Who doesn’t want a little extra money on the side?
The term “side hustle” has been around for decades, but it has taken on new life in our virtual world. Most of the time, people start a side hustle because they want a little extra money on the side to fund an upcoming vacation or create a shopping fund. In the world of accounting, many CPAs moonlight as bookkeepers for friends or family, and sometimes those extra jobs grow into something more significant than they ever imagined.
At Gusto, we want to give accountants the tools they need to succeed, whether it’s a people-centered payroll platform or advice on making a side hustle a reality. Our online show, On the Margins: LIVE, with hosts Will Lopez and Caleb Newquist, answers questions in accounting that everyone wants to know—but never asks, such as “How can I turn my entrepreneurial dreams into a reality?”
In this episode, Kate Johnson, a talented solopreneur who turned her bookkeeping side hustle into a thriving virtual bookkeeping community, gives invaluable insight into what it takes to establish successful side jobs. Kate is the founder of Heritage Business Services and helps other solopreneurs and small business owners build their legacies.
Follow along as we dive into the world of entrepreneurship, virtual bookkeeping, and side hustles in this On the Margins interview.
The Bookkeeping Side Hustle: A story of work-life balance
Aside from her red hair, one of the things that stands out the most about Kate Johnson is her incredible work ethic. In a past life, Kate worked for ExxonMobil, and at one point, she was commuting between Houston, TX, and Fresno, CA, because of her husband’s station in the Navy.
After having three kids, she settled into the role of a stay-at-home mom—which was somewhere she never saw herself initially. Once her youngest was old enough to attend preschool, Kate found herself with something she had not experienced in a while: time to herself.
“When our youngest was about three, I realized that he was going to be starting preschool a couple of mornings a week. I wanted to be a good steward of that newfound free time, so I was investigating what I could do [with it]. … I’d always done well in my accounting classes, so I kind of relearned accounting. I started from the very beginning and learned about bookkeeping software and ways to serve small businesses.”– Kate Johnson
Her journey to starting her bookkeeping business was slow, and at one point, she was unsure if she was going to work in bookkeeping or as a real estate investor. However, at a local speed-networking night, she landed her first client.
“I was either going to be a bookkeeper or a real estate investor—like a flipper. I was going to lay hardwood floors. I went to real estate meetings locally, and they would have a speed-networking night. I just got my QuickBooks ProAdvisor certification, and I didn’t have business cards. I sat in the parking lot of this Holiday Inn … and wrote my name and phone number on post-it notes. I passed out those cards when everyone else passed out their business cards. Someone called me, and she was my first client.”– Kate Johnson
Kate’s business continued growing from that point forward. Even though she started without the basics, her clients knew she would meet their needs every step of the way. Now, Kate utilizes the skills she learned starting The Bookkeeping Side Hustle to help others learn about bookkeeping and earn more income by helping small business owners navigate their finances.
Increased flexibility through virtual bookkeeping
The increased implementation of technology in accounting gives accountants and those interested in starting a bookkeeping side hustle plenty of cloud-based options to meet clients’ needs. With programs like QuickBooks Online, Xero, and many others, today’s accounting professionals have plenty of opportunities to work virtually with clients across the nation. According to Kate, cloud-based accounting is the future for bookkeeping side hustles and large firms alike:
“[Cloud-based accounting] is fairly new, and there seem to be a lot of people who have very large firms who started off with three or four people on the side virtually. … There are lots of ways that you can do work in the cloud, and COVID just emphasized that even more. All of a sudden, every accounting firm was a cloud-based firm.”– Kate Johnson
Working through the cloud opens up new ways for bookkeepers and accountants to work more flexibly. Rather than stick to regular office hours, virtual bookkeepers can schedule clients whenever it is convenient. This flexibility suits both the accounting professional and client better than typical business hours. Additionally, their accountant can better accommodate clients who live in different time zones or keep odd hours.
