Choosing to start your accounting firm is a big decision, and it can seem daunting when you don’t know where to start. However, establishing even the most minor practices is not something that should be taken lightly.
Thus, it is essential to understand the basics of how to start your accounting practice.
Requirements for setting up an accounting firm
- The right qualifications
While an accountant doesn’t need to be qualified, there is no doubt that qualifications can give a boost to your accounting career.
After getting the AAT qualification, that is the foundation qualification; you can get accredited from any of these globally known institutes:
- Chartered Institute of Management Accountants (CIMA)
- Association of Chartered Certified Accountants (ACCA)
- The Institute of Chartered Accountants in England and Wales (ICAEW)
- Institute of Financial Accountants (IFA)
Getting qualification is not enough to engage in public practice. For that, you need a practising certificate. Each accounting body’s requirement is different. You must contact your respective accounting body before accepting any client.
- A business setup
The first step of setting up your business is to develop a creative brand name and logo to create a good impression in the audience’s mind. It will also help if you make a business plan that will guide you by giving you an overview of your firm.
Then, after deciding which legal structure is best for you, you need to get your accounting practice registered with either HMRC or an approved agent of Companies house.
- Legal requirement
HMRC must give you formal permission to interact with them on your client’s behalf. For each form of agent authorisation, you must obtain a reference number or an agent code.
In addition, you also need to fully comply with data protection regulations as you are responsible for dealing with confidential client information.
You may be an expert in dealing with complex tax calculations, but mistakes and mishaps can occur. If things go wrong, then accountancy insurances can come to your rescue.
One insurance that you must have is professional indemnity insurance. It can protect you against any unintended violation of confidentiality or copyright, loss of files or data, professional negligence, and more.
Some other insurance covers that you can consider are:
- Public liability insurance:
It protects you if someone is hurt or property is harmed as a result of your accounting practice.
- Employer liability insurance:
You need to have this insurance if you employ individuals. It will protect your business if an employee suffers an injury while working at your firm.
- Legal expenses insurance:
It covers you in case your accounting firm has incurred legal fees.
- Business and office equipment insurance:-
It covers you if something goes wrong with the equipment you rely on to run your business.
- A good marketing strategy
There is no use in setting up your accounting practice if your potential customers are not even aware of your offer services.
You must communicate your unique selling point (USP) to your target audience to understand how you are different from your competitors and why they should choose you.
To successfully run an accountancy firm, you need to attract customers and win them over. You can use traditional as well as online marketing strategies so that you can easily reach out to potential clients.
Experience is not a requirement to set up your accounting firm. But if you have experience of a few years in an existing firm, then you can quickly get well-versed in the systems and processes required to run your own accounting practice.
Things to keep in mind while starting your accounting firm
- Examine the competition in your area to see how many other accounting firms are already operating. Getting an idea of the services that the competitors’ firms provide and the fees they charge will help you set a standard for your firm.
- Determining what services your potential clients require will help you to identify and promote the features that set your practice apart from the competition. Offering something different will help you to stand out from your competitors.
If you provide some specialist service to your clients, they will feel satisfied with your services, and they may be more likely to refer you to their network.
- You have to develop a fixed and consistent pricing structure to make a profit. You can either choose an hourly fee structure or a fixed fee structure depending on the services that you offer, location, your level of expertise and the fee structure of your competitors.
- It would help if you focused on providing exceptional services to your clients. This will add value to your firm and will help you in the long run.
For example, 123Financials is an accounting firm that believes in going the extra mile to help its clients.
How much can you earn by setting up an accounting firm?
The money that you can earn by starting your accounting practice depends on various factors like:
- The services that you provide
- Whether you take the help of staff or work on your own
- Your qualifications and experience
- The time and efforts that you put in
- The area in which you have set up your firm
- The type of clients that you get
Once you set up your accounting practice, your sole focus should be on serving your customers better and improving your techniques. The key to customer satisfaction is cost-effective pricing, exceptional customer service and excellent work ethics.
Setting up an accounting firm is full of challenges, but you can quickly rise to the top in this field with dedication and hard work.