As an accountant, you might consider starting a public accounting practice in Canada as a fulfilling and rewarding career choice. Are you a new accountant? Before launching into a public accounting practice, it’s likely you need the Chartered Professional Accountant (CPA) designation. These steps should help you get your public practice up and running.
Step 1: Register Your Accounting Practice
If you are a CPA already, register your new firm with your area’s CPA organization. For example, CPA Ontario requires you register with the organization as either a public accounting practice or professional corporation and pay the appropriate chartered accountant registration fees and membership dues.
Because fees and dues are subject to change, it’s a good idea to contact the organization directly for the up-to-date fees and dues amounts when you’re ready to register with any CPA organization. If your business entity is a corporation, CPA Ontario requires that you provide your articles of incorporation and certificate of authorization.
Step 2: Purchase Professional Liability Insurance for CPAs
A key requirement for your public accounting practice application is declaring your practice has professional liability insurance. CPA Ontario requires at least $1 million per claim for a one-member firm, $1.5 million per claim if your firm has two or three members, and $2 million per claim for four or more members.
CPA Quebec requires insurance coverage of $1 million per claim. Several Canadian insurance providers offer accountant liability insurance coverage. As an accountant, you know it’s wise to shop around for the best rates and track record of service for the coverage you need.
Step 3: CRA Registration When Setting Up an Accounting Business
Depending on how you structure your practice, you need to register with the Canada Revenue Agency (CRA). If you decide on incorporating, your choices are federal or provincial incorporation. Are you looking at practicing in multiple provinces or territories?
Federal incorporation is great for doing business anywhere and using the same business name. After incorporating, simply register in the provinces or territories you choose. Obtaining a business number (BN), which is a nine-digit account number, is a must. This system lets you establish several different accounts for your business through a single registration, including for GST/HST, payroll deductions, and corporate income tax.
Step 4: Setting Up a Brick and Mortar or Online Accounting Practice
With registration finished, the next step is putting your business infrastructure and technology in place. You might do what many solo accounting practitioners do, which is work from home. It’s a good way to keep your overhead costs low as you build your client base. Does your firm have multiple accountants as partners? Renting office space or joining a virtual office serve as two options. With a virtual office, you get a turnkey office environment for a lower cost and with more convenience than renting traditional office space and buying furniture.
After finalizing your business location, it’s time to select technology that’s right for your public accountancy practice. The market is packed with accounting software choices with a wide range of features and prices.
Opening a Boutique Accounting Firm
Another option to consider is opening a boutique accounting firm. This is when an accounting firm offers more general services, including IPO accounting services. A boutique accounting firm can have a few preferred areas of practice, but they have a general willingness to take any client who comes through the door.
Pros & Cons of Boutique Accounting Firms
As you weigh the pros and cons of specialization, remember that times change and so do markets. If you hyper-specialize in filing foreign tax returns, for instance, a single rule change at the Canada Revenue Agency (CRA) could fold those returns into the domestic market and change the filing status of your entire client base overnight. Ask yourself whether the pros and the cons are likely to hold true 10, 20, or 30 years in the future when you’re thinking about retiring.
- Specializing in a field often lets you charge higher rates for your services. People generally pay more for a tax specialist when they’re facing an audit, and you can capitalize on that.
- Developing a reputation for excellence in a single field draws business to your firm, rather than you spending time marketing to and locating a client base. Your reputation as Canada’s ranking expert in mergers could have other accountants referring their own clients to you when their clients need that service.
- Boutique accounting firms enjoy a measure of job security. As long as their field exists, their services are in demand.
- Boutique firms also face insecurities. If changes in your field make your special skill set obsolete, you need to adjust your services to the new market and possibly find yourself learning new skills and tax rules.
- Niche accounting firms sometimes have to turn away business.
QuickBooks offers two programs designed specifically for accountants. The cloud-based technology option, QuickBooks Online Accountant, is free. This software platform gives your practice access for viewing all your client files in one location, plus QuickBooks resources, educational tools, and even payroll for your own company.
But what if you want a more complex product? The more advanced option is the QuickBooks ProAdvisor program, an all-in-one accounting solution that includes a curriculum for becoming a QuickBooks Certified ProAdvisor. QuickBooks Online Accountant helps you manage your practice with one login. Start using it now.