Starting your own accounting advisory firm offers many benefits, such as the freedom to choose your clients, specialize in an industry or service you’re passionate about, or build a professional environment that allows you to thrive.
And if you plan to include advisory work as part of your accounting services, you should be confident that the demand is there to attract clients. In a 2024 Thomson Reuters Institute survey of tax and accounting firm professionals 66% of respondents said “their clients are strongly in favor of receiving more business advice.” Your skills and expertise are in demand to gain prospective clients!
Running your own accounting firm can be incredibly rewarding, but it’s not the right path for everyone. Before diving in, it’s crucial to evaluate whether this career move aligns with your personal and professional goals. Here are some key considerations to help you decide.
Running an accounting firm requires a unique blend of technical expertise and business acumen. As a business owner, you’ll have the freedom to make decisions, set your own schedule, and reap the financial rewards of your hard work. However, this also means you’ll be responsible for managing the business side of things, including marketing, finance, and human resources. If you enjoy being in control and are willing to take on the challenges of entrepreneurship, running an accounting firm might be the best option for you.
Starting an accounting firm requires a significant amount of experience, motivation, and support. You’ll need to have a strong foundation in accounting principles, as well as experience working with clients and managing a team. You’ll also need to be motivated to succeed, as running a business can be challenging and unpredictable. Finally, you’ll need a support system in place, including mentors, peers, and family members who can provide guidance and encouragement along the way.
Starting an accounting firm requires a significant investment of time, money, and resources. You’ll need to have a solid business plan in place, including a budget, financial projections, and a plan for attracting clients. You’ll also need to have access to capital, whether through loans, investors, or personal savings. It’s essential to ensure that your business is adequately capitalized to avoid financial struggles and ensure long-term success.
Starting your own accounting business can be daunting, as it involves significant work and preparation. That’s why we’ve created a step-by-step guide to getting your accounting practice off the ground.
As you begin to envision the scope of your business, it’s important to verify that the market aligns with the direction you’re headed. Get a thorough understanding of the current landscape you want to enter and look for gaps you might fill. Accounting firms play a crucial role in maintaining accuracy and compliance in financial reporting, making it essential to understand their impact on the market and the specialized services they offer.
Some things to consider:
It’s important to make sure your accounting qualifications and experience have prepared you for the type of work you want to do and the expectations of your prospective clients. Some clients may insist on hiring a CPA firm or a certified public accountant to satisfy their legal requirements. Smaller businesses may be less concerned about certifications. Do your homework to provide your client with the right service offerings, and give them what they want.
Also, consider the jurisdiction and associated tax laws that are applicable to your clients’ books. You’ll need to be well-versed in their regulatory and tax obligations.
Now’s the time to formally select the niche you’d like your business to operate in. Although your business may grow and change over time, it’s wise to begin by focusing on one or two specialties. Your market analysis and interests will inform your decision. Managing your own practice allows you the flexibility and control to choose niches that align with your personal career goals and work-life balance.
There are 5 major categories to consider::
You may also choose to focus on particular industries or types of businesses you want to serve, e.g. creatives, real estate, or IT businesses. It’s helpful if you have specific experience, interests, and connections in your chosen niches.
Adhering to tax and legal obligations is a part of owning a business. The first step in navigating these responsibilities is to select the right business structure. This may include forming a limited liability company (LLC) or a separate legal entity to protect your personal assets.
It’s crucial to consult a legal expert when deciding the right structure for your accounting firm. They can guide you in choosing the best framework for your business, ensuring it aligns with your goals and complies with local regulations. Additionally, they can advise you on how to register in your jurisdiction, help you avoid potential legal pitfalls, and set a strong foundation for future success.
Starting an accounting firm requires several business licenses and permits to operate legally, including an Employer Identification Number (EIN). Each state in the US has its own requirements, but here are a few general licenses most businesses require, including:
It’s also a good idea to consult with local authorities or legal professionals to ensure full compliance.
Before you begin operating your own accounting advisory firm, one of the most critical steps is to clearly separate personal and business finances. This is particularly important for LLCs and corporations because these business structures are designed to shield owners from personal liability.
By keeping finances separate, you preserve these entities’ legal protection ensuring that your personal assets—like your home or savings—are not at risk if your business faces a lawsuit or financial difficulty. This distinction between personal and business finances is fundamental to the “corporate veil” that protects business owners from creditors and lawsuits directed at the business.
Once you’ve registered your company and obtained an EIN, the next essential step is to open separate bank and credit accounts for the business. This simplifies your accounting, but it’s also just more professional and lends credibility to your firm.
Failure to separate finances could lead to “piercing the corporate veil,” where courts may hold you personally responsible for business debts, negating the benefits of forming an LLC or corporation in the first place.
Developing a solid marketing strategy is key to attracting clients and building a sustainable business. The first step is to define your target market—whether you’re focusing on small businesses, individuals, or specialized industries like real estate or healthcare. Understanding your ideal client’s needs will allow you to effectively tailor your services and messaging.
Next, create a strong brand presence by designing a professional logo, website, and social media profiles. Ensure that your online presence showcases your expertise, services, and testimonials, which builds credibility and trust with potential clients.
Networking is another crucial component of your marketing strategy. Establish relationships with local business owners, financial advisors, and legal professionals who may refer clients to you. Consider joining industry associations or attending local business events to get your name out there. Offering free resources like blog posts, webinars, or consultations can demonstrate your knowledge and provide value to potential clients.
Don’t forget to optimize your firm’s website for local search engine optimization (SEO), so that individuals and businesses in your area can easily find you when searching for accounting services. By combining online marketing with networking and relationship-building, you’ll create a well-rounded strategy that consistently brings in new clients.
Starting an accounting firm is exciting but it is possible to get off on the wrong foot if you’re not mindful from the outset. Managing your own accounting practice comes with its own set of challenges and advantages, such as increased control over income and flexibility in scheduling. Here are some common mistakes to avoid:
FreshBooks can set your accounting firm up for success, making operations smooth and efficient. This all-in-one software connects you with your clients in a single digital platform, helping you manage their finances, organize tax documents, ensure compliance, and provide timely, informed financial advice. It includes everything from proposals, invoicing, and payments to time tracking, payroll, accounting reports, and more.
Its intuitive interface and ability to automate tasks like invoicing, expense tracking, and payment processing make it a popular choice for many accounting professionals. You can also join the FreshBooks Accounting Partner Program, which provides access to education, and certification along with accountant-centric support from real humans.
The cost can vary significantly depending on your location, business structure, the services you offer, and your initial client base. Some typical expenses might include:
1. Business registration and licensing fees
2. Office space and utilities
3. Technology and software
4. Insurance
5. Marketing and branding
6. Professional memberships and training
7. Miscellaneous expenses
8. Initial working capital
These costs can vary depending on how aggressively you want to market yourself, the services you plan to offer (e.g., bookkeeping vs. tax planning), and the size of your initial team. Starting with a home office and relying on cloud-based accounting software can significantly reduce your costs.
Going out on your own can feel unnerving, but you don’t have to go it alone. FreshBooks’ Accounting Partner Program offers a whole community of accounting professionals who are already deep into operating their own accounting and advisory practice. You can also get guidance from experts to help you grow your own firm.
With the right preparation and the right tools, you can bring a successful, sustainable business to life.