The Brutal Truth About Starting a Bookkeeping Business

Starting a bookkeeping business can be an incredible opportunity, but most people underestimate how difficult entrepreneurship really is.

In this video, I break down the brutal truth about starting a bookkeeping business. From dealing with difficult clients and messy financial records to learning sales, marketing, and client communication, running a bookkeeping business is very different from working as an accountant inside a company. 

Many people are also worried about artificial intelligence replacing bookkeepers. The reality is that bookkeepers will not be replaced by AI. Instead, bookkeepers who refuse to learn how to use new technology will be replaced by those who adapt and improve their skills. 

In this video we talk about:

• The truth about starting a bookkeeping business
• Whether AI will replace bookkeepers
• Why some business owners think they can do their own bookkeeping
• Why cheap bookkeeping often leads to expensive mistakes
• How reputation and trust determine your success
• Where most bookkeepers get their first clients
• Why speed and action matter more than overthinking
• The power of recurring monthly bookkeeping revenue

I also explain why reputation is one of the most valuable assets in a bookkeeping business. One strong referral from a happy client can generate months of new opportunities, while a bad experience can damage your credibility quickly. 

Building a successful bookkeeping business requires consistency, learning from mistakes, and being willing to put yourself out there. The bookkeepers who succeed are the ones who keep marketing, keep improving, and keep building trust with business owners.

*Learn more about my investment fund targeting 8% to 12% fixed returns*
https://www.zipcapitalfund.com/

