Starting a Bookkeeping Business: The Order of Steps

Starting a bookkeeping business means choosing who will trade, checking which services need registration and arranging cover before you accept regulated work. Prepare your client paperwork while registrations are assessed. An application receipt does not let you start charging for BAS services.

The Order to Start a Bookkeeping Business in

Start with the work you intend to sell, then set up the entity that will contract with your clients. Use this sequence to avoid preparing an application for a business arrangement you later change.

1. List your services and separate ordinary bookkeeping from regulated BAS work. This determines whether registration must precede the first paid job.
2. Choose your business entity. For a company, establish the company before applying for its Australian Business Number (ABN).
3. Apply for the entity’s ABN. Assess goods and services tax (GST) registration and register a business name if you will trade under one.
4. Check your qualifications and relevant experience. Obtain transcripts and experience statements before submitting your Tax Practitioners Board (TPB) application.
5. Submit the required individual and entity applications. Allow weeks for assessment, with longer preparation if qualifications or experience are missing.
6. Arrange professional indemnity cover for the work and contracting entity. Prepare your banking and secure document storage while waiting.
7. Write your engagement letter and client form. Set up identity checks, permissions and a record of each job.
8. Confirm registration and cover before accepting paid BAS work. Agree the first client’s scope and fee before starting.

The TPB aims to assess a complete application within 30 days, although high application volumes can extend processing to 60 days. Those are assessment estimates, not permission to begin early. If you leave employment in three weeks, keep savings for a longer wait and quote only work you can legally provide.

A practical three-month setup plan puts entity decisions and the application in the first month. Banking, paperwork and permitted bookkeeping can follow during assessment. After approval, start regulated engagements and review the first jobs in the third month. Move the client start point if approval arrives later. TPB application guidance sets out the decision process.

Starting a bookkeeping business from home changes the workspace, not the Australian registration duties. Use a room where family members and visitors cannot read client records. Keep work devices separate and give each user their own sign-in. If clients visit, assess council rules and your lease, and discuss business use with your home insurer. A remote practice also needs a suitable remote identity-check method.

Entity registration where applicable, GST registration when required and BAS registration for regulated paid work are legal requirements. A separate operating account, an early written scope agreement and a cash reserve are practical setup choices. They help you start without making every preparation step a legal prerequisite.

Deciding What You May Charge for Before You Are Registered

Before BAS registration, charge only for services that fall outside the regulated definition or meet a genuine exemption. The name on your invoice does not decide whether the work is regulated.

The TPB identifies data entry without tax interpretation and ordinary bank reconciliations as examples outside BAS services. Determining GST treatment, advising on withholding obligations and preparing activity-statement figures can be regulated services. Client reliance on your advice is part of the test. A pending application does not create an exemption. Check the BAS services boundary before agreeing a job.

For example, you can enter transactions using settled instructions without deciding their tax treatment. If a client asks whether a purchase earns a GST credit, stop and send that question to a registered agent. Avoid describing a reconciliation as ordinary bookkeeping when you are actually confirming figures for the activity statement.

Paid work performed for a registered agent requires a properly defined arrangement. The TPB’s contractor guidance distinguishes work done for the agent from services a client relies on directly. A registered agent signing your work afterwards does not automatically exempt your business. Providing or advertising paid BAS services while unregistered exposes you to civil penalties.

The Registrations That Have to Be in Place

Register the entity that will provide the service, then arrange its ABN and other required registrations before trading under its name. Your engagement letter, invoices and insurance must identify the same contracting entity.

For a sole trader, the individual is the business and applies for individual BAS registration. A company or partnership providing paid BAS services needs entity registration as well. It must have enough registered individual BAS or tax agents to provide competent services and supervision. An individual’s registration does not automatically register their company. Follow the BAS agent registration steps for the chosen arrangement.

An eligible business can apply for an ABN through the Australian Business Register. A business name registration is required when trading under a name other than your own legal name. It does not create a separate legal entity or BAS registration.

A for-profit practice generally must register for GST when its GST turnover meets the $75,000 threshold. Assess projected turnover too, including the current month and the next 11 months. A new practice expecting to reach the threshold cannot wait for a full year of invoices. Register within 21 days of becoming required to register. The ATO’s GST registration rules explain the turnover exclusions and current-versus-projected test.

Individual BAS registration requires at least the relevant Certificate IV qualification, a Board-approved GST/BAS course and relevant experience. The standard path requires 1,400 hours in the preceding four years. The recognised-association voting-member path requires 1,000 hours over that period. Use the qualification and experience requirements and the registration guide to assemble your evidence. Missing hours are a preparation problem, not something an ABN fixes.

Cover, Money and the Parts People Forget

Arrange professional indemnity insurance for your actual services and legal entity before you start registered practice. An employer’s policy needs reassessment when you leave employment and take on your own clients.

