How to Start A Freelance Accounting Business

For many accountants, working on a freelance basis is a dream come true. Flexible hours, easy mobility, and low starting costs allow freelance accountants to work in a way that feels natural to them. These days, with more online tools at your disposal than ever, starting a freelance accounting business has never been easier.

What Is a Freelance Accountant?

Like salaried accountants, freelance accountants in Canada help manage their clients’ money so they can allocate resources more efficiently. Such clients include, among others:

  • Small businesses
  • Federal agencies
  • Corporations
  • Municipalities
  • Colleges
  • Hospitals

In addition, people too busy to manage their personal incomes often hire accountants to do the job for them, especially if their tax situations are complicated or if their opportunity costs in wages are high. Due to their typically lower rates, freelance accountants are popular choices for independent contractors and small businesses. Some of the tasks entrusted to freelance accountants include:

  • Recording revenue and expenses on digital ledgers to keep business accounts balanced
  • Billing a business’s clients and following up on late payments
  • Preparing business reports and financial statements
  • Handling all tax issues, including refunds, deductions, credits, shields, and exemptions, with an eye toward keeping tax payments low
  • Paying a person or company’s expenses on time
  • Ensuring a business’s financial operations comply with the law

In short, accountants handle most of the financial minutiae employees and companies face. Many Canadian freelance accountants also study the country’s income tax by province to keep their clients in line with the Canada Revenue Agency (CRA).

Some of the major types of accountants in Canada include:

  • Financial accountants, who analyze and report upon the financial transactions of businesses
  • Management accountants, who use accounting information to help managers make decisions
  • External auditors, who examine an organization’s financial records to ensure accurate reporting
  • Cost accountants, who analyze the costs of business processes to improve their efficiency

With the benefit of modern software that allows for instant communication and easy data storage, Canadian freelancers can practice just about any type of accounting, as long as they have the necessary credentials.

How to Become a Freelance Accountant

Becoming a freelance accountant is a straightforward process. Here are the major steps you can take to get there:

1. Get Qualified

Although you’re not required by law to have certification before selling your accounting services, most clients in Canada expect accountants to have a Chartered Professional Accountant (CPA) designation. This credential shows an accountant has a good understanding of Canadian accounting laws and best practices and knows basic accounting skills, such as balancing books, preparing for taxes, and drawing up business reports. If you’re encouraged to get a CPA designation, consider signing up for the CPA Professional Education Program (CPA PEP), which takes two years to complete and features six modules covering subjects such as:

  • Auditing and assurance
  • Financial reporting
  • Strategy and governance
  • Performance management
  • Taxation

In addition, CPA PEP students complete a capstone and prepare for the Common Final Examination (CFE), which they must pass at the end of the program to become designated CPAs. Although the exam may sound daunting, 77.6% of candidates passed the September 2017 offering on their first attempt.

If you have a business-or accounting-related undergraduate degree, you can probably get into CPA PEP right away. If not, don’t worry. CPA offers 14 preparatory courses in subjects such as economics and business law to get aspiring accountants up to speed. You can complete many of these courses online.

If you don’t have an undergraduate degree, you can still enter CPA PEP if you meet certain criteria. For example, if you have work experience in CPA competency areas such as financial reporting, you may be eligible for CPA PEP.

Once you’re certified, your prospects for snagging clients as a freelancer are much higher.

2. Go Online

These days, almost all freelance accounting work is available online, so it’s a good idea to build a digital presence right away. That means creating a website or blog to advertise your services, collecting client contacts through forums and job listings, and building a toolkit of accounting software to help you get work done. QuickBooks Online Accountant is a convenient app for freelance accounting, as it’s cloud-based, compatible with a wide range of other apps, and provides seamless record-keeping for expenses, invoices, and other documents all at no cost. If you join the QuickBooks ProAdvisor Program, you can also get listed in the QuickBooks Find a ProAdvisor directory, which helps potential clients find you.

