Whether you’ve been working in an accounting department for years or are a finance major fresh out of college, the thought of becoming your boss may have crossed your mind.
Starting an accounting firm might serve you well, given the importance of accounting and the rate at which businesses hire agencies to help streamline their financial operations. In addition to this, starting an accounting business will allow you to choose your professional path and experience the freedom and control of working for yourself.
Of course, the method demands a lot of study, labor, compliance with tax codes, and, let’s not forget, knowing how to sustain your business over the long term. Thus, you’ll want to be meticulous and well-informed when making selections and starting an accounting business.
To that end, we’ve created this helpful guide on how to start your own accounting business:
- Choose a business name.
Choosing a business name may seem simple, but it has a significant impact. Clients will associate it with your identity, appearing on all marketing materials and messages you create. Some business owners decide to use their full name as the company name. They opt to be a little more inventive and select a trading name. We advise conducting a corporate name search to ensure another accounting company is not already using the business name.
- Make a budget
Accountants are accustomed to thinking about budgets as it is second nature to them. However, sticking to it is more complex. For this purpose, you must understand the expenses of starting an accounting firm before creating a budget. Whether you want to operate from home or rent office space will depend on your expected income and the expense of starting your accounting business. According to Build Your Firm, Inc., launching a new company that makes $150,000 will typically cost more than $50,000. However, a brilliant, driven accountant can establish a CPA practice for much less money. You can modify your business strategy to save money as your company expands.
- Create a business plan
A business plan To launch an accounting firm, you need a setup. In terms of finances, you must set aside money for soft marketing and business registration. It may seem simple to manage one client, but managing them becomes more crucial as you expand or acquire more clients. You will receive daily and weekly reports from various firms. Therefore, you must have a sound business plan. The following are some fundamental subjects that your business strategy ought to cover:
- Ongoing and one-time expenses
- Target market
- How will you be providing your accounting services?
- Pricing strategy
- Get an Employer Identification Number
Employer identification numbers (EIN), also referred to as federal tax ID numbers, are used to identify your business for tax reporting and filing purposes. Companies that hire people or do corporate or partnership business must acquire an EIN. Thus, ensure you already have an EIN before getting ahead in your game.
- Establish a business bank account
Although you already know this as an accountant, we feel it’s important to reiterate the need to separate personal and corporate finances for tax and legal reasons. An accounting firm should have all the necessary information to open a business bank account and lines of credit once it has registered with the state and gotten its EIN. LLCs and organizations must keep their personal and commercial financial assets separate to maintain the “corporate veil” that shields company owners from the company’s obligations.
- Select the services you will offer
Since there are few tangible things available to accountants, this process will be relatively simple. Some services that an accounting firm often provides include:
- Bookkeeping: This service entails the creation of bills, accounts receivable, payable, payroll, monthly and quarterly taxes, and general ledger entries.
- Accounting: Creating financial statements, local, federal, and state tax returns, as well as budgets. It also involves putting up computerized accounting systems, reviewing services, keeping track of assets, handling fraud difficulties a company faces, and auditing IT systems.
- Consulting: Offering wise counsel on financial strategy, risk management, business plan, and economic and regulatory changes.
- Get accounting software.
You’ll need to learn how to use fundamental accounting software. You can use Quickbooks or any other accounting program that complies with accounting requirements. You can either learn it online or through YouTube. Many tutorials are freely accessible online. Even Coursera and Udemy provide a variety of online programs on accounting software tutorials.
Most accounting professionals advise purchasing cloud-based accounting software if they are working with businesses and clients. Software of this kind facilitates accounting procedures and aids in proper oversight.
- Protect your business with insurance
Creating a Legal Business Entity (such as an LLP, LLC, PLLC, or PC) reduces an owner’s liability for business debts and lawsuits. Still, it does not shield personal assets from claims against the company owner due to that person’s activities. Additional security and peace of mind can be obtained through insurance coverage. You can get assistance in determining the kinds of insurance plans that would be a good fit from an experienced and trustworthy insurance agent who is familiar with the requirements of companies in the financial services sector. They may talk about the following laws:
- Professional Liability Insurance
- Business Owner’s Policy (BOP)
- Data Breach Coverage
- Get online
How do you anticipate generating new leads and turning them into customers if your accounting business cannot be found online? Yes, you may not need to advertise your firm if you plan to practice accounting part-time and already have a waiting list of customers. Those are unusual situations; most accounting firms require a steady stream of fresh leads. Whether you own a tiny family business or a big corporation, marketing is crucial for bringing in customers and expanding your clientele. A website serves as a Marketing Strategy in the modern corporate world. It’s a strategy to enhance your brand’s reputation and boost social proof among your target market.
Opening and running a successful accounting business requires effort, commitment, and perseverance. While there’s massive scope to expand and grow, you must follow the correct path! But by following the steps above, you can do it right and reap the rewards. You can help other organizations and people take control of their finances with your services. Just be patient and stay true to your business, even if it grows slowly.