accounting firm
26-Jun-2021 By - team

To launch an accounting firm, you’ll need a little more than a knack for numbers. From understanding your target market, setting business goals and ensuring the proper legal documents are in place, we’ve outlined the best steps to take for a successful venture.

What is an accounting business?

An accounting business takes care of other people’s finances, whether they be business or personal. Accountants are trained to summarise, analyse, and report annual income and expenses to help companies track and manage their money effectively.

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Equip yourself with crucial industry skills

It takes a specific type of person to become a highly-skilled accountant. You’ll need to summarise and analyse financial data effectively while creating comprehensive and user-friendly reports for clients. While you will need to undergo training to become an accountant, you’ll also need to possess these additional skills:

  • Strong writing skills
  • Clear communication
  • Critical thinking
  • Systems analysis
  • Time management
  • Organisational skills
  • Sharp eye for detail

Enroll in the suitable courses and get the best qualifications

The very first step in opening your own accounting business is to make sure you’re qualified for the job. Here’s a quick overview of the capabilities you’ll need…

Qualify in accounting

The first step is to gain a diploma, bachelor’s or master’s degree in accounting, allowing you to apply for your practising licence.

A bachelor degree is the preferred option, as this will allow you to apply for entry to Australia’s top professional accounting bodies.

A Bachelor in Accounting takes between 3 or 4 years of full-time study to complete and will cost around $11,000 per year, depending on the institution that you choose. To make your life a little easier, there are numerous online accounting courses that you can complete from the comfort of your own home.

If you already have an undergraduate degree under your belt, you could opt for the 2-year Master of Professional Accounting which will set you back around $14,000 per year of full-time study.

Become a member of a professional accounting body

The Institute of Public Accountants (IPA), Chartered Accountants Australia and New Zealand (CA ANZ), and CPA Australia regulates the Australian accounting industry. With a Diploma or an Advanced Diploma of Accounting, you can apply for entry to the IPA. For CPA and CA ANZ accreditation, you will need a Bachelor of Accounting degree.

Apply for your licence

You will need a Professional Practice Certificate (PPC) before offering accounting services to the general public. You can usually apply for this through the board you’re registered with, but you will need professional indemnity insurance to do so.

Name your business

Choosing a name for your business can be a critical factor in its success. Here’s a quick step-by-step guide on choosing a name that reflects the services you provide while staying relevant:

  • Find your niche. Will you specialise in tax accounting only or branch out into auditing or investment services?
  • Brainstorm names. Write down a list of possible words that reflect your company and its services.
  • Shortlist your ideas. Analyse your list of names and choose options that are catchy, easy to say and spell, and are memorable.

Research competitors. Make sure there aren’t any competitors with the same or similar sounding name.

  • Market research. Find people who work in the industry or potential customers and ask for their feedback on your chosen name.
  • Domain names. Make sure the name you pick has a domain available for your website.

Choose a business structure.

To transform your business idea into a legal entity, you’ll need to register for an Australian Business Number (ABN). This is a unique number that will identify your business to the government. You can use it on an invoice, on tax payments to claim goods and services tax (GST) or to get an Australian domain name.

To do this, you’ll need to know how you’d like to structure your business. Depending on the size of your business and how you see it developing in the future, you may want to consider one of the following structures:

  • Sole Trader. As a Sole Trader, you’ll be operating the business alone. While you’ll be able to enjoy taking complete control of business operations, you’ll also be entirely responsible for any debts your company incurs.
  • Partnership. If you’re thinking about opening an accounting business with a friend, then you’ll need to register as a Partnership. This will give you and your partner equal control over the company and its finances.
  • Company. Companies are more complicated and costly structures to set up but are ideal for those who want to open up a large accountancy firm. Typically, a company is owned by multiple shareholders, and the financial burden is split between them.

It’s worth noting that you can change your business structure later down the line as it grows and evolves. If you’re still unsure how to register your business, you may want to seek advice from a small business lawyer.

Create a business plan

Although a business plan isn’t a legal requirement to open a business, it can be helpful. Understanding your market, gaining insights into future finances and setting goals are all benefits of writing a business plan.

Here are a few elements to include:

  • Business description. Explain what your business does and how it makes money.
  • Product description. Analyse the services your business is offering and how it compares to your competitors.
  • Market research. Define the type of customer you’re targeting and how you’ll attract them to your accounting business.
  • Sales. Define your marketing strategy and how you’ll grow your customer base.
  • Finances. Talk through the costs of opening your accounting business and name your rates, as well as your sales projections for the future.
  • Future. Set realistic goals for the future and explain how you’ll meet them.

Consider financing your business.

When it comes to starting an accounting business, you will need to invest a certain amount of money. Luckily, there are several financing options available, ranging from personal loans to small business loans.

The table below shows several personal loan providers. Be sure you’re able to afford the repayment plan, along with any added fees or charges, before applying for any type of loan.

Set yourself up with helpful equipment and software

If you’re setting up your accounting business from home, many of your initial investments will go into buying the right equipment and software to run your business. We’ve put together a list of essentials.

Furniture

You’ll want to invest in some quality office furniture if you’re launching your company from home or providing work areas for your employees. Basic accounting office furniture includes desks, office chairs, bookshelves and filing cabinets.

Computer and printer

A computer or laptop is essential to running your accounting business. It will help you keep a log of customer’s records and organise and analyse financial data.

Accounting software

To make your life easier, you may want to invest in accounting software such as QuickBooks or Xero. Both can assist with forecasting and analysing data, helping to reduce human error in the long run.

