No matter what the size of a business is, every business has to maintain a daily, monthly and yearly ledger to track their expenses. Bookkeeping helps business owners maintain their accounts and track all transactions related to their business. With the development of communication, business owners now prefer online bookkeeping service than hiring a bookkeeper. So, providing online bookkeeping service can be a great career choice for you if you have knowledge of bookkeeping, accounting, etc.
What is Online Bookkeeping Service?
Bookkeeping is part of the process of accounting in business. It refers to a process that involves the recording, storing and retrieving of financial transactions for a company. Over the last decade or so, business owners are outsourcing bookkeeping services. In Canada, the scope of online bookkeeping service is great. According to the Canadian Federation of Independent Business, 75% of all Canadian businesses employ less than 5people and 95% of all businesses have less than 50people.This suggests that businesses in Canada are small in size. Moreover, every business owner has to file income tax returns against one’s business. So it is a must for them to maintain their accounts. That’s when they need the service of a bookkeeper.
Process of Setting Up Online Bookkeeping Service in Toronto
A certified bookkeeper with knowledge and experience of bookkeeping can easily set up online bookkeeping service. You can run your online bookkeeping service either from home or from office. A study conducted by The Bank of Montreal Institute for Small Business identified 6success factors for starting a small business. These are:
- Business and industry knowledge
- Organization and management capabilities
- Marketing skill
- Customer/vendor relations
So before starting your online bookkeeping service, you need to think about these factors. After considering everything, if you think you can run an online bookkeeping service, then follow these 5 steps to set up your online bookkeeping service in Toronto.
- Make a Business Plan: This is the first step of setting up any kind of business. And it is the most important part. The success of a business depends on selecting the right plan, because without planning, one cannot determine the direction one’s business is taking or measure its progress. 80% of the businesses fail because of poor planning. While planning your business you have to consider:
- Making the right business plan
- Management and operating plan
- Competitive analysis
- Market analysis
- Marketing plan
- Financial plan
- Choose a Form of Business: Now that you have a business plan, it’s time to choose a legal entity for your business. The most common forms of business entities are sole proprietorship, general and limited partnership, corporation, etc.
A business that is owned and operated by one individual is called a sole proprietorship. Setting up this kind of business is easy and inexpensive. If you want to start the business on a humble budget then sole proprietorship is the right choice for you.
General and limited partnership is different from sole proprietorship. In a general partnership, all partners are jointly and severally liable for the liability of the partnership. Meanwhile, in a limited partnership, a limited partner is only liable for the amount he/she invests in the firm.
A corporation is a single legal entity. Setting up this kind of business is more difficult and expensive. Moreover, you have to file annual income tax returns with both the Canada Revenue Agency and the provincial Ministry of Finance.
- Choose a Business Name and Register It: If you prefer your name as your business name then you don’t need to register your business name in Toronto. However, if you choose any other name then you have to register with the Companies Branch of the Ministry of Consumer and Business Services. Each province has different regulations.
- Register for GST/HST: To set up an online bookkeeping service you need a GST number. So you have to register for Goods & Services Tax (GST)/Harmonized Sales Tax (HST). You can visit Canada Revenue Agency for more information regarding how to apply for GST number.
- Consider Purchasing Liability Insurance: Liability Insurance is an insurance policy that protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice, injury or negligence. So it is always better to have a liability insurance against your company.
Every budding entrepreneur has dreamt about being the boss of one’s own successful business. But the truth is that success rate is very low. Selecting the right business plan and executing it properly is the secret of a successful business. Moreover, the demand for bookkeeping service in Toronto is very high. So the decision of setting up online bookkeeping service is right for you if you follow the aforementioned steps.