Transcript

SPEAKER_00 0:00

The brutally honest truth about starting a bookkeeping business. Let's jump right into it. My name is Zach Pascarello. I started my bookkeeping business four years ago. I make these videos because, truthfully, I just love talking about my bookkeeping business. So let's talk about it. Let's talk about the brutally honest truth about starting a bookkeeping business. You can't make this video without first talking about artificial intelligence. Here's what I always say: you won't be replaced by AI, but instead, you're going to be replaced by people who know how to use AI. Don't be afraid of it. At least for now. For now, robots are not going to completely take over your job. How many times have you used Claude or ChatGPT or even QuickBooks Online and tried to automate something or tried to give it all the information and just relied on the output? How many times have you done that and it ended in disaster? Trust me, at least today in 2026, AI is not taking over the world. AI is not going to take over your job. But absolutely, people who know how to use AI, yes, for sure, they will take over your job because they are going to be able to work more efficiently. They're going to be able to get more done in less time and potentially charge a cheaper rate to do the same job. So you've got to stay on top of technology. You've got to learn how to use artificial intelligence. Why would you be afraid of something that's going to make your job easier? Learn how to use it, learn how to leverage it. Don't be afraid of it. It is literally just simply a tool that can make your job a lot easier, a lot faster. It's like anything. Just get started. Start using ChatGPT, start using Claude, just figure it out as you go. And then if you get stuck or if you really need help, you can always find somebody to help. It's actually a lot like social media. If you've never been on social media before, you're going to need to use it to promote your business. It's kind of intimidating. It's kind of hard to figure it out, but just get started. Create an account, start messing around with it, start testing things, start experimenting, start doing some things. Give it a month, two or three months, and just feel it out. Make some mistakes, learn some new things, do some research, watch some YouTube videos, read some blogs, see what other people are doing, and you'll be able to figure it out. And then if you can't figure it out, then you can always take a course or you could hire a consultant, but try to figure it out on your own first. Try to figure out how to use AI. Try to figure out how to use social media. You're going to have to learn how to use it. Just like people in the 90s and the early 2000s with computers and the internet, people didn't want to use it. People were afraid of it. And now, look, everybody's using the internet, everyone's using computers. It's just another tool. Artificial intelligence, don't be afraid of it. Outsourcing everything. So I've heard some people say they want to start a bookkeeping business and then hire overseas bookkeepers or just hire a bunch of independent contractors or have a bunch of staff accountants to do all the bookkeeping for you. Here's what I would say: I really think you need to have personal experience doing the bookkeeping first. That's just my opinion. That's what I've experienced in my own business. It's going to be really hard for you to manage other bookkeepers if you've got no idea how to do the bookkeeping. It's going to be a lot easier for you to optimize processes, implement systems, SOPs. That's going to be a lot easier if you do the work yourself. Now, I'm not saying for the next 10 years you have to be a solo entrepreneur. I'm not saying that you never hire employees or you never outsource the bookkeeping. I'm just saying, in the beginning, I think you have to learn how to do it first. Do it yourself first. If you're a fast learner, maybe three months, maybe six months. It doesn't have to be five years, it doesn't have to be two years. Spend a little bit of time. Do the work yourself if you really want to outsource everything. Then maybe you could hire some bookkeepers. Some people want to hire everything overseas. This might be controversial. I know I've got a lot of viewers who are not in the United States. I'll just be honest, I'm not a fan of American bookkeeping companies outsourcing the bookkeeping work overseas. Just my personal preference. I have some clients who would not like that. But then again, I probably have some clients who would not care if I did that. Just my personal preference. Outsourcing, the other thing, you never have to outsource. Look at me. I have never hired an employee. I've never had a bookkeeper to do all the bookkeeping for me. It's always just been me. So you don't have to. You could just be a solo entrepreneur the rest of your career. Here's what you have to remember: doing the bookkeeping is a lot different than managing other bookkeepers. Some people might be amazing bookkeepers, not great managers. Other people might be really great managers, not great bookkeepers. You have to figure out what is your strength. I want to encourage you. While that can be a good option, it's not an option for everybody. So I'm just here to give you both sides, both options, multiple options, multiple scenarios. You could potentially just simply do the bookkeeping yourself, do all the work yourself. And you could have 40, 60, 80 bookkeeping clients make 20, 30, 40,000 a month, monthly recurring revenue, and not have to worry about managing other people. So you don't have to outsource everything. Corporate accountant versus bookkeeper. So you might have you might be coming from a staff accountant job. You might be coming from a corporate accounting department. It's a lot different. Being a small business bookkeeper, being an entrepreneur, business owner, independent contractor, solo