Website

To add credibility to your accounting business, you may want to invest in building a website. To do this, you’ll also need a web host and domain name.

understanding-bookkeeping

Organise the legal side of your business

As is the case with any new business, it’s essential to understand your legal rights and obligations before setting up a shop. An excellent place to start is thinking about the legal documents that you need to get in place. You can do this yourself using online templates or contact a lawyer to do it for you.

Here’s a list of a few essential legal documents you’ll need to have in place to start your accounting business:

  • Employment Agreement. You’ll need to put an Employment Agreement in place for every member of staff you hire. This will outline an employee’s rights and obligations in your company, along with their duties, holiday time and remuneration.
  • Website Disclaimer. You should include a Website Disclaimer on your site to protect your company from legal liability.
  • Privacy Policy. A Privacy Policy outlines how you’ll collect and store your customer’s private data. This could be anything from their name to their credit card details.

Get access to legal services and documents online

Set your rates

Generally, accountants charge for their time in two ways: They either provide clients with a fixed-rate fee for the project or decide on an hourly fee and bill their client at the end of the project.

Choosing how much to charge clients can be tricky, especially when you’re first setting up in the industry. It’s worth spending some time researching how other accounting businesses in your area charge their clients. This will give you a general idea of how to price your services and how to stay competitive.

Find your first customers

Marketing is an essential tool when it comes to starting an accounting business. To kick-start your marketing, consider printing business cards and flyers to hand out in your local area. You could also consider buying a magnetic sign to advertise on your car.

Social media channels like Instagram, Facebook and Twitter, along with email marketing, are effective methods to promote your services to a broader audience.

Online business directories are also valuable assets to add to a small business’s marketing plan. They are comprehensive and can help you reach new customers.

Frequently asked questions

What are the different types of accounting fields?

There are various types of accounting available, including auditing, tax accounting, managerial accounting, cost accounting and fiduciary accounting.

Can you start an accounting business from home?

Yes. In fact, many new accounting businesses choose to work from home to cut down costs while they find their feet. Most of an accountant’s work takes place online or with clients, all of which can be done from the comfort of your own home.

How much do self-employed accountants earn?

According to PayScale, an accountant can earn between $58,000 and $80,000 annually. When you’re self-employed and set your rates, you have the potential to make this and more.

Three ways your accounting practice can stay competitive

While many accountants fear their changing role, there’s now more opportunity than ever to grow your practice, writes Jennifer Warawa, Sage EVP of Partners, Accountants and Alliances.

Gartner reports that by 2020, Artificial Intelligence will become a positive net job motivator, creating 2.3 million jobs worldwide while only eliminating 1.8 million. By the same year, there will be 20 billion internet-connected things, and by 2025 millennials will make up three-quarters of the global workforce.

With technological and demographic changes sweeping Australia and the world, how will accountants be affected?

Accountancy as a profession is now more competitive than ever. It used to be that your accountant was down the street or across town. Now, thanks to technology, businesses will go all the way across the country—and in some cases to another country—to find an accountant who services their needs.

Technology has levelled the playing field. Competition is everywhere, with client demands ever-increasing and evolving. A global Sage survey suggests accountants agree. Sixty-seven per cent feel the profession is more competitive than ever, and 83 per cent say their clients expect more now than five years ago.

So how can your practice stay competitive? Put simply, you need to ensure you stand out from the rest, and that comes down to focusing intensely on three key areas:

1. Embrace emerging technology

Clients today are very tech-savvy—and anticipate the same from their accountant. This is especially true for millennials, who will soon make up most of the workforce. They’re inherently tech-savvy, with 41 per cent believing technology will make the concept of “your desk” redundant. Instead, they think everybody will work via a mobile device.

Some accountants have a fear of no longer being of use to their clients because of technology. However, those who have embraced the cloud are discovering they can reduce expenses, make accounting (and business performance information) more accessible to their teams, and automate admin tasks—providing more time to add value to their client’s business through offering business advice and foster client relationships.

Sage research reveals 67 per cent of accountants say cloud technology is improving client interactions and service offerings. In contrast, 66 say they would invest in AI to automate repetitive and time-consuming tasks.

2. Develop your soft skills

Communication is key to cultivating a good relationship with your clients, staying up to date with their changing needs, and generating new service opportunities.

A NAB survey of Australian small to medium-sized enterprises (SMEs) reveals that while many practices do keep in regular contact with their clients, one in three does so only once per quarter.

Staying up to date with your client’s changing business needs is critical to retaining them. Thirty-one per cent of SMEs say the main reason they have switched accountants is that their business needs to be changed, making it the number one reason.

Seeking feedback from clients is also something many Australian practices neglect but is critical to retaining clients and improving services. One in four Australian SMEs says their accounting practice has never sought any feedback, while only one in five say their practice does so regularly.

Whether positive or negative, client feedback is key to improving your services. It shows you value your client’s opinion, helps you highlight problem areas you may be unaware of, and lets you know what your clients love.

3. Be a trusted advisor

A future-proof firm is all about helping clients beyond core accounting. More importantly, it’s about forming ‘customers for life’ throughout the year, not just around tax time.

Most practices realise the practitioner of tomorrow will need to be more of a business advisor—something clients are increasingly demanding. NAB research reveals Australian SMEs consider accountants their most trusted business advisor, ahead of business networks, lawyers, and family.

However, one of the main reasons SMEs switch practices is that they don’t receive proactive advice, just reactive service. Believing they know their client’s situation, many methods simply don’t ask their clients about their business. But the reality is that companies are changing all the time and practices often make assumptions about a client’s situation that aren’t necessarily correct.

Being inquisitive by proactively asking your clients open-ended questions, listening to their business concerns, and asking the right follow-up questions is key to unlocking the issues relevant to them. And doing so regularly will help you tap into their changing needs.

Guest post by : team Form -

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