Episode #031 How To Get Bookkeeping Clients When You Have No Experience

There's some key, frequently asked question by pre-start up bookkeepers in our industry  around the ‘Catch 22' of having no experience. New bookkeepers, who have yet to get experience, often struggle to get their foot in the door. In this episode, Amy goes into detail and talks about the top three ways an inexperienced bookkeeper can start to get experience.

The key message of this episode is, “A bookkeeping career that will last always needs to built on a strong foundation!”

Podcast Info

Episode: #031

Series: General

Host: Amy Hooke

Guest speaker: None

Topic: How To Get Bookkeeping Clients When You Have No Experience

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Read transcript

Morning. Today I'm going to be talking specifically to the startups who are tuning in. And today's topic is how to get clients when you don't have any experience. If you're not a startup business, of course you can still listen in because I think that it's really important that in our industry we support incoming bookkeepers because they're the ones that are going to be the future of our industry as time goes by. Eventually those new startup bookkeepers that don't have an experience are going to be experienced bookkeepers. Now, I mean you might actually be thinking, and I don't really know what you think about this, but if there's a possibility that some of the more established bookkeepers see new bookkeepers entering the industry as a threat, I know that bookkeepers do tend to get offended with bookkeepers that have little experience. And I can understand why, like I can see the impact that it has on business owners and that kind of thing.

But also, I think that there is a sense of feeling threatened by bookkeepers who come in and they might be charging low rates, they might be presenting themselves as more competitive to the clients. And I guess it can be easy to feel that way, but just keeping things into perspective. And I can't actually back up where I have these numbers from. It's just what I've heard. I don't even know where to get these numbers from. So if anyone knows, please tell me. But from what I understand, there's 20,000 bookkeepers in Australia. I don't know if that's correct. I don't know if that's the number of BAS agents or if that's the number of bookkeepers. I have a feeling, I don't know. I actually heard somewhere that there's 8,000 registered BAS agents in Australia. Again, I don't even know where I heard these numbers.

So I'm going to have to do a little bit of homework and apologies for not doing that upfront. But, so let's say it is, you know, let's say it's 20,000. Just to give you a little bit of perspective there, like even if it was 100,000 this, you know, statistic is still going to work. So the fact is there is 6 million small businesses in Australia. So if there's 20,000 bookkeepers in Australia, then that means there's enough for us to have 300 clients each. Now, who wants 300 clients and pretty much nobody except for the people that already have that many clients. So you know, a lot of bookkeepers, on average, the bookkeepers that I work with would have 30 or 40 or 50 clients. I do have some that have kind of upward of a hundred or more.

And then on the other end of the scale, you've got a lot of bookkeepers that just have a handful, you know? And I guess it depends on the size of the client as well. You can be making $100,000 a year with five clients. It doesn't really necessarily mean anything. Whereas, I've spoken to people that have, you know, 150 clients and they're only just making 100,000 because they've got all these tiny little clients or quarterly clients. So, you know, there's not really necessarily a correlation there. So I guess I just want to set the context for this. We choose … As more established bookkeeper's we're here to support the newer bookkeeper's coming into the industry. And today I'm talking specifically to the startup bookkeepers, but I'm not talking about startup businesses. I guess there's an early stage of startup. So you've got experienced bookkeepers who are startups in their business, they're just starting a business.

But then you've got startup bookkeepers who haven't learned how to do bookkeeping yet. So these are people who have just finished studying. Maybe they're still studying. And so that's really who I'm talking to today. So I've been thinking, how do you get clients when you have no experience? And I've been asked this question quite a lot of times, and so I've come up with three, what I believe are the three options that you could do. So I'm going to just quickly go through those. So the first way to get clients, if you don't have any experience, is to lie. And obviously no one wants to really think about themselves lying in order to get a job. So I guess another way to lie without lying is to tell the truth, but leave out parts of the truth in my opinion, that's still lying. But you know, I don't know, I guess you'd call it some kind of deception or pretence.

