Increasingly, many bookkeepers are choosing to go self-employed and become freelancers.
Enabled by technology, the principal advantage of being your own boss is flexibility – in terms of hours, lifestyle and family commitments. But there are risks to consider to. You have to be organised, motivated and able to deal with the inherent uncertainties that being self-employed brings. So how to make the best of being a freelancer – and what pitfalls to avoid?
Know your market
Before you go solo, check you are equipped to run a successful business: that you will get clients, and can live without the safety net of an employer. Make sure you price your services correctly – you can always lower your rates, but it’s very hard to put them up once you’ve agreed a rate with a client. ‘Phone around asking prices within at least a 30-mile radius; with the power of the internet people are more willing to go further afield nowadays,’ says bookkeeper Adele Atkinson. ‘Remember that you will not be VAT-registered so you’re always at an advantage against larger competitors. However,’ Adele emphasises, ‘don’t be tempted to undercut massively. Although many people like a bargain, they become suspicious if you are too cheap; they will think it’s because you’re not good enough to charge the going rate.’
Bear in mind that you are not being paid for anything other than the work you do – there’s no holiday pay, sick pay, pension contribution or benefits package – all this has to be reflected in your rate.
If you are contemplating whether to break from a salaried job to become a freelancer, your client base will be a key consideration. Try to ensure you have enough customers in advance to make a success of the business; but as bookkeeping is a profession that’s always in demand, this is not as essential as it might be in other industries. ‘Do check that there isn’t a plethora of similar businesses making the market saturated,’ says Adele. ‘However, it’s surprising how quickly you build a client base.’ The advice, in other words, is not to fear going freelance – the work is out there.
Home or office?
One of the great advantages of today’s bookkeeping software is that you can work anywhere – at home, in the office or on the move. As a freelancer, you will then have the choice about whether to have a dedicated office or simply work from home. ‘You don’t have the overheads of separate premises and you can pass that saving on to keep your fees lower than a high street business,’ says Adele. ‘There’s the added advantage that you can offset some of the costs of your household bills; or if you rent, a proportion of that can be offset against the business.’
But there are some disadvantages to working from home too. ‘It can be hard to take a break, you can be tempted to work late into the night, and it can be difficult to motivate yourself to start work. Procrastination is the disease of the self-employed!’ To combat this, Adele suggests, ‘be disciplined and try to set working hours.’ Adele’s office is located in the garden – ‘which means I can say, “I’m off to work now!” It just helps with your mindset.’
Differentiate the business
As a freelancer you will need to distinguish yourself from your competitors – you don’t have the ‘brand’ that a high street business has. ‘In order to grow the business,’ bookkeeper Jo McAllister says, ‘a qualification really helps.’ Having completed her AAT qualification in October, Jo is proud that ‘this gives people confidence in you and I use the letters after my name in every communication I send out.’ Clients also know that you will be committed to doing CPD – ‘this is a good selling point because it means you’re not just somebody operating from a spare room. I recently signed a mortgage statement for someone, for example, which I couldn’t do before I was qualified.’
Whilst word of mouth is likely to be a key advantage, bookkeeping as a profession is one that particularly benefits from accreditation. ‘Because accountancy isn’t a protected profession, anyone can say they are an accountant or a bookkeeper,’ says Jo. ‘Many are perfectly qualified by experience – but it’s good to be able to say I am AAT-licensed, that I have a certificate and insurance, and that I follow everything that needs to be followed. You can reflect this in your rates – there may be others who are cheaper, but do they know what they’re talking about?’
Technology is the enabler
‘Many accountancy and payroll programmes are now cloud-based,’ Adele says, ‘which means you’re not tied to your own computer or laptop and can access through any computer. If, for example, you’re on holiday and a client urgently needs some information – you can access it and carry on with your business.’ Adele uses a cloud-based system designed for small companies that offers ‘fixed land line, mobile number and internet access on an iPad or laptop through a single platform, with the bonus of audio and video conferencing.’ The key is to work out what you want from your technology – what suits you as an individual. ‘If I fancy taking my lunch break on the beach, I am still contactable; meaning I don’t lose business, whilst adding better customer service as they can reach me at any time.’
Getting the software up and running can take time, ‘so in your first couple of years, consider paying for the extra telephone support on offer to help use it,’ Adele recommends. ‘This can save hours of trawling the internet for advice and ultimately gives you more time to carry on the business – saving stress and worry when something goes wrong and you don’t know how to fix it!’
Finally, going solo means you are in charge of your time. ‘It’s convenient to fit around my son,’ says Jo McAllister. ‘For women in particular, being a bookkeeper can an excellent career choice because it helps you juggle earning a living whilst bringing up small children. You don’t have to work 9-5,’ Jo adds; ‘you can do a couple of hours in the evening or early in the morning.’ This again gives you the chance to offer better service. ‘The majority of my clients want to see me in the evening as they have children too – everyone benefits.’
Adele agrees. ‘Most of all, have fun and enjoy your work. This was the reason you wanted to work for yourself in the first place – to be your own boss. So be kind to yourself!’
Mark Blayney Stuart is Business Journalist of the Year, Wales Media Awards 2017 and Former Head of Research at the Chartered Institute of Marketing.