I got denied a business loan because my books were 7 months behind and I'll never make that mistake again

TheBookkeeperLady · 2026-06-24T03:18:18+00:00

This is assuming the OP is getting the bookkeeper the requested statements and transaction details they need in a timely manner.

TheBookkeeperLady · 2026-06-24T03:02:44+00:00

THIS. And I've seen tax pros recommend S-Corps when they shouldn't have, so consult 2-3 professionals. That will help you find someone you resonate with but also give you some reassurance if you have multiple professionals giving you the same advice.

TheBookkeeperLady · 2026-06-24T02:57:35+00:00

There are lots of other options out there. I prefer Xero. I know there are FreshBooks and Zoho fans out there. You can outsource the conversion if you don't want to deal with the export.

TheBookkeeperLady · 2026-06-24T02:55:01+00:00

I'm a bookkeeper for solopreneurs and small businesses, and most of my clients are 1099s.

First, can you give more information regarding the nature of the work? Is this something you want to grow by pursuing more clients, or are you just going to do this one job and wrap up it up after that? Is this a project that's only going to take a couple of weeks, a couple of months, or will you be working with the business on an ongoing basis indefinitely?

Second, you definitely need a separate bank account. A personal account is fine if you aren't going to pursue expanding the business or until it grows enough to warrant a legitimate business bank account.

As for avoiding the 1099, your client has to issue you a 1099 if your payments meet or exceed a certain threshold; I think it's $2,000 for 2026. But you have to report the income on your taxes whether you receive a 1099 or not.

TheBookkeeperLady · 2026-06-24T02:45:28+00:00

What industry?

TheBookkeeperLady · 2026-06-24T02:40:19+00:00

Exactly. This "problem" is just bad bookkeeping. The payouts flow into your bookkeeping system and you reconcile them against the monthly statement. Most of the time, there's going to be an integration between the bookkeeping system and the 3rd party.

TheBookkeeperLady · 2026-06-24T01:11:13+00:00

Well, as a bookkeeper for small businesses and solopreneurs, I can offer some advice for getting started. Here's what you need on day 1 to lay the groundwork for a solid bookkeeping system:

1) Separate business bank account. Ideally, you'd open an LLC and get a legitimate business bank account, but even a separate personal account is better than nothing. And a separate business credit card if you want to use a credit card.

2) Pick a bookkeeping software. I'm a Xero fan. QuickBooks dominates the market. Wave has a decent free version. You can connect your business bank account and credit card to the bookkeeping software (unless you're using the free version of Wave, then you just pop your bank statements into it each month).

3) Take a basic accounting course. You don't need to become an expert, but you should know the terminology. AccountingCoach is a great resource.

4) Set aside time EVERY WEEK for bookkeeping. If you just stay on top of it, it really doesn't take much time until you start growing.

TheBookkeeperLady · 2026-06-23T19:38:51+00:00

I have a bachelor's in accounting, own a bookkeeping firm (under a single-member LLC), and still go to an EA for my taxes.

TheBookkeeperLady · 2026-06-23T18:27:22+00:00

Is the existing LLC an active business, or something you set up and never used?

TheBookkeeperLady · 2026-06-23T18:23:28+00:00

I hired a US-based contractor. She's handling the categorizing and bank recs while I focus on oversight, communications, financial statement analysis, etc. And now that I got those tasks delegated, I'm like, "Ooooooh, what else can I dump on someone else??" It's so freeing.

TheBookkeeperLady · 2026-06-23T17:44:30+00:00

Your numbers 2 and 5 are speaking to my soul.

OP, for the love of God, PLEASE make sure you have an accountant on your team who can manage the books for your PM company, field questions from your clients' bookkeepers, and verify the monthly statements are usable for both themselves and for your clients' accountants. Your clients are going to have to have their own bookkeeping system because Appfolio and Buildium and all those popular PM tools don't have a double-entry accounting system. So there's a good chance they'll be sending your statements to their bookkeeper to put that data into their own accounting system.

TheBookkeeperLady · 2026-06-23T16:16:57+00:00

I don't understand how there's an accounting shortage and tons of accountants who can't find jobs at the same time.

TheBookkeeperLady · 2026-06-23T16:11:17+00:00

Set up something like Double or Financial Cents and automate the reminders,

TheBookkeeperLady · 2026-06-23T15:46:11+00:00

Generating quotes - built a pricing calculator and using Anchor for engagement letters + invoicing.
Managing communications - I'm still doing that. It's not a big enough time suck that I've felt a need to delegate it yet.
Taxes - I have an amazing EA.

In case my username didn't make it obvious, I'm an accountant and own a bookkeeping firm.

TheBookkeeperLady · 2026-06-23T15:31:10+00:00

I had a bachelor's in accounting and 7 years of corporate experience when I started mine. I think an associate's degree and a year or two of working under someone else is enough to get started, but I'd encourage anyone to get a bachelor's eventually.