And I guess that there is a certain level of that that is tolerated in the business world because people are always thinking, well, how am I supposed to get clients if I don't have any experience yet? And it really depends on what that person is actually offering. But bookkeeping is a very widely spread profession. It's not something that's actually unique. And so I don't necessarily agree. I don't necessarily agree. I don't think that lying to get clients when you don't have experience is a good idea. And this is all morality aside, like, I'm not talking about lying being wrong or anything like that. But what I'm actually talking about is, you potentially setting yourself up for failure. So if you lie or if you deceive a client, if you, you know, like I guess we … The socially acceptable way of saying it is fake it til you make it, which is to present yourself as having more experience than you actually do.

And so what's going to happen there is that when you take on the client is there's quite a good chance if you have no experience that you are going to make mistakes. And in my opinion, that's a lot of pressure on you. And you know, I guess that's one of the reasons why not telling the truth is something that's not really recommended because there's always consequences to it. And so if you need to be kind of covering up for a lack of experience, in my experience, it tends to come out in the end. Like, eventually somebody's going to find out that you don't really know what you're doing. Now, from a business owner's perspective, and I'll just give you, when I say a business owner, I mean me. So from my perspective as a business owner, in the past, I have hired people who have, I would let's say deceived me about the level of experience that they had.

So what they've done is they've presented their skill set in a certain way. And what has happened, what I've experienced in those situations is that when you try to get what you're specifically employing that person for, so you might ask them specific questions. And it's not at all to test that person or to try and catch them out. It's not even coming from a place of a lack of trust. But what it is is it's, you know, I have engaged this person to do a particular job and now I'm asking them to deliver on that. And so, I think what I've experienced is that you'll have a little bit of a season where you kind of feel like, it seems like the person's answering your questions, but then you sort of go away and you sort of reflect on what's actually happening.

And you start to realise over time that you're not actually getting what you engage that person to do. And so what can happen there … So I think what can happen is the person who doesn't really know what they're doing but presented themselves as, yes, I can do that. And I've had a number of people say, you know, I can do this. And they have not been able to do that. And to cover that up for a period of time. But eventually it does come out. And you know, I guess my own perspective as a business owner, what it looks like for a period of time, is it doesn't look exactly like this person doesn't actually know how to do what I'm asking them to do. What it looks like is this person is disinterested or they don't care or it can even come across like they have a bad attitude because I guess once you've deceived someone, once you've told somebody a lie about your level of experience, you know you're going to want to defend yourself against that.

And so you're going to look for different ways. Maybe not even consciously, you know, like you might have told someone a lie about your experience, but with, in your opinion, good intentions. And so what's going to happen is as that person starts to challenge you and ask you questions, as that person starts to realise, oh, maybe this person doesn't know what they're doing, they might challenge you a bit more and start to press you to find out the truth and to try and find out what's going on. So I think that it's very hard, if not impossible, to cover up, to saving a lie or lying to them about your skills for a long period of time. You might get away with it for a short amount of time, but in the long run it will come out into the open.

So it's going to come out when the accountant reviews the file, it's going to come out when the client asks you to deliver specific things that you can't deliver. It's going to come out when the client is looking at some reports and something doesn't look right or it's going to come out when you get so stuck on something and like maybe you end up charging them a lot more because you're trying to figure it out and all that sort of thing. So eventually it's going to come out, you know, to the client, but also like you're going to know. And so, you know, I think, I don't know, I've worked with a lot of bookkeepers and I've worked with them on what their highest values are and integrity is a very high value. I've seen that as a very consistent ends up in the top five or even top three of values for bookkeepers.

And so I think what happens is, I mean, just because someone values integrity, it doesn't mean they always operate in line with that. But if that's something that's important to you, there's going to be a clash between your values and the way that you're conducting yourself. So the first way to get a client when you don't have any experiences is to lie or to deceive the client. So directly telling a lie, I know how to do this or to pretend to deceive the person. So a lie is telling something that is untrue, whereas a deception is telling something that is true in a way that makes it look different to how it is. And so deception is a sneaky way of lying to the client and lying to yourself because you're actually telling the truth. You're just leaving bits and pieces out that would point to the fact that you don't actually know what you're doing.

So, I highly recommend against that approach. Thankfully, I've come up with another two. So hopefully that's going to be a little bit more helpful for you. So yeah, so that's the first one. How to get a client if you don't have any experience is to lie or deceive the client. The second option is to tell the truth. So when you meet a client, you could tell them, I don't actually have an experience. You could tell them that you've just finished studying and that you'd like to get experience. You could offer them at a discounted rate while you get your experience. But you've got to keep in mind that a business owner may not want to take that risk. So I guess the type of people that you might have an opportunity to do that with might be friends and family members. They may be willing to give you a go.