In terms of physical equipment, all that’s needed to set up a shop are a computer and mobile phone. A laptop is probably ideal, if you want to work while travelling. You also need a good internet connection, since clients need to reach you seamlessly, along with portable internet devices for places with poor connections. To receive payments from clients, try setting up a payment processor, such as Stripe or PayPal. Keep in mind that many traditional clients may still prefer to send checks. To communicate with clients face-to-face, you can download a conferencing app such as Skype. Storing information is also crucial. Although many accounting apps, such as QuickBooks, feature cloud storage, you may still want a separate online cloud storage file for backing up information. In addition, it’s a good idea to sync your bank account with your payment processor and other apps to keep your cash flow as smooth as possible.

3. Advertise

In the freelancing world, you’re only as successful as the size of your online presence. On your blog, think about crafting short, well-written posts every few days providing snippets of your expertise, such as tax tips and notes on personal income tax law, if you specialize in that area. Blog posts demonstrate your knowledge of the field while giving potential clients a taste of your accounting approach. Besides, clients are always grateful for advice that saves them money. A blog gives you a regular incentive to update your knowledge of the industry as well.

When it comes to your main website, splurging for a quality design pays for itself in the long run. Make sure the site is sleek, simple, and easy to navigate since you’re likely to receive a lot of frustrated visitors who need help in a hurry. The site should list your areas of expertise and positive blurbs from former clients. Whether or not you list your prices is up to you, but that’s often the first piece of information clients want to know. Also, your site should have a professional photograph of you along with a statement of purpose. For optimal site quality, you might even hire a freelance copywriter to craft all the written material it contains.

Advertising doesn’t stop there. To build a presence, you may want to use Search Engine Optimization (SEO) techniques on your website to ensure search engines place it high in search results. That entails weaving keywords into your site copy, for example. You also need to make social media accounts and advertise on them. If your clients are pleased with your services, they don’t mind spreading your social media posts to help expand your business.

Crucially, your freelance accounting business needs a regular newsletter, which you can use to send updates, discounts, and blog snippets to clients. Since audiovisual content is king on the internet, consider making YouTube videos and podcasts exploring your subject area as well.

Don’t forget to advertise on crowdsourcing platforms. Often, you can make an account for free on these platforms and only receive fees once jobs are complete. The crowdsourcing platform Upwork features an entire section for freelance accountants. On it, you can sign up for short-term projects, which may last only a few days or for full-time contract work. Clients can also add you to special teams for recurring projects.

For example, a client may need an accountant just once per year to help them sort out income tax criteria. By keeping the same freelance accountant on the books year after year, clients don’t need to get new freelancers up to speed each time they need work done. Freelancer is another flexible crowdsourcing platform on which to ply your trade.

Finally, you can advertise using the following traditional methods as well:

  • Posting ads in newspapers
  • Making and handing out business cards
  • Asking friends and relatives to refer clients to you
  • Attending job fairs and freelancer conferences
  • Hosting events
  • Refining your elevator pitch

4. Build Your Business

Once your freelance accounting business is up and running, it’s time to start thinking about your long-term game plan. How are you going to grow your business, retain clients, and streamline your workflow? Since you don’t have a boss, you’re in charge of your daily motivation and task structure. It’s crucial that you develop a tight work schedule to stay focused and a log of daily activity to keep your time allocation efficient. Early in the morning is a good time to start freelance work, because that’s when you’re refreshed and less likely to be interrupted, but the freedom of freelancing means you can also enjoy working in the dead of night if that’s what keeps you focused.

Once you have a roster of clients built up, changing business arrangements is difficult, so make sure you don’t sell yourself short right out of the gate. Pick a respectable hourly rate, both because you may spend more time on your clients than you bill them for initially, and because prospective clients are apt to associate low rates with poor quality. If you prefer more structure, offer a bundle of services for a fixed monthly retainer. For example, you might tie together business reports, bill payments, and suggestions for business growth as one monthly service.