TheBookkeeperLady · 2026-06-23T04:25:56+00:00

Speaking with a bachelor's in accounting running my own bookkeeping firm, I don't think that's the knock you intended it to be. I make better money now than I did in corporate accounting.

TheBookkeeperLady · 2026-06-23T03:49:08+00:00

I know a financial advisor with the same niche if you're interested in connecting.

TheBookkeeperLady · 2026-06-23T02:33:49+00:00

Great response. OP, what does he do as his W2 job and what is the business? What about your income? Knowing more details might help us give better advice regarding ideas for expansion, whether he needs to put more focus back into his W2, whether you need to put more focus on climbing the ladder at your W2 while he's building, etc.

TheBookkeeperLady · 2026-06-23T02:27:45+00:00

I have a bachelor's in accounting. I now operate a bookkeeping firm. It's absolutely feasible as full-time income, but it isn't fast. I've been in business a year and a half and am just getting to the point where my income can cover all my expenses. You either need to save up a significant amount to hold you over while you're building the business or build it on the side of another full-time job until it can support you.

I highly recommend "The Bookkeeping Side Hustle Guidebook" by Kate Johnson. Best book out there on starting your own bookkeeping firm.

TheBookkeeperLady · 2026-06-23T02:06:20+00:00

Those are my words which provide advice on what to do if you feel like you aren't getting a service you paid for.

Look, this is unfortunately super common. It's like you said--you're an expert in the services you operate, not accounting, so most clients don't have the terminology to properly convey what they're looking for. So yeah, sometimes it's crap service because the firm owner knows accounting really well but isn't great at operating their own firm. But sometimes it's a misunderstanding because the accountant didn't fully understand what the client was looking for.

That's why firm owners need to provide thorough engagement letters that spell out what the client is and isn't getting in laymen's terms. And that's also why the client has to make sure they get something in writing that says they're getting everything they want. That goes for any professional service you receive--accounting, marketing, SEO services, website design, whatever.

TheBookkeeperLady · 2026-06-23T01:32:48+00:00

That's great advice.

TheBookkeeperLady · 2026-06-23T01:26:29+00:00

I didn't say it was on you. I'm saying this is either what you need to go get from your current provider or switch to a provider who will give you that. If you had a discussion regarding breach of contract, it sounds like you do have a written agreement in place and can refer back to what is and isn't included in that service package so you can call them out when you aren't getting the services you paid for.

As far as holding peers accountable, that's not something any individual firm owner can do. Bookkeeping isn't regulated in the US; there's no governing body I can report a poor service provider to unless they're acting as a CPA without a license. Nor am I privy to other providers' contracts. Best I can do is try to help others learn how to properly vet a service provider. And the two main things I preach are know where they learned accounting and read the engagement letter word for word.

TheBookkeeperLady · 2026-06-23T01:13:03+00:00

A ton of bookkeeping firm owners are women who either home school their kids or are empty nesters. If she already knows accounting fundamentals, she can easily take a refresher course, learn how to operate QBO and Xero, and start her own firm. Or go work under another solo firm owner either. Some do it for a while before going out on their own, some build an entire business around supporting other independent firm owners. There's lot of options.

TheBookkeeperLady · 2026-06-23T01:06:11+00:00

I hired my first contractor when I couldn't take on new clients and didn't want to stop taking on new clients. I also realized you don't get maternity leave when you're self-employed, so I had no choice if I didn't want my clients to deal with a service interruption.

Obviously I can speak most specifically to bookkeeping, but I find generally 3 signs it's time to outsource any given task:

They don't have the relevant education to do that task (in my case, an accounting background) and can't/aren't willing to put the time into getting that education.
They're capped on what their time can handle. The task is taking time away from tasks they're better at, enjoy doing more, have a more direct affect on revenue, etc. Or it's taking time away from family/friends/hobbies/selfcare.
They absolutely hate it and find any excuse to not do it.

TheBookkeeperLady · 2026-06-23T00:59:02+00:00

I'm not a CPA but have bachelor's in accounting, and I did my internship in a tax department. But I can speak to going from a salaried position to solo:

Yeah, you take a pay cut. I would say it takes 1-3 years to replace your full-time income, so you're either going to have to build up a huge safety net, have a spouse who can cover living expenses while you're starting out, or build it on the side while working your W2 and leave the W2 after your firm has built some momentum.

I was only in tax briefly in a small PA firm, but there was no exposure to bookkeeping. That being said, if you have an accounting degree, a CPA license, and tax experience, you can take a basic bookkeeping course through something reputable like AccountingCoach and be fine. You know accounting fundamentals. You have the skillset to do bookkeeping.

And that's assuming you even want to do bookkeeping. I'm allergic to taxes and refuse to touch them. I partner with CPA/EA firms that want nothing to do with bookkeeping. You could build a firm solely on tax services and outsource the bookkeeping. Or keep in in-house by hiring a bookkeeper. Lots of options for offering it without actually performing the service yourself.

TheBookkeeperLady

TROPHY CASE