bookkeeper, very different than being a corporate accountant. Let's talk about gap, generally accepted accounting principles. Gap is a huge thing. Whenever you were in college, gap is huge. Whenever you were a staff accountant at a Fortune 500 company, gap is huge. As a small business bookkeeper, gap not so important. You need to understand bookkeeping fundamentals, don't get me wrong. You need to understand accounting concepts, but gap might not apply to your bookkeeping clients. So you got to keep that in mind. And then also, you don't have managers, you don't have peers to ask questions. Whenever you got your staff accountant job right out of college, you had three or four buddies who you could who had been there for a year or two. You had a manager who you could ask questions if you get stuck. As a sold-up entrepreneur, business owner, bookkeeper, you don't really have that same support system, which is not necessarily good or bad. It's just different. So you just have to go into this knowing you're gonna be on your own. Not a whole lot of help out there. Except for these videos, I like to think I make these videos to hopefully encourage and support and educate and inspire you. That's why I make these videos. And also, side note, check out my podcast. I have the exact same name. Bookkeeping expert Zach Pascarello is also on Spotify and Apple. It's the same thing, it's these videos, but in podcast format, so that if you're doing house chores or mowing the grass or driving or working out at the gym or doing anything else, you can just listen to the podcast instead of watching the YouTube video. Vice versa, if you're listening to the podcast, check out my YouTube channel. And I've got all these videos on my YouTube channel. Same name, bookkeeping expert, Zach Pascarello. You should be able to find me on YouTube, Apple, Spotify, and also Facebook, Instagram, and LinkedIn. Okay, corporate accountant versus bookkeeper. I call it the wild, wild west. I really think that being an entrepreneur, being a small business bookkeeper is the wild, wild west. Because there isn't gap. Gap doesn't necessarily apply to some of your bookkeeping clients. So it's kind of the wild, wild west. And these entrepreneurs are reckless with their finances. They do crazy things. They do things that you would never think that somebody would do. But I have seen it all. As a bookkeeper for six years, I have seen every possible situation and scenario. Probably the biggest thing to note is difficult clients. You were going to have clients test your boundaries. As a bookkeeper, you have to have thick skin. You've got to be firm. You've got to be decisive. You've got to be confident because these entrepreneurs are confident, firm, decisive, and courageous and potentially pushy. You're going to have difficult clients who test your boundaries, push your boundaries because they're trying to get their money's worth. They're trying to squeeze every ounce out of you. So if you say I'm a bookkeeper, and then if you start getting into admin tasks and invoices and accounts payable and receipts and checks and going to the bank and audits and sales tax and tax prep and payroll and everything else, checking mail, all of a sudden, they are testing your boundaries, and now you are in way over your head. And the$500 a month client is now all of a sudden taking 10 hours a month of your time, and you're like, oh my goodness, how did this happen? Oh, yeah, that's right. Zach said these difficult clients are going to test my boundaries. So you've got to be firm and decisive and confident. No, I cannot do that. No, I will not do that. No, that is not a part of our contract. That is not a part of our agreement. I am only doing bookkeeping. I'm only working with QuickBooks Online. Take it or leave it. Those are my services. That's my area of expertise. Difficult communication. Oh my goodness, this is one of my biggest pet peeves. This is one of the hardest parts, seriously, about customer service and managing clients, difficult communication. Some of these clients are going to be nearly impossible to answer to get to answer your emails. Some of them are never going to respond to your messages. And that is just the way it is. These business owners are busy, they're stressed out, they're overworked, and they are just stressed out from their finances and they're stressed out from everything going on in their business. And a lot of them think that by hiring you, they no longer have to worry about their finances. But that is actually so far from the truth. Actually, when somebody hires a bookkeeper, now you've got a trained professional looking at your finances through a microscope. So actually, now by hiring a bookkeeper, you are going to have to answer some difficult questions. You, as in the business owner. The business owner is going to need to communicate to the bookkeeper because we cannot read minds. If you deposit a$20,000 check into your bank, is that income? Or is that owner's investment? Or is that a cash loan? What is that? Or is that a refund or anything? Or if you send out a$50,000 wire, what was that? Did you buy a truck? Did you buy a house? Did you buy an office? Did you buy a piece of equipment? Did you buy supplies? Did you pay a contractor? You get the idea. Did you pay yourself? You get the idea. You gotta be able to communicate with your clients. And then the icing on the cake, incomplete documents. As bookkeepers, we need bank statements, credit card statements, payroll reports. We need a lot of documentation to do the bookkeeping. So there's going to be some difficult clients who will not send you complete documents after you request them. Real quick, let me just mention Zip Capital. I've got an investment fund. This is unrelated to the video. This is more like a sponsorship. Bear with me. Listen to me for 30 seconds, and then I promise I'll go right back to teaching you everything you need to