So yeah, there's definitely a possibility there of telling the truth that you don't actually have any experience, but you can speak to them about your other skills. You know, if you're a fast learner, then that's great. That kind of thing. Now, yeah, as I said, it really depends on the situation. And you're going to find that a lot of business owners are not going to want to hire someone with no experience. But if the rate is attractive enough, so I think a lot of people might actually go for it. And I think that comes back to something that I've talked about a lot before, which is, you know, if you don't have experience, don't expect to come out there and be charging $65 an hour, which is the industry average, $65 bucks an hour is the industry average. A lot of bookkeepers, most bookkeepers I work with, are charging $80 and these are people with 20 years experience.

So yeah. So I would not be charging that high of a rate. You know, if you're going to be presenting yourself as someone with no experience, you have to consider the rate, the amount of time that it might take you to do things. It could take you like maybe, I don't know, it could take you four times as long. I'm not saying that means you should charge $15 an hour, but what I'm saying is that you, at that point, you're an entry level person. So if you were going to go into paid employment then, but basically the way to work it out is, so what you want to do is you want to take the … Obviously, you can have a look at the awards, if you want to have a look at the clerical award, which is what bookkeeping would fall under if you were employed as a bookkeeper and what you would do is, so you look up the rate for the level of experience that you have.

So like let's say an entry level person, and I'm just guessing on this right now, but let's say it's $19 an hour. What you want to do is to convert that into a contractor rate. You want to multiply it by 1.36. All right? So that's $25 and 84 cents an hour. So you can pretty safely go with $26. So if you're an entry level person, that's just about … That's roughly how much you would be charging. If you're a freelance or a contractor or subcontracting bookkeeper, you'd be looking at that sort of rate. Now, some of you might be hearing that and cringing thinking, oh, I can't work for $25 an hour. But you have to keep in mind that if you don't have experience, then that's the market value of your skillset. Now, you may be highly qualified in something else. You might be a qualified, I don't know, brain surgeon who's worth, you know, $300 or $500 an hour.

But if you go and do bookkeeping and you have no experience, then as a contractor, you'd be looking around the $26 mark or if you're an entry level employee looking around the, I don't know, don't quote me on this, but the minimum wage is around $19 something, $22 or something. So, that's how you work it out. Now you might be wondering, where did I get that 1.36 by? So basically what that is, so when you're a part time employee, you want to add in times by 1.25 because, so let's say I'm just going to go with that $19 bucks an hour. So $19 an hour. If you're a casual, you've got to add on 25% so you times by 1.25 so that's $23 and 75 cents and then you have to add on your superannuation. So times .095, which is, and so that brings you to $26. Now, where I got the 1.36 from is that I've taken 1.25 and times that by 1.095 to add on the super.

That's 1.36875. So yeah, I guess technically you could say times by 1.37 if you want to be technical and ran that up. So that's what I would be doing. And you can do it the other way around as well. So let's say someone offers you $45 as a contractor, you divide by 1.37 and that works out. That's the equivalent of $32.80 as an employee. So this is going to be a really good formula for you to remember. If you can't remember it, just times by 1.25 and then times by 1.095 or the other way around, it doesn't really matter. You could … Yep. What you want to do is just gross up that rate or in the reverse, you want to divide a contractor rate. So if you're charging $65 an hour as a bookkeeper and you divide that by 1.37 that's $44 an hour and 44 cents as an employee.

Now, as an entry level person with no experience, you are never going to get paid $47 an hour plus super. It's just not going to happen at like as a permanent person. That wouldn't happen. And even if it did happen, you would feel under a lot of pressure because that would be a lot of expectation on you to perform at $47 an hour. Like you would be a senior, you would be a senior bookkeeper in a company for that, right? Like even borderlining on a financial controller. So you know, I'm talking about someone with a bachelor's degree. I'm talking about someone potentially even with a CA or a CPA, something like that. Someone with, you know, once you're getting up to that level, you've got someone who knows how to manage staff, they're completely autonomous, they're able to advise the business owner.

