Accountancy services
Type of Business
How to Start an Accountancy Services Firm
With small businesses increasingly needing support for critical finance functions like bookkeeping, payroll, taxes, and advisory services, starting an accountancy services firm presents a sizable market opportunity. Here are key steps to launch your own accountancy practice.
Define Your Niche
Rather than be a generalist, focus your practice on a specific industry like healthcare, real estate, or technology. Build out capabilities to comprehensively understand and cater to niche-specific accounting needs. Becoming a specialist boosts credibility.
Build Your Qualifications
At minimum, an accounting certification like Certified Public Accountant (CPA) or Certified Management Accountant (CMA) helps establish credentials. Additional certifications in taxation or auditing also demonstrate comprehensive expertise. Gaining prior experience at an accountancy firm is highly valuable before going solo.
Choose a Business Structure
Common accountancy firm structures include sole proprietorship, partnership, Limited Liability Company (LLC) and corporation. Consult accountants and attorneys to select a structure aligning to your business vision and tax considerations.
Register Your Business
Once you select a structure, complete all legal paperwork for formation and registration. Also obtain necessary permits, licenses and insurance for legally running operations. Accountancy operations need particular professional insurance coverage.
Define Service Offerings
Build out the mix of accountancy services you will provide clients. Standard offerings include bookkeeping, payroll, compliance, financial reporting, advisory and consulting. You may also add specialized services over time like fraud examination.
Invest in Accounting Software
Robust accounting software centralizes client financial data and automates workflows. Popular options include QuickBooks Online, Xero or FreshBooks. The upfront software investment pays off with smoother operations. Integrate with other tools like payroll software.
Market Your Firm
Actively promote your services through both offline and digital marketing across platforms like LinkedIn, industry events, referrals and your own website. Content marketing also helps educate potential clients and establish thought leadership.
The accountancy space has strong demand, especially due to increasing financial compliance. Starting with the right strategic plan and infrastructure provides a solid foundation for building a thriving advisory practice over the long-term.
Running an Accountancy Firm: Best Practices and Tips
Operating an accountancy practice requires both financial acumen as well as shrewd business management. Here are some guidelines on key things accountancy firm owners should do, as well as avoid.
Do Focus on Specializations
Rather than offer a vast array of general services, narrow your practice to specific areas of expertise like taxation, mergers and acquisitions, forensic accounting or payroll. Specialist skills make firms more competitive.
Do Invest in Technology
From cloud accounting platforms to payroll systems, workflow automation through software is critical for operational efficiency. Technology also allows remote, scalable delivery of services.
Do Create Standardized Processes
Document procedures for your most common services to ensure consistency in execution and quality control. Well-defined workflows raise productivity.
Do Get Accredited
Gaining accreditations like PCAOB or CPAB audit certifications boosts the credibility and compliance standing of your practice. Professional designations signal expertise.
Do Expand Services Strategically
While specialization is good, expand carefully into complementary services like advisory and consulting to provide clients holistic support as they scale.
Do Focus on Client Relationships
Accountancy thrives on long relationships of trust and reliability. Spend time understanding client needs beyond numbers to become a trusted advisor.
Don’t Neglect Marketing
Actively market services to SMEs, startups and enterprises through digital promotion, content creation and networking instead of relying solely on word-of-mouth.
Don't Underestimate Startup Costs
Factor in costs of office space, supplies, software, staffing and insurance when budgeting. Underfunding early on causes instability.
Don't Take Clients Lightly
While revenue is crucial, be selective about clients to avoid problematic ones that demand excessive time and energy for little return.
Don't Stray from Your Expertise
While exploring new offerings, never provide services that you lack experience or credentials in even if clients request it. Ethical practices preserve trust.
Applying these tips around client service, operations, technology adoption and business development helps accountancy firms sustain profitability and progress. Disciplined execution is key.
Start-up capital requirements for an accountancy services business:
To start an accountancy services firm, you need an initial capital investment of around $10,000 to $15,000. This covers costs of obtaining necessary licensing and certifications like a CPA license, advanced accounting courses, accounting software, laptops/computers, office supplies and furnishings, marketing material, website development, and working capital to cover day-to-day operations for the first 3-6 months. You can operate from a small rented office space or even home office in the initial years to keep rental overheads low. The key is gaining accreditations to provide specialized accounting services. With relevant experience and qualifications, you can start gaining clients through referrals and networking events. Building expertise and reputation allows you to charge competitive monthly retainers and recover your start-up capital within the first year. Invest more capital once you start hiring additional accountants for expansion to fund their salaries and benefits.
Some hints on potential income and suitability of an accountancy services business:
Some hints on potential income and suitability of an accountancy services business:
Potential Income
- Income can vary widely depending on your qualifications, experience, client base, and whether you work independently or for an accounting firm. Newly qualified accountants may earn $30,000-50,000, while experienced partners at large firms can earn over $500,000.
Good Candidates
- Accountants generally need strong math, analytical, and communication skills. Attention to detail is also important when preparing financial statements and tax forms.- An accounting background is required - at minimum a bachelor's degree, but often a master's degree or CPA certification. Some on-the-job training may also be required to gain experience.- Independent accountants need strong marketing and client management abilities on top of accounting skills in order to establish a solid clientele. Working for an existing firm first can help build these skills.- Comfort working long hours, especially during tax seasons, is crucial. Being well-organized and able to handle deadlines is essential too.
These points help provide some expectations around running an independent accountancy practice or working as an accountant.