Your guide to setting up an accounting practice

Setting up an accounting practice may have been a dream of yours when you were studying, and gaining your work experience. How do you make it a reality? This article will look at how you can begin setting up an accounting practice by covering the following areas:

• Do the groundwork
• Become qualified
• Stay compliant
• Find appropriate insurance
• Register the business
• Marketing to find clients

When starting any business you first have to understand what is your business purpose, target market and what are your goals. This is to find out if your business is viable and sustainable in the current market.

Research if there is demand in your local area for accounting services, by looking at directories or online providers that offer similar services to what you want to do. You’ll want to check their pricing too so that you can set your own fees to be competitive.

You might choose to specialise in a particular industry or trade, so that you can gain a reputation for providing a specialist service and stand out from the crowd of other accounting firms. Not only will this be better for your clients, in that you can offer specific services for them, but you’ll develop your skills in this area too.

Your unique selling point could also be the services you offer. Perhaps you have a lot of experience with Corporation Tax or Inheritance Tax, and you can use this specialist service to your advantage when gaining clients for your practice. 

Create a business plan so that you have all the background information compiled somewhere, with milestones you’ve recorded to work toward. You can find more detail about how to do that here.

To become a qualified accountant you should either hold a degree, or have gone through a period of training in an authorised accountancy practice. Training usually takes between three and five years, and you will have taken exams through a professional body as well as gaining practical experience in dealing with accounting activities. The firm who trained you will usually pay for your exams, as well as paying you as an employee while you study and complete any courses. 

Once you gain qualifications, and become a member of a professional accountancy body, then you will be able to apply to a professional board for a practicing certificate so that you can set up a public practice. Once you have the practicing certificate you will be able to use the title Chartered or Certified which will lend a more professional look to your new firm. 

Certain types of accounting work, such as auditing or probate work, will require a separate qualification. Always do your research to ensure you are qualified and legally able to carry out this work before you offer it as a service.

There is a range of qualifications and professional bodies you should look into for starting your own practice, such as:

• 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

It’s a requirement that anyone providing accountancy services is registered with a recognised supervisory body, such as the ones mentioned above. The firm will be monitored by the body and also you’ll have to comply with their standards.

You should always keep abreast of changes in industry standards and professional body regulations. This includes data protection regulations (as you’ll be keeping information about your clients) and anti-money laundering laws.

As a business that will deal with figures, calculations and legal tax requirements, your priority should be professional indemnity insurance. Professional indemnity policies will cover any claims made against you if you make a financial mistake or are accused of professional negligence. There may be specialised accounting insurance out there if you do some research to see what policy fits your practice the best.

Other types of insurance you may need to consider are:

• Public liability insurance, if you deal with clients in person or work from an office. This covers the firm if someone is injured or their property is damaged in their dealing with your business.
• Employers liability insurance is a legal requirement if you take on an employee after starting the practice.
• 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.

As an accountant you may already be familiar with choosing the structure of a business. 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 the business takes on. You’ll need to register with Companies House and with HMRC for your tax management. 

Now choose the software and equipment you’ll need to start working and you’re almost ready.

Now you need to find some clients for your practice. Here are some ways you can market your business to draw leads into your pipeline:

• Offer vouchers for a free half-hour of your time for referrals or new clients.
• Use digital marketing techniques such as local SEO, and content marketing.
• 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 you manage small business clients. Not only is it a cost-effective platform for them, but it’s simple for your practice to work from too.

The 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.