The TPB’s insurance requirements require BAS agents to maintain cover throughout registration. Minimum aggregate cover is $250,000 for turnover up to $75,000 excluding GST. It rises to $500,000 for turnover from $75,001 to $500,000 and $1 million above that. The policy must cover civil liability from BAS services and the people providing them on your behalf. Consider the legal and defence-cost provisions and an excess you can afford.

Notify the TPB of your arrangements within 14 days of registration notification unless already supplied. Use the professional indemnity guide for the policy details.

Open the operating account in the correct name and record business income and expenses from the first week. A separate account helps a sole trader avoid mixing private transactions with client receipts. Choose the bookkeeping subscriptions you need for actual client work. Decide who owns each subscription and how clients get their records if they leave.

Secure storage, two-step sign-in and a tested backup belong in the first setup, even for two clients. Arrange client access through delegated permissions. Sharing the client’s banking password makes responsibility and access harder to track.

If you receive money to pay a client’s tax bill or another liability, you may hold it on trust. Keep it separate from your operating money and maintain records of receipts and payments for each client. Document authority before paying it out. The TPB’s client-money guidance explains the duty to account. Professional-body trust-accounting standards can add requirements.

The simpler starting arrangement is for the client to retain their money and approve payments from their own account.

What Has to Exist Before the First Client Signs

Prepare an engagement letter, a client form and an identity-check record before you offer the first engagement. Use them to decide whether the work fits your registration and capacity.

Write the services, responsibilities, fee basis and exclusions in the bookkeeping engagement letter. The TPB strongly recommends a written agreement before services begin. A signed letter is not a universal statutory registration condition. Professional standards can require documented and communicated terms, so check the standards that apply to your membership.

With no client history, verify the person engaging you and their authority to act for the entity. Match entity details to the relevant register and supporting documents. For a trust, identify the trustee and the person who can instruct you. A referral or a matching ABN alone does not establish the person’s identity.

Follow the TPB’s client-verification guidance and retain a contemporaneous check record. The TPB does not recommend keeping copies of identity documents simply to prove the check occurred.

Automate the repeatable collection work first. A form can request entity details and documents, while reminders chase missing answers. Keep acceptance decisions and unusual authority questions with you. Read the first-client onboarding checklist for the handover into the first job.

Before work starts, confirm that the accepted letter names the correct client, your registration covers the work and cover is active. Check that identity and authority are recorded, software access works and the first deadline has an owner. If documents reveal a different entity, resolve it before starting instead of carrying the mismatch into the accounts.

Pricing and Quoting Those First Clients

Quote the first clients from an inspected set of records and a defined workload. When you have no job history, use a limited initial review to estimate time and identify overdue work.

Ask about transaction volume, payroll frequency, employees, reporting needs and document quality. Separate setup and historical clean-up from the recurring fee. Include time for reviewing unfamiliar records and speaking with the client. State whether fees are hourly or fixed and whether GST applies.

A hypothetical first client has three months of unreconciled bank activity and missing supplier invoices. Quoting only a normal monthly fee commits you to unpaid recovery work before the regular service even starts. Quote a separate diagnostic review, then obtain approval for the clean-up scope once its size is known.

For the first three months, describe the recurring work in measurable terms. State the number of bank accounts, the expected transaction range, payroll frequency and included reports. Identify who supplies documents and by when. Record what happens when volumes exceed the agreed range or earlier errors appear.

Schedule a scope review after the first month and again after three months. Compare actual time and requests with the quote before proposing a change. Agree extra work in writing before undertaking it. A review clause gives you a point to discuss fees, not an automatic right to change an accepted fixed price.

Duties That Begin the Day Registration is Granted

Registration starts ongoing professional duties, even while your client list is small. Schedule them alongside the first engagements instead of waiting for renewal.

A standard BAS agent must complete 90 hours of relevant continuing professional education over three years, with at least 20 hours each year. Annual registration does not turn that into a one-year CPE period. Keep a record of activities and plan learning relevant to your services. The TPB’s CPE policy explains the period and association-based options.

The Code of Professional Conduct requires integrity, confidentiality and competent services. Manage conflicts and exercise reasonable care. Maintain insurance, proper client records and the applicable quality-management arrangements. Give clients the required written information about registration, complaints and their rights and obligations.

Tell the TPB about registration-detail and circumstance changes as required. Changes to contact details, insurance, the trading entity or events affecting eligibility each need assessment. Moving from sole trader to company needs a registration review before the company provides paid BAS work. Make checking these changes part of your regular practice review.

Anti-money laundering and counter-terrorism financing (AML/CTF) duties depend on the services your business provides. The professional-services reforms apply to designated services with the required Australian connection. Ordinary bookkeeping does not automatically make every engagement regulated. Entity creation, registered-office services and some client-money activities can change the position. AUSTRAC’s professional-services guidance carries the commencement boundary and exemptions.

AUSTRAC distinguishes routine payments under fixed client instructions from discretionary management of client money. The incidental-payments exception depends on the whole business providing no other designated services. Reassess the position before adding a new service. If the service is regulated, arrange the required AML/CTF program and customer checks before delivering it. Keep that service off your accepted scope until those arrangements are ready.