know about the brutal truth of starting a bookkeeping business. Zip Capital, this is a real estate debt fund. It's only open to accredited investors. I am lending to Pennsylvania real estate investors. So I take other people's money and I've also got my money. I've got six million dollars lent out right now. Other people's money, my money, all mixed together. And I lend to Pennsylvania real estate investors all of my loans. Here's the cool part all of my loans secured by a first lien mortgage on houses, on property, on real estate investments. So if any of my borrowers default on their loans, I could foreclose on the property. So it's not a matter of if I'll get my money back, it's more so when would I get my money back? Because I will just simply foreclose on the property, take ownership, and sell it myself. So if you want, I'm targeting 8% up to 12% fixed returns to accredited investors. So check out the link in the description. My website is zippitalfund.com. You can go to my website, you can register, you can learn more, you can contact me. I would love to chat if you want to invest in zip capital. Thank you so much. Okay, business owners who think they can do it themselves. Whenever you're doing sales and marketing, you're going to come across, inevitably, business owners who think they can do it themselves. And so you're going to have to figure out how to sell to these people. How do you convince them that you are going to be able to help them? So there's two types of people out there. There's people who who know how to do their own bookkeeping, people who don't know how to do their own bookkeeping. The people who don't know, that's an easy sell. Hey, you don't know how to do your bookkeeping, you gotta hire me. The people who do know how to do their bookkeeping, that's fine. Next question: Do you have time to do your own bookkeeping? If you don't have time to do your bookkeeping, even if you know how to do it, too bad, you're gonna have to hire me. If you do know how to do it and you have time to do it, now you gotta ask yourself, is it worth your time? Is it worth your time? And can you do it right? You might think you know how to do it, but can you do it right? Is it worth your time? How much more valuable would it be? Pay me 500 bucks, I'll take over your QuickBooks online, I'll manage everything for you. You've got peace of mind knowing that it's done right, and it frees up your time to go do more important things in your business, like managing employees or recruiting or going to get new clients, sales and marketing. So you're going to have people who think they can do it themselves, and they might be able to, but you're just going to have to figure out how to sell to them, how to convince them that you might be a better option. And then there's going to be business owners who think that bookkeepers should be cheap. There's going to be business owners who think you're too expensive. Here's what I would say there are there are cheap bookkeepers, but there are very rarely cheap and good bookkeepers. Even more rarely, I would say never, cheap, good and fast. So you can only pick two. You can either be fast and good or cheap and good, or cheap and fast, which nobody really wants cheap and fast if it's gonna be bad. So I am never racing to the bottom. I'm always going to be, I'm never going to be the cheapest option, but I will always do my best to be the best and the fastest. I'm good and I'm fast. I'm not cheap and I'm honest about it. I'm up front. If you're looking for the cheapest bookkeeper, hey, let's just stop the conversation right now. Total transparency. I'm not the cheapest option, and I am okay with that. Uh, I don't advertise myself as the cheapest. I don't want to be the cheapest. I don't value myself as the cheapest option. That's not my business model, and I would encourage you, that should not be your business model either. Because once you get into that race, it's just a race to the bottom. And it's nobody wins at the bottom, trust me. You got to value yourself. You got to value your time. 25 bucks an hour, not enough. 50 bucks an hour, still probably not enough. If somebody was hiring you like part-time to work 20 hours a week as a trained professional, as a bookkeeping expert, as a specialist, then I would say 50,$50 an hour might be okay if they're giving you a ton of hours. But I think$100 an hour is totally fair for an outsourced bookkeeper. So here's the thing: we are not just, we are so much, we're so much different than an office manager. We're not better, we're not worse, we're just so different from an office manager. Of course, if you hire an office manager, an admin assistant, yeah, you're not going to pay them$100 an hour, but they're a generalist. They they manage your office, they manage your schedule, they pick up the phone, they check your mail, they go to the bank, office manager, admin assistant, great people. Business owners absolutely need office managers and administrative assistance. No shade. But bookkeepers are not office managers. Bookkeepers are specialized. We we do bookkeeping, we understand journal entries, we understand debits and credits, assets, liabilities, equity, income, expenses, accounts receivable, accounts payable, QuickBooks Online. We are specialists and we are experts in our field. And so you pay for that. You pay for the premium. We're not, we're not licensed attorneys, we're not CPAs, so we're not quite at that level, but we are much more, much different than an office manager and an administrative assistant. I think they need both. So what I find a lot is that I am communicating with the office manager. If I have questions, a lot of times they go through the office manager. And it's it's a lot of times if it's a bigger business, it's actually me working with the office manager and not the business owner. And truthfully, that is preferred. This has happened multiple times. This is actually