Wondering how to start an accounting business but don’t know where to start? We’ve got you covered.
Whether you’re starting from scratch or you have experience working for someone else under your belt, this guide covers the basics – from qualifications to how to market your business.
Making the leap to starting an accounting firm yourself can be rewarding, but there are seven things you need to think about first. Check them out below.
The National Careers Service says that private practice accountants usually have the following day-to-day duties:
You’ll be working with numbers day in and day out, so being very numerically and analytically skilled is a natural prerequisite for the role.
It depends on factors like whether you’re working on your own or taking on staff, your qualifications and experience, the region you’re working in, the hours you work, and how much time and energy you’ve put into building up a client base.
Depending on your experience, your clients, and how smoothly you work, as a sole practitioner you might expect to earn between £50,000 and £100,000 a year.
If you’re starting from scratch, you don’t need a degree to become an accountant, although it can give you useful theoretical knowledge. There’s a range of vocational qualifications you can take, and in fact people who have studied at university often need to take these too.
The professional bodies to consider for your qualifications include:
There are also the ICAEW, CIMA, and AIA qualifications you could explore on your way to starting your business.
The most important qualification, though, is experience. While it’s difficult to get experience if you’re training, knowledge of how to run an accountancy firm will help you hit the ground running.
If you have the qualifications and a few years’ experience in an existing firm, you should have a good understanding of the systems and methodologies needed to run your own business.
It’s a requirement that any person or any firm providing accountancy services is registered with – and monitored by – a recognised supervisory body. Supervisory authorities include the bodies mentioned above (AAT, ACCA, CIMA). These bodies may require you to hold a practising certificate when running your own business.
You also need to have formal authorisation from HMRC to deal with them on your client’s behalf – you have to get an agent code or reference number for each type of agent authorisation.
You should understand and fully comply with industry standard guidelines and regulations. This includes data protection regulations (because you’re going to be keeping information on your clients) and anti-money laundering regulations (to follow these, you’ll need to register with a supervisory authority).
Your clients rely on you to be precise with your figures and calculations, but mistakes and accidents can happen.
Professional indemnity insurance is likely to be your key cover. It’s an important consideration for any business that gives professional advice.
For accountants, it can cover mistakes such as professional negligence, unintentional breaches of copyright or confidentiality, loss of documents or data, and defamation or libel.
Other covers to think about are:
If you’re an accountant already, it’s likely you’re versed in what you need to do when setting up a business. But remember, there are a number of things to do when starting any new company. These include:
Are you going to be like the rest of them or are you going to offer something different?
There isn’t necessarily anything wrong with being a generalist accountant and offering your services to a range of clients. But this might make it more difficult to stand out from a crowd all doing the same thing.
Your ‘difference’ might be a specialist focus. For example, what if you choose to focus on providing services to a particular trade, like doctors, dentists or vets? Then you can build a reputation for providing a niche, specialist service, and clients might be more inclined to recommend you to their network.
Another differentiator could also be the type of service you’re offering, like specifically offering bookkeeping or tax services. And, with tax, you can drill down even further, like explaining that you’re a Capital Gains Tax, VAT, Inheritance Tax planning, or investigations specialist in your marketing.
In previous years, an accounting firm might rely on a stable set of core clients, but it’s easier than ever for people to shop around and switch accountants.
This is both a challenge and an opportunity – it means you can’t always rely on repeat business, but as a startup, you could take a slice of the market by being proactive.
Finding your niche, as above, will be a start. Then you can target your marketing more effectively by having a better understanding of the clients you’re trying to win.
These are some of the things you can do to find clients:
Setting up your own accountancy business will take time, effort, and dedication, but there’s a huge opportunity for nimble firms who offer something different.
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