So that's what we're talking about there. So that's the second option. So you could, if you don't have any experience, you can lie and deceive the client or you can tell the truth. If you tell the truth, again, keep in mind the hourly rate that you're going to be asking for and make sure that it's in line with your skills and look for people who are going to be able to have someone in that position. Well, what you might think about is potentially seeing if you can find a client who actually has an in house accountant or an in house senior bookkeeper and start out in a clerical role. So that's number two. Number three, how to get clients when you have no experience is, and I don't know if you're going to like this one. Get experience first. Now, you might be thinking, but how do I get experience if I don't have experience and I can't get a client?

And I've said this before to a number of people and in my opinion, my very strong opinion, I think this is the best option and that is to get experience first as an employee. Now, I have people come back to me and they say, oh, but it's so hard to get a job as an employee in a BAS. You know, in a bookkeeping company, you know, working in a team of bookkeepers, it's really hard to get that employment. You know, there's not that many bookkeeping practices around of that size who are looking for somebody with no experience. And so my response to that is, you don't need to work for a bookkeeping company. So you can work for an accounting firm. That's another option. There's a lot more accounting firms out there. So that's where I got my first entry into accounting and into bookkeeping.

But before I got into that role, I did a traineeship. And so I did a traineeship in accounts payable. And so I worked in accounts payable for 12 months. Now, when I started in accounts payable on a trainee wage, I think I was getting paid at the time, I would have been on about, oh my gosh, I think it was 13,000. The starting salary was like 13,000 a year or something like that. So what's that? Yeah, $250 bucks a week. Thankfully they made a mistake. So when they actually told me the salary in the job interview, they told me it was $350 a week, which is about 17 grand or something like that, 18 grand. And so because they accidentally said that in the interview, I ended up actually getting paid that by company that did the traineeship or by the company that hired me to do the traineeship.

They said that's actually fine. And I think that worked out well because you know, I picked up the job very quickly. I was a fast learner and so I spent the first year of my career on like, hang on, what does that work out to? Let me just work that out. So 18,000. Oh my gosh. I got my calculator here. Divided by 52 divided by 38 hour week, $9 an hour, $9 and 10 cents an hour. And you know, that was, I mean, I don't know what the trainee wage was back then, but that was a legal wage. That wasn't a dodgy wage. So $9 an hour, that's what I started on. And that was in, I'd started my traineeship in 2000. All right, so that's like nearly 20 years ago. So $9 an hour. And you know, these days, I think if you did a traineeship, I'm assuming you'd be on about, I think trainee wages ran $17 an hour.

And again, what's that? If you gross that up, times 1.37. That's $23 an hour as a contractor. So that's just to give you a ballpark. Now, you might be thinking, oh, but you know, like, I mean, the whole reason you've got your cert for in the first place might have been because you want to start your own business. And because you want to be able to have the flexibility and the freedom to work from home, it's going to be quite difficult for you to get a job as an employee, let's say, accounts payable person because mostly they're onsite and all that kind of thing. But you know, this is probably going to be a little bit hard to hear, but that's reality. That's reality. When I started my business and I was charging my clients $80 to $100 dollars an hour, that was in 2014. So 2014. I have 14 years experience before I was charging that.

I don't know at what point I was charging the industry average, which is 65. 65 divided by 1.37, that's $47 an hour as an employee, that's still really high. So when I was an employee, I never got paid that high. I did have one job that I was on about $40 an hour as an employee, but that was an accounting job doing tax and that was actually above my head. Like I felt stressed in that job because yeah, that job wasn't a good fit. So let me see. So, the highest wage I got paid as an employee before I went into my own business was I reckon I was on about 70 grand. I was working as an assistant accountant to the CFO for public companies. So that's basically, it was like, it would have been the equivalent of a senior bookkeeper role.

So let's say 70,000 divided by 52 divided by 38. As an employee, that's $35 bucks an hour. So before I went into business for myself, I was on $35 an hour working for a public company. Like it was a really good job. And so $35 an hour as a contractor, that's $48 bucks. And that was roughly about, you know, because I did contracting work sort of on both sides of having that job. And that was about what I was on I reckon. I was on about $45 an hour as a contractor or something like that. Maybe the maximum amount I've ever charged as a contractor before I started my business was $50 an hour. But in general it was around, it was honestly as a subcontractor to an accounting firm doing bookkeeping, it was around the $40 an hour mark. So, but what I noticed is that from when I first started my career, you know, I started off on 13,000 a year or thankfully 18 because of a clerical error.