“I can do accounting at 6:00 [o’clock] in the morning. I can serve my clients whenever it works for my family and me. I can log onto QuickBooks [whenever I need], I can run payroll on Gusto, and I can still get my kids to school on time.”– Kate Johnson
Maintaining a virtual firm also gives CPAs and bookkeepers increased flexibility in terms of location. The beauty of virtually serving clients means you can help clients from any location with an internet connection. Instead of relying on a trip into the office, accounting professionals implementing remote tools unlock the potential to work virtually anywhere in the world.
Steps to starting your bookkeeping side hustle
While stepping out on your own can be challenging, anyone can start a bookkeeping side hustle with enough determination and knowledge. However, those already in accounting have an advantage because of your solid foundation in bookkeeping knowledge. Kate identified the following areas as key to success when developing your own virtual bookkeeping business.
#1. Know the bookkeeping fundamentals
Essential knowledge of the bookkeeping process is the foundation of any successful accounting side business. Kate believes that you do not need to be a CPA to help your clients maintain their books, but you do need to work hard at understanding the fundamentals of accounting:
“I always start with this. You have to know accounting fundamentals. You don’t have to pass the CPA exam, but if you don’t know what a journal entry, … an old school T account, … or that assets equal liabilities plus equity, don’t start serving businesses because you’re not ready. You’ll hurt someone, and it’s people’s livelihoods we’re talking about.”– Kate Johnson
Handling accounts for clients is more than setting up a QuickBooks profile and letting it automate everything. Those who desire to serve clients through virtual bookkeeping processes need a thorough understanding of how accounting works.
#2. Learn virtual accounting software
To best serve your clients, you need to select a software option and work hard to understand it. Many software providers offer classes on how to use the software correctly, and after completing their courses, you can earn certifications for their platform. When making your software choice, try not to overthink the decision.
“You have to learn the software. I think people can over-analyze that. I think we’re at a point right now where there are [multiple] good solutions. We’ve been in the cloud for a while now, and I think picking a tech stack and becoming an expert [is better] than thinking, ‘What if I pick the wrong bookkeeping software or payroll program?’ … It’s a much bigger issue of whether you’re just going to put your nose down and work hard than whether you pick the right app.”– Kate Johnson
The most important part of your software selection is your dedication. Different software options may have slightly different features, but that does not mean one choice is more right than another.
#3. Set up your business and gain clients
As you start your bookkeeping side-business, avoid taking shortcuts. Take the time to establish a legal business before you start working with clients—then find ways to network and gain clients. Every business grows differently, but consistency helps in the process.
“[The last steps] are to set up a business and get clients. All of the steps are hard, but none of them are rocket science. … You’re going to feel like stopping at every step, but if you push through, then it’s great. … If you’re willing to work hard and not stop, [you will succeed].”– Kate Johnson
Growing a virtual bookkeeping business is not without its challenges. Depending on your starting point, it involves learning a new skillset, understanding software, and taking steps to win clients while establishing a new business. With enough hard work and dedication, you can grow your side hustle into a balanced and thriving source of income.
Learn more about Kate Johnson and the Bookkeeping Side Hustle
Kate’s journey is a story of hard work and dedication that led to success. On her journey, she found ways to make her occupation fit around her life rather than structuring her life around her job. If her journey is inspiring to you, and you want to learn more about establishing your own bookkeeping side hustle, join the Facebook group to learn more.
To watch the full episode featuring our interview with Kate, you can access the video here. Also, if you enjoy these On the Margins: LIVE articles, be sure to read the other piece from this episode, What Impact Does Cold Weather Have on the Small Business Economy?, to learn how the winter months impact small businesses around the nation.
Our mission at Gusto is to provide accountants and bookkeepers with the tools they need to be successful, whether it’s at a full-time job or a side hustle. Be sure to look into our People Advisory Program to learn how to help your clients succeed. We also provide a partner blog full of resources for all your advising needs. Visit our Gusto for Accountants page for more information on utilizing people-based accounting within your firm.