There is a lot to consider for anyone looking to start an accounting practice. Decisions will need to be made on everything from the cost of rent to how many workers to hire and what computer software to utilize. These reasons alone are why it pays to make sure the numbers add up ahead of time and—if you want to be a good accountant—it’s a good way to practice.
Starting an accounting practice will require a good business plan, abiding by all regulations, and finding the right people and tools. With these aspects taken care of, any new accounting practice can be assured of a strong foundation for their business.
So, if starting an accounting practice still sounds appealing to you, be sure to stick around. We will discuss everything you need to know to get your own accounting firm up and running in no time. So bust out your green eyeshades and get ready to learn everything you need to know to start your own accounting business.
Making a Business Plan
Coming up with a good business plan is a good first step towards building a successful accounting practice. This business plan should touch on all aspects of the business and provide a good accounting of things such as business purpose, expected fixed costs, and target consumers. Don’t rush through putting together a thorough business plan, as this will be the roadmap that guides any accounting practice through its first years of existence.
Also, unless you have access to capital outside of traditional sources, a good business plan will be a requirement for funding from sources such as banks.
Passing Regulatory Hurdles
Just as with starting almost any business, there are several regulations that any new accounting firm must comply with. These can include aspects such as making sure everything is squared away with the IRS by obtaining an EIN (Employer Identification Number) and Tax ID number.
In addition to the above considerations, the following will need to be accomplished before opening:
Getting Proper Insurance
Besides policies one may be more familiar with, such as disability or life insurance, CPA insurance is also available from most reputable providers. If the expense is a concern, check with your local accounting organizations to see if discounts are available for members.
Choose a Style of Corporate Governance
Will you be an LLC, an S-Corp, or something else? In some states, sole proprietors won’t have to worry about registering their business. However, forming even a basic LLC is a good way to define the enterprise and hopefully protect it from unnecessary risks and litigation.
Get a Banking Partner
Having access to a line of credit will be essential for any business’s early days. When in doubt, try a local provider and make sure your business plan is up to muster.
Finding the Right People
Finding the right staff to fill out your accounting practice will likely require more than a little patience. First, you will need to identify your firm’s needs, a good business plan can be a big help here, especially in terms of expertise that you will be looking for in future workers.
For example, will the firm be specializing in corporate accounting? In this case, it would make sense to have experts for each area of corporate accounting such as tax specialists, payroll experts, and more.
Using the Right Tools
These days, most of the tools required for a quality accounting practice will be pieces of computer software. Choosing the right software is thus very important, as it will be what is used for almost all computations.
Besides practical accounting software, accounting practice management software can be a gamechanger for any firm. Such software can help automate processes and help both clients and accountants track work and meet deadlines. Good accounting management software will be able to help with tasks such as document intake and organization, tax preparation, and cloud-based project management.
While finding software that has all of the capabilities you require may take some searching, in the end, the increased efficiency will be well worth it.
Getting an Accounting Practice Started Right!
And there you have it, the basics that anyone needs to know before they start an accounting practice for themselves. There is a lot to consider, from making sure your firm has a suitable regulatory status and quality business plan to finding the right people and software that will set your practice up for success.
Of course, there is a lot to cover when starting your own accounting business, so please don’t hesitate to reach out with any questions or clarifications you may have. We hope you’ve enjoyed reading more about how to start an accounting firm and that you’ve learned something new along the way. As always, thank you for reading!