So you're going to … You have to start somewhere and I will never ever regret that one, that first year that I spent there on 18,000 a year. Now, once I finished the traineeship, I got offered a full time job in that company and I was on my salary then was 23,000 a year. So my salary had gone up. And then from there, I started looking for a new job. In fact, I got a job in an accounting firm in the city. And from there, my salary went up again to around 27,000 a year. From there, the kind of next leap was to about 40 and then the next leap was, you know, by then I was contracting, so sort on hourly rate. So I started, I think my first contracting hourly right through this accounting foam was $16 an hour, which is quite low.

But that went up quite quickly, because what happens is once you start getting the experience, you do start to pick things up. But in my … This isn't my opinion. I was about to say my opinion, but I've actually read this somewhere before. In order to be an expert in something, you need 10,000 hours and that's five years. So if you don't have five years experience, I don't think you have enough experience to be able to fully be competent in the role of a bookkeeper. You might be okay as an accounts clerk, like just dealing with the payables and things like that, but I don't think that you have the skillset you need to have a good understanding of double entry accounting. You need to understand the way that you're required to work with the accountants and you need to understand to some level what the accountant is wanting and what they're expecting.

And you need to have a good grasp on what is actually happening in the accounts, when you enter a transaction, when you click the green okay button on zero, you need to actually know what is happening behind the scenes. Where does that transaction actually end up? And you have to be very good at problem solving and you have to be very good at finding mistakes and reviewing your own work. Like that's something that would have increased my confidence in the past. And something … You do reach a point where you become able to check and verify the accuracy of your own work. And it's when you reach that level, that's the level that I think that you need to be at before you present yourself to a business owner, as you know, as a sole trader or a freelancer who is doing, offering a bookkeeping service. So you need to get experience first. And so a lot of people are going to say, you know, like, I don't want it to be an accounts payable clerk because it doesn't count towards my BAS agent hours.

And my response to that is, too bad. Like, do you know what I mean? Like once you've done the year there, you'll have a much better understanding of how that part of the accounts function works. I think it's actually good to learn the different accounting functions in isolation. I think it's good to learn accounts payable first and then to learn accounts receivable and then go into doing bank reconciliations and then, you know, stepping your way out. And so if that means that you need to be an employee first for a non accounting or bookkeeping company, that opens up your opportunities because when people were saying, but I can't get a job in a bookkeeping firm because no bookkeeping firms want inexperienced bookkeepers. Like, well, get a job for someone that's not a bookkeeper, like get a job for an ordinary company that has some kind of accounts function. Like learn how to record petty cash and reconcile the cash register and all these types of things that are going to enhance your skills.

You know, get some experience doing data entry and keying in invoices, if people even still do that these days. I don't know, like, you know, learn to use the software and learn to use receipt bank and those types of softwares if you have an opportunity. If you don't, it doesn't really matter because it's the foundational experience that you need to get first. And learning the software on the apps is just kind of the icing on the cake at the end. That's something that you can refine throughout your entire career. But if you have to spend a year as an employee for a non bookkeeping related company and it means that you have put off starting your BAS agent skills for another year, I don't think that's a bad thing. Now, you might think that's horrifying because it's another whole year. But the reality is so firstly, five years goes very fast and if you're willing to get the experience right at the beginning, you're going to set yourself up for a better future and your hourly rate will increase quickly.

Your job opportunities will increase, your confidence will be increased. Whereas, if you try to cut corners and you think … So running a business is a skill in and of itself. And I don't think it's wise to try to learn how to learn business skills when you don't even know how to do bookkeeping yet. If you don't have bookkeeping skills, then learning business skills at the same time is actually going to be counterproductive. And you know, I'm not saying that no one's ever done this before. And I'm sure there are people who are listening who are like, oh, Amy, you're wrong. I did. I did a cert for and I started my own business and I learned on the go because I'm a really fast learner. That's completely fine. And there will be cases like that. They will be people who are an exception to the rule.

