Starting an accounting practice from scratch is no easy feat. If you are thinking about starting your own practice, there are some things you need to consider before you bring in your first client. The research stage is essential, so let QuickBooks do some of the heavy lifting for you.
Whether you are concerned about funding or unsure how to market, this guide can help. Keep reading to learn how to start an accounting firm in Australia.
1. Understand the regulations
Before starting an accounting firm, you need to know all the requirements. The rules vary between locations, but in Australia, accountants must hold a recognised accounting degree or qualification, you will also need to become a member of a professional accounting body such as Certified Practicing Accountant (CPA) or the Chartered Accountant (CA) in Australia.
Those wishing to open an accounting practice should also familiarise themselves with Accounting Professional and Ethical Standards (APES) so that they can properly conduct themselves in the public interest.
2. Go through the training
It can be tempting to charge ahead into starting your practice, but without the proper training, you might not be properly equipped. Firstly, training can answer all your questions, including:
- How do accounting firms make money?
- How can you legally protect your firm in case of negligence?
- What types of accounting practices can you run?
Training can teach you how to start an accounting firm with no experience of running your own business and ensure that you do it properly.
Furthermore, you need to obtain a licence for practice, and training can ensure that you achieve it. Hundreds of registered training organisations (RTOs) provide accounting certificates, so it’s easy to get onto a course and start learning.
3. Apply for a licence
You also need to obtain a Professional Practice Certificate (PPC) before you can start offering services. Typically, you can apply for a licence through the board you register with, but you need to get professional indemnity insurance to do so.
Once you have your licence, you’re good to go.
4. Create a business plan
There are multiple ways to structure a business:
- Sole trader: You operate the accounting firm alone as a freelancer. You get full control of your practice but are also responsible for all debts.
- Partnership: You and a partner get equal control over the firm and its finances.
- Company: A company is a more complicated structure, but is ideal for someone running a large accountancy firm. It is usually owned by multiple shareholders who share the financial burden.
Starting your own accounting practice is complicated, so your business plan might take quite a bit of research. Consider your legal business name, the services you will offer, and your goals for the future. You should also consider your rates and how you will charge clients.
Some accounting firms provide clients with a fixed-rate fee, while others bill hourly and send an invoice at the end of the project. It’s worth doing some market research on rates in your area or industry and how other firms charge clients.
5. Consider finance
During the planning phase, you also need to consider how much the start-up will cost. This includes technology, software, employees, marketing, and other expenses. Plan for the future as well as the present, considering what costs you might incur in the first 18 months to two years of operating.
You should consider how to finance the start-up and whether you will need to take out small business or personal loans to do so. Check that you can afford the repayment plan, including interest fees, and make a smart decision.
6. Invest in the right software
Start ups and small firms often need a little helping hand when it comes to keeping things in order. Ensure you have the right software to help you along the way, including tools to keep in touch with clients and ensure all your tasks stay organised.
QuickBooks has tools to help you manage your practice and assist your clients. By keeping all your needs in one place, you can focus on the things that need your attention and devote your time to making your practice flourish.
Good software can also help you stay on top of your accounting cycle, send and receive invoices, and more. If your budget allows, then investing in helpful software can make a great difference to your plan.
7. Start marketing
When your business plan and finances are in order, you can start marketing your practice and attracting clients. There are many ways to market, ranging from budget options such as SEO content marketing and social media marketing to paid options like ads.
Marketing techniques, like networking and handing out business cards, can also be very beneficial for start-ups. Don’t underestimate the power of making industry connections and partnering with other local businesses that can refer you to their clients.
Marketing looks different from firm to firm, so consider your branding and unique selling point, then start creating materials that reflect your organisation. It doesn’t have to be expensive, but you do have to engage in marketing if you want your practice to grow.
If you want to start your own accounting practice, there is a lot of work ahead. However, investing time into research and training can bring you great benefits down the line. The work you do now goes into a successful firm in the future.
Starting a new accounting practice s is hard, but the key is to keep at it. There will be obstacles along the way, but if you keep trying and adjusting your course as you learn, you can start a successful accounting firm.
How soon can I see results from starting an accounting practice?
Every business is different, but new practices may usually take 18 months to start seeing concrete results. For accounting firms, it takes time to build a solid client list, but putting the time in is worth it. Make sure you have finances covered for this slow period before business picks up, or the chance of failure increases.
How much does it cost to start an accounting practice?
Compared to other industries, starting an accounting practice is relatively low-cost. It’s possible to do it quickly and cheaply if you are already a trained accountant. Start-up costs include the website domain name, computer security software, accounting software, office supplies, company licence, and accounting certification. All in all, an accountancy firm in Australia needs roughly $1500 to get started, though some start-ups pay much more than this.
Can you start an accounting practice from home?
Yes. Many sole traders and freelancers start accounting agencies from home. This can be cheaper than renting office space, but it can also limit how much your company can grow. Some people start their company from home and branch out elsewhere as the practice grows. If you want to know how to start an accounting practice from home, check the tips in this guide.
Is starting an accounting practice worth it?
Starting your own accounting firm gives you more freedom. It lets you set your own hours, work from wherever you want, and choose the clients you want to work with. For some entrepreneurial individuals, the flexibility gained from starting a firm is more than worth it. However, starting a practice is hard work and it’s not for everyone. It’s important to do a lot of research and consider all your options before you dive in.