While you always want to be on the lookout for new clients, you can achieve just as much growth by selling new services to current clients since you have a proven track record with them. For example, if you manage a business’s taxes, you might offer to handle all their invoicing as well. You can even suggest free trial runs for services or offer special discounts for clients on retainer. The more proficient you are with the latest accounting software, the better your edge over the competition, so be sure to tout your technology skills.

Pros and Cons of Freelance Accounting

Freelance accounting has many advantages over traditional employment. You can:

  • Set your own hours
  • Work anywhere there’s an internet connection
  • Take breaks to eat or exercise anytime you want
  • Choose and drop whichever clients you want
  • Take vacations any day of the year
  • Make as much money as you’re able to work
  • Design your work space however you please
  • Invest and spend money as you earn it

In addition, freelance accounting lets you develop relationships with as wide a range of businesses as you like, and you can always quit and join a brick-and-mortar business, if you desire. Some businesses even let their accountants do freelance work on the side. Also, freelancing as an accountant has low starting costs and overhead, since you only need a computer and phone. If you want state-of-the-art software, you can buy it immediately instead of using a company’s standard fare, which may be outdated and clunky.

Freelance accounting is also just good practice, if you ever intend to join a company, and it teaches you how to balance your own books, too.

Not every aspect of freelancing accounting may be ideal, though. For example:

  • Many clients expect to pay freelancers less than traditional accountants
  • You don’t get the employee benefits that most brick-and-mortar accountants do
  • You have to build a client base, which takes time
  • Earnings and available work are both up-and-down
  • You can’t enjoy camaraderie with coworkers
  • You have to motivate yourself and exercise greater self-discipline to avoid distractions

Moreover, the work you receive as a freelancer at the outset is likely to be duller and more routine than you might prefer, since you may have to build a reputation before clients trust you with big, decisive projects. If you want to build a reputation quickly, you can always offer free or cut-rate services for such projects to prove that you can do them. Although the income tax rates Canadian freelancers face aren’t higher than for ordinary workers, they may have to sort out installment payments and Canada Pension Plan contributions to stay in line with Canadian tax law.

Also, freelance accountants have to advertise their services, vet their clients, pay their overhead costs, acquire extra certifications, and send invoices primarily on their own. The freelancing side of the equation can take almost as much effort as the accounting part.

Is Freelance Accounting Right for You?

Whether you should pursue freelance accounting depends on your personality most of all. Many people relish the freedom of freelancing, while others miss the predictability of a salaried job. If you feel uneasy about trying to pool together an income outside of the classic 9-to-5 structure, this path may not be ideal for you.

If you’re excited about the prospect of earning your bread on your own terms, creating a personalized business with a tailor-made service package, and working with clients you like, however, then the benefits may outweigh the costs.

To find out if freelance accounting is your thing, dip your toe in the water first. Take on freelance side-projects while you’re getting your degree or working for a business. You can keep building your client base on the side until you have enough to work as a full-time freelancer.

What You Need to Get Started

Although you only need a computer and a client to style yourself a freelance accountant, you’re more likely to get clients if you also have:

  • A bachelor’s degree in business or accounting
  • A CPA designation
  • Experience with accounting and other business-related software
  • A professionally designed website
  • Academic or professional references, including testimonials
  • A payment processor
  • Familiarity with non-Canadian as well as Canadian accounting principles
  • Several years of experience in a business setting

Internships are a great way to develop business experience before attempting to freelance as an accountant. They’re also good for building contacts with possible clients.

Before setting out, you also need a clear accounting brand. By focusing on a niche market, such as hospital management accounting, you can distinguish yourself from the competition. Pick a market, and dive into it. You can always switch your niche down the road anyway. Just make sure you leave room for general accounting clients, too.

What’s the Best Way to Become a Freelance Accountant?

The best way to break into freelance accounting varies from person to person, but a good strategy is to earn a bachelor’s degree in accounting from a respected university, join a CPA PEP program to earn a CPA designation, and then spend time practicing accounting for a large brick-and-mortar business. While working at this business, you can do freelance accounting on the side, if that’s allowed, and build up a stable of reliable clients. Then, once you’re ready to transition to a full-time freelance basis, you can quick your brick-and-mortar job.