But on the whole, I think that you're laying a much better foundation for your career and for your business in the future. And that's the reason why I don't work with startups. So I do work with a couple of people who are technically startups, but these people have 5 or 10 or 20 years bookkeeping experience. They're just new to business. And that's fine. So I tend to work more with the full up, the full up bookkeepers. So these are the ones that, you know, they've sort of got about five or more years experience and then their businesses have become full. Or I work with bookkeepers who already have practices established and they need to, you know, they're trying to increase their income, they're trying to stabilise their income, they're looking at hiring more staff or maybe re upskilling themselves or re positioning themselves as a consultant or something like that.

So I call those people the move ups and the startups. I really tend to … I work with a very, very small selection of startups, but they always … If I do take on a startup business as a client, it's always someone who already knows how to do bookkeeping. So for me, someone who doesn't know how to do bookkeeping yet, is not an ideal client. Like basically, I mean, my value proposition is that I help savvy bookkeepers to identify, find and engage ideal clients online. So the operative word there, being savvy as in they're already savvy. They're already offering a high quality bookkeeping service. Because for me, what I don't want to do is I don't want to help someone who doesn't know what they're doing to become successful. I want that person to go get experience before they come and do that.

And so, I think that's the third option. In my opinion, that is the best option. It's not going to be the best option for everybody, but it's definitely better than option one. You should never lie or deceive a client about your skillset because it will bite you in the butt. It will, it can cause damage to that business owners business. It can cause damage to your reputation. And also it's not good for your soul, to be untruthful and to deceive somebody in order to get some work, it's a recipe for disaster. And so that just leaves you with the two options. You can either tell the truth and look for people who are sympathetic to that or you can humble yourself and become an employee for a season, just for a season. And you can just set yourself a goal.

I'm going to do this for one year. And then from there you have experience. You can then present yourself truthfully to somebody as, I'm a qualified accounts payable person. And you can move from there and it does move very quickly. You know, things multiply and multiply from there, but you have to be willing to put the foundation in. So that's what it really comes down to. So hopefully that's been helpful for you. If you're a starting up bookkeeper who doesn't have any experience yet and wondering how to get work. And hopefully it's been insightful for the more experienced bookkeepers who are on the other side of the fence. You know, we're the ones creating the job in a lot of these scenarios. And I know, like when you're a startup business or when you're growing and establishing bookkeeping business, it's not really wise to hire someone who has no experience if you don't have capacity.

And so, obviously that makes it harder for the people that don't have experience. And that's why it is so critical for these people to go and get entry level jobs because … Oops. I knocked my modem over. So basically if you, you know, because if you apply for entry level jobs, what you're doing is you're putting yourself into a company that is properly established to manage an entry level person. You're going to be mentored. If you go into a job like that, you're going to have a senior person over you who's managing your work and giving you that support and mentorship that you actually need. Whereas, if you go … And that's why I say to a lot of bookkeepers not to hire someone that doesn't have any experience because even though they can get a lower hourly rate, often bookkeepers at that stage, you know, if it's your first person and you're trying to hire someone to free up your time, then that's not going to happen.

Because having someone who doesn't know what they're doing at all or has very little experience like that, there's a lot of work that goes into training and developing that person. So I think it's always better for that person to come and to work in an established business that has the resources to be able to develop and train a person who doesn't yet have experience. So yeah, hopefully I'll hear from some people about this topic, whether you agree with me or disagree with me or what I've said upsets you or makes you feel happy. Or I don't know, maybe you go out there and you actually get a job and come back and let me know, you know, whatever it is. I'd love to hear back from you on this topic because I do think that it's a really important topic and obviously I have given a strong opinion that some people might not agree with and that's fine.

So I think in a couple of weeks I might actually talk about resumes because being on the hiring end, having gone through and screened a lot of bookkeepers resumes, I can say that there seems to be a lack of skill in the resume writing department. And I don't know that a bad resume is always a reflection of a bad skillset, just means the person's not good at putting together a resume. So that could be a good flow on topics. I'll let you know, obviously you'll find out when I do that, but I will do some more on this topic because I do think it's important. And I'm not going to just say to you, you know, hey, a best option is to go get experience first as an employee, and then not kind of back that up with some kind of support. So anyway, I will see you very soon and thanks for listening again. Bye.