New Zealand. 

Set Up Your Bookkeeping Business

Some of the crucial steps of setting up your bookkeeping business include deciding on how to structure your business from a legal perspective. It is common for bookkeepers to start as sole traders or partnerships. However, a company structure, even though more time consuming and expensive to set up and manage, can also have some financial advantages, such as: 

• a lower tax rate compared to the highest bracket for individuals; 
• limiting your liabilities and protecting your personal assets; and 
• better access to finance to grow your business.

Once you have decided on a structure, setting up your business is generally an easy process that you can carry out online, using the New Zealand government’s website. Some of the key tasks you need to complete include:

• choosing a name for your business and checking that it is not already in use by another business; 
• protecting your name, brand assets and domain by registering a trade mark with IPONZ; 
• registering your business with the NZBN or Companies Office and getting an NZBN number;
• registering with Inland Revenue for tax, employment and GST purposes; and 
• getting commercial insurance for your business including professional indemnity. 

Set Up Your Tech Stack

To run a bookkeeping business you do not need to invest in expensive or complex hardware. However, you will need reliable accounting software. The more you can automate manual tasks, the more you can free up your time to focus on other crucial business decisions, such as winning new clients. 

Some of the benefits of using smart accounting software include: 

• reducing the amount of in-person meetings with your clients, as you can both login into the system at the same time and discuss any issues over the phone;
• reducing the amount of time spent on data entry; and
• automating daily bank reconciliations and payroll.

You should also consider investing in some form of practice management software to help you manage your workflows. When choosing your software, you should compare different providers and look beyond in-product features. Some providers also offer a partner program, which can help you grow your business.

Build a Digital Presence

To attract new customers and keep a regular flow of work throughout the year, you need to build a strong digital presence. This requires you to develop and implement a marketing strategy. 

First, you have to understand your potential customers and how they consume information online. A good tactic is to break up your ideal customers into buyer personas based on their demographics and behaviour.

Once you have defined your service offering and buyer personas, you can set up your website and blog. Your website should clearly: 

• outline your service offering;
• explain how you price your services; and 
• allow your customers to contact you easily.

Even though having a blog is not imperative, it is a great way for your potential customers to find you online. If you have limited time and resources, you can connect with guest bloggers or join a referral program that allows you to share content. If blogging is not for you, investing in Google ads can be a cost-effective way to compete with other bookkeeping businesses online.

You should also invest in a marketing platform like Mailchimp to help you send more effective email communications based on your customers’ purchase behaviour. Local marketing tactics can help you attract more local customers. 

Finally, social media is an easy and affordable way to reach potential clients. Importantly, it will take a significant time investment to build your small business’ profile on social media before you start to gain traction.

Key Takeaways

From obtaining your qualifications and registrations to protecting your assets, starting your own bookkeeping business requires a bit of planning. Some of the key tasks include: 

• creating a business plan to help you define your service offering;
• deciding on a business structure and registering your business with the NZBN or Companies Office;
• registering your business with Inland Revenue and as a tax agent if you would like to act on your clients’ behalf; 
• choosing an accounting and practice management software; and
• developing a marketing strategy to help you grow your business and maintain a regular flow of work.

If you need help with the legalities of getting your business off the ground, contact LegalVision’s business lawyers on 0800 005 570 or fill out the form on this page.

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