Alternatively, there’s nothing wrong with trying to hack it as a freelance accountant right after passing your CFE.

How to Find Freelance Accountant Jobs

Starting out as a freelance accountant, you have to search for your clients using directories and crowdsourcing platforms. Once you establish a reputation, though, prospective clients are more likely to search for you. Early on, create profiles on UpworkFreelancer, and any other crowdsourcing websites you can find. You may have to bid on jobs against other freelancers.

Unless you’re trying to boost your reputation through low-cost work, don’t bid too low, and don’t agree to work with clients who strike you as untrustworthy or fickle. If you make business deals outside of platforms with heavy oversight, keep in mind that you run the risk of not receiving payment for your hard work. Sure, most platforms take a cut of your earnings, but in return, you get safety, security and consistency. Also, remember to sign up for directories, such as the QuickBooks Find a ProAdvisor directory.

Generate Your Leads

In addition to your professionally designed website, your presence on crowdsourcing platforms and directories, and your social media platforms, such as your Facebook and Twitter accounts, you can generate leads with employment services such as LinkedIn and Jobcase. Ideal for networking, LinkedIn lets you post your detailed work history for clients to browse and allows you to share posts and articles with potential clients. Jobcase features a user-friendly browsing tool so clients anywhere in the world can find you. To generate the most leads possible, take full advantage of every online platform you can find.

How to Price Your Accounting Business

When you’re first starting out, hourly billing is usually the best way to go, but at some point in your career, you may want to transition to fixed-fee pricing for the services you provide clients. In the beginning while working with new clients, you don’t have any way of knowing in advance just how much work may be involved in different situations. For example, helping a client properly record invoices and receipts may be fairly simple, or it may be a nightmare if your new client just presents you with a box full of unorganized paper.

As part of determining how to price your services, you should figure out how much income you need to get by on personally and for your business. Be sure to figure in all of your operating expenses, such as computers, internet fees, and software costs. Also, remember that a lot of your working hours are going to be spent marketing and soliciting new clients, so those hours aren’t billable. You need to make up for that time by charging a sufficient rate for your billable hours.

You should also do some research on the rates other accountants in your area are charging. That way you get a good idea of what clients are used to paying. When you’re first starting your new business, it’s probably unrealistic to try to charge top dollar for your services. You want to be competitive, but you also don’t want to set your prices extremely low in comparison to other accountants because you want clients to view you as being among the best.

Setting your prices too low communicates the unwanted message that your services aren’t that valuable. One way you can support the price of your services is by pointing out how much money you’re saving a client by effectively giving them access to sophisticated accounting software or offering other value-added services.

Pricing your accounting services can be challenging, but with the right research and calculations, you should be able to come up with sustainable prices. Remember, pricing correctly right from the beginning helps get your accounting business off the ground and make it profitable.

Don’t Forget Your Own Accounting

Just because you spend your job managing the income and tax details of your clients doesn’t mean you can afford to neglect your own. Take care to tally all the costs of your business so you can deduct them during tax season, such as computers, phones, accounting software, service subscriptions, site hosting, business cards, directory listings and travel. Freelancers often have high tax bills, so deduct as much as you can.

Also, keep detailed logs of how much time you spend doing each task for your job so you know whether you’re undercharging your clients or investing too much effort in marketing. Finally, keep track of where your money is going. Cash flow problems are a common hazard for new businesses, and you don’t want to end up spending your income before you have it.

Freelance accounting is an exciting frontier for bold entrepreneurs who cherish freedom and flexibility, though it comes with some risks. If you practice as a freelance accountant long enough, many doors can open up for you, including ones that lead to a high-paying career as a full-time consultant or financial planner.

You can bring QuickBooks Online Accountant on your journey as well. QuickBooks Online Accountant helps you manage your work, your clients and your practice, all with one login. Sign up for free.

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