happening right now. Sometimes, sadly, office managers leave, administrative assistants leave. And I am the first person to feel it. Uh, it hurts. It hurts me so bad when office managers when good office managers leave because that is my main point of contact in the business. And so now I'm either communicating with a new office manager or worse, I'm communicating with the business owner and they're too busy to answer my questions. So it's always very difficult, a very difficult transition when office managers and administrative assistants leave the business. So just be prepared for that. Treat these people with respect. Absolutely. These people are your best friend, they're your main point of contact, they are your lifeline. If you have questions, treat them with respect that they deserve because they are there to help you. And if you have a good relationship with the office manager, the admin assistant, it will make a big difference in your business because they will be able to answer your questions, get you the information you need, and be your liaison between you and the business owner. So treat these people with respect, have a have a good working relationship because they are incredibly valuable. Okay, next. The first few clients might actually come from your network. By the way, let me just say, is this helpful? I hope this is. Let me know if you have any questions down below. I don't always respond to questions, but I do read all the questions, all the comments. And so if I see a lot of comments, a lot of questions, maybe I will address them in your next video. And then, of course, if you haven't had a chance yet, definitely subscribe to my channel because I'm posting new videos every week and they're just designed to help you start and grow your own bookkeeping business. That's what it's all about, and that's why I'm here. Okay, first few clients might come from your network. So, what does that mean? You got to start talking about it. Start talking about your bookkeeping business casually. Don't be annoying, but casually. Like the next time you see an old friend, like, hey, anything new with you? Yeah, actually, as a matter of fact, I just started a bookkeeping business. Super cool. So if you know any business owners, let me know. Might be able to help them with their QuickBooks. Start marketing. Start marketing on social media. This video is not going to be about how to get clients, but your first few clients might actually come from the people who you already know. So your Facebook friends, your LinkedIn connections, start start talking about your bookkeeping business on social media. You never know. You never know who your cousin or your best friend from high school or that lady from church, they might have a business or they might know a business owner. So just start bringing it up casually. Just start asking questions. Who and ask yourself, who do you already know who's a business owner? Maybe reach out to them. Don't be annoying. Like I said, don't be annoying. Don't be that guy who's just always pestering somebody to try to get their business, but casually bring it up. If you know somebody's a business owner, maybe you reach out and say, hey, just started this bookkeeping business, just got my QuickBooks Online Pro Advisor certification. If you ever need any help, let me know. Be happy to take a look at your QuickBooks. Speed creates opportunities. Brutally honest truth. Speed creates opportunities. I see too many times people overthink it. Specifically when it comes to marketing, people think I gotta wait. Let me become, let me build my confidence, let me learn bookkeeping, let me become a QuickBooks Pro advisor. Let me finish my accounting degree. Let me get my associate's degree. Let me finish intro to accounting. Let me finish reading this book. Let me take this course. You gotta stop thinking like that because speed creates. Opportunities because it's going to take you a long time to get your first client. So here's what I recommend: as soon as you get the idea of starting a bookkeeping business, start marketing immediately. Start talking about what you're doing today. Today, make a Facebook post, announce to the world hey, just watch this awesome YouTube video by Zach Pascarello, and I am deciding to start my bookkeeping business today. And then just keep people updated with your journey because it's going to take a long time. Don't wait until you think you're ready because you're never going to be ready. The opportunity is never going to be perfect. The timing is never going to be right. You just got to get started. And then you're going to make mistakes. Don't be afraid to make mistakes. Mistakes are going to happen. I make mistakes. I made a lot of mistakes. I'm still making mistakes today. Here's my advice: learn from the mistakes. Don't make the same mistake twice. That's all you can do. You can't avoid making mistakes, but you absolutely can try to not make the same mistake twice. If you continue to make the same mistake over and over again, that's bad. That's going to lead to frustration, and that's bad. You don't want to do that. Try new things. You're going to have to try new things. If you don't try anything new, you're never going to accomplish anything new. Pretty, pretty straightforward, pretty standard. You got to be willing to put yourself out there. Sales, marketing, talking to clients, networking. As an entrepreneur, as a business owner, we are no longer W-2 employees. Your job is sales. Your job is to get clients. If that makes you uncomfortable, you got two options. Stop it, stop being uncomfortable, or this is not for you because you're going to have to get clients. There's no other way around it. You're going to have to put yourself out there. Whoever can make a decision, here, here's think about this for a second. Whoever can make a decision in half the amount of time can get twice as much done. Right? If it