How to start your own accounting firm

Setting out on your own to start a business is a big step, and if you’ve decided to finally take the leap and start your own accounting firm, here are some of the key factors you’ll need to know. This article will look at how to start your own accounting firm by covering the following areas:

• Understand your firm’s offering
• Know your day to day tasks
• Get qualified, insured and legally up to speed
• Set up the business
• Find clients

Like starting any business, you first have to do the groundwork. What is your business purpose, target market and goal? 

There’s nothing wrong with offering general accounting services to a range of clients, but it may be difficult to stand out from the competition.

What might make you different is if you choose a focus in a particular industry or trade, so that you can gain a reputation for providing a specialist service. Not only will this be better for your clients, in that you can offer specific services for them, but you’ll develop your skills and learn new ways to help businesses in this sector.

You could also make your ‘difference’ from other businesses the services you offer. Perhaps you have a lot of experience with Corporation Tax or Inheritance Tax, and you can use the specialist service to your advantage when creating your firm and its marketing. 

You’ll have a myriad of things to look after when starting your own accounting firm, and it’s important you are prepared to know where you’ll be spending your time. In terms of accounting tasks for your day-to-day client work, you’ll be:

• Preparing financial statements, business plans, and budget reports
• Producing accounts
• Auditing
• Managing clients’ spending and costs
• Filing tax returns and giving advice
• Forecasting profits and performance
• Supporting businesses in financial difficulty
• Investigating fraud, usually referred to as forensic accounting

But you’ll also be managing a business which will include:

• Preparing financial documents based on your own business performance
• Revisiting performance goals 
• Looking at streamlining your operations and processes
• Doing marketing activity
• Filling your business funnel
• Creating branding
• Doing your own tax admin

Although you don’t need a degree to be an accountant, there are a range of qualifications to consider. The professional bodies you should look into for starting your own firm may be:

• AAT (Association of Accounting Technicians): these qualifications are the minimum you need to start a general career in accountancy.
• ACCA (Association of Chartered Certified Accountants): these qualifications let you become a qualified chartered accountant, meaning you can give the full range of accountancy services.
• Chartered Institute of Management Accountants
• Institute of Chartered Accountants in England and Wales
• Association of International Accountants

Gaining experience is a big part of what makes you ‘qualified’ to run your own firm, so some knowledge of how an accountancy firm runs is helpful. 

It’s a requirement that anyone providing accountancy services is registered with, and monitored by a recognised supervisory body, such as the ones mentioned above. These bodies may need you to hold a practising certificate before starting your own firm.

You should always keep up to date with industry standards and regulations. This includes data protection regulations (because you’ll be keeping information on your clients) and anti-money laundering regulations.

When you bring in some clients, don’t forget you’ll need formal authorisation from HMRC for each client so you can deal with HMRC on their behalf.

When starting your own business it’s important to protect yourself and your business’s future with appropriate insurances.

As a business that will deal with figures, calculations and legal tax requirements, your priority should be professional indemnity insurance. This is a policy that will pay for any claims if you make a mistake, breach confidentiality or are accused of professional negligence.

Other insurances you may need to consider are:

• Public liability insurance, if you deal with clients in person or work from an office. This covers you if someone is injured or their property is damaged in their dealing with your business.
• Employers liability insurance, if you decide to take on an employee after starting the firm.
• Building insurance, which will cover your premises like an office, or look into your own home insurance policy if you are operating from home to make sure business items such as laptops etc, are covered.

The first step to take in setting up the business is to choose your structure. Will you be a sole trader, a limited company or set up a partnership? 

For an accountancy firm, a limited company may give off a more professional image, as well as giving you limited liability for any debt associated with running the business. You’ll need to register with HMRC for your tax management and Companies House. Choose the software and tools you’ll need to start working and you’re almost ready.

You may want to create a business plan so that you have milestones to work through to grow the business from the ground up, and you can find more detail about how to do that here.

Now you need to find clients. You know what makes your business different to others, and you may have done some audience research for your business plan. Here are some simple ways to draw leads into your pipeline:

• Offers: give vouchers for a free half-hour of your time for referrals or new clients.
• Use digital marketing techniques
• Attending events in your chosen specialist industry
• Use offline marketing such as flyers, business cards or newspaper and radio ads.

You can save your practice time on manual admin and help your new clients keep organised records with Countingup’s free accounting software. It’s built specifically to help accountants manage their small business clients. Not only is it a cost-effective platform for them, but it’s simple for your firm to work from too.

The Countingup business current account and accounting app automates time-consuming bookkeeping admin for your clients so they can focus on running their business — and send you accurate, structured data to work with. With instant invoicing, automatic expense categorisation and cash flow insights, your clients will be able to confidently keep accurate daily bookkeeping records.

Countingup’s accounting software is MTD-compatible and full of features for you to review and manage client accounts efficiently, with direct access to their real-time organised data. Find out more here.