takes me two days to make a decision and do something, and then it takes you four days to make that same decision and do something, then in four days, I can get two things done. In four days, you only get one thing done. And that compounds on itself very quickly. And you can get faster. You can get faster and you can certainly get slower. If it takes somebody 30 days to make a decision and it takes you two days to make a decision, boom. You you are operating 15 times faster than that person. Think about that. Speed creates opportunities. Whoever can make a decision in half the amount of time can accomplish twice as much. Be fast. Niche. Niche. Niche, niche. I don't know. The more I think about it, the more I think it could help. For the past four years, I've been saying you don't need a niche, and I still don't think you need a niche. You do not need a niche, but I really think it could help. Kind of a new take on my channel. I really do think having a niche could help. It helps you specialize. It helps you become an expert. It helps you have a clear marketing strategy. Hey, real estate, real estate investors. Are you flipping properties? Are you holding rentals? Are you collecting rent? Are you tracking interest payments? Do you have mortgages? Do you have escrow accounts, property taxes, insurance, utilities, 1099s for your contractors, real estate investors? Do I have a solution for you? I can help manage your QuickBooks. I can help class track your properties so you can track the profitabilities of your flips. I can manage your inventory. When you're flipping properties, are you putting that into inventory or are you expensing that right away? Did you know a flip property needs to be tracked on the balance sheet until it's sold? You probably didn't know that. That was an example of marketing, of that. That was an example of your strategy. That was an example of your message, how you can help your clients. If you have a niche, you can vary, you can specialize your message and you can really seriously positively impact and you can really seriously solve people's problems. I think it could help. I really think that having a niche, industry niche, could help grow your business. The first 10 clients, you don't need a niche. First 20, take everybody, take anybody, learn, work with different industries, work with different entrepreneurs, work with different locations. Maybe you got a business owner in Texas, a business owner in Chicago, and a business owner in Oregon. Work with different locations, work with different industries. Maybe consider getting a niche down the road. I don't know. I don't know. It might help. I didn't necessarily do it, but it might help. I kind of started working with real estate investors. I don't know. The more I think about it, the more I think it might be able to help. Okay, two more things. Reputation, so valuable. Trust is everything. It's all about relationships. One strong referral from a happy client could be worth so much more than months of marketing. It might take you three months of social media marketing to get one client. You do a good job for that one client. They tell their buddy, boom, now you got two clients. Both of those two clients tell two of their friends, boom, you got four. Those four clients tell another one of their friends, boom, you got eight clients. You can see it customer service can grow your bookkeeping business exponentially. Good customer service can grow your bookkeeping business exponentially. On the flip side, do a bad job and it could be tough to recover. Reputation is so valuable. Reputation is priceless. It takes forever to maintain and build your reputation, and it takes a second to destroy your reputation. Make one bad decision, and it takes a second to destroy your reputation. So protect it, do the right thing, have integrity, be honest, be trustworthy, build relationships, focus on high quality customer service. Try, I don't want to scare you. Try to do the right thing and you're gonna be fine. Always have integrity, always be honest, and you're gonna be fine. Reviews, reviews, super important. Google reviews, Google My Business, very, very important. Last thing, monthly recurring revenue. This is predictable income. This is how you can plan your future. As an entrepreneur, it's so scary because you don't know what's gonna happen tomorrow. You don't know what's gonna happen with your business. But as a bookkeeper with monthly recurring revenue, you can have a pretty good idea. That's what I did. I went from 10 clients in my first year to 20 clients and then 40 clients and then 80 clients. And so I built my business from$5,000 a month, monthly recurring revenue in the first year to$10,000, to no,$5,000,$10,000, and then$20,000 in the third year, and then$40,000 of monthly recurring revenue at the end of year four. But also churn, you got to think about churn. Are you keeping clients? How quickly are they leaving? If they're leaving, find out why. Find out why your clients leave, have an exit survey, find out why clients leave and then fix it. Stop doing whatever makes them leave. Because customer service is the most important thing you can do. Marketing and sales is the hardest. Getting those first 10 clients is the hardest, but then keeping those 10 clients is the most important thing you can do because you already spent so much time on marketing and sales, you don't want to lose them. If you lose all your clients, you're going to have to continuously market and sell forever. But if you keep your clients, then your business will just maintain or slowly grow by delivering high quality customer service. That's it, everybody. That's it for the video. That's it for the podcast. Check out all the links down below. Zipcapitalfund.com. If you want to invest in zip capital, I'm targeting 8% up to 12% fixed returns to accredited investors. Thank you all so much. God bless you. Have a great day.