Starting a public accounting practice in Canada can be a very fulfilling and rewarding career choice. However, there are several steps that new accountants must go through to get a practice up and running. Of course, before you decide to start a public account practice, you must go through the proper accounting education requirements and possibly get a designation like the Chartered Professional Accountant (CPA) to help establish credibility.
Step 1: Register the Accounting Practice
The first step is to register your new firm with your area’s CPA organization. For example, the CPA Ontario requires you to register with their organization as either a public accounting practice or professional corporation. For corporations, you will also need to provide articles of incorporation and certificate of authorization. The registration fee is $113 for the public accounting practice and the professional corporation fee is $203.40.
Step 2: Establish Professional Liability Insurance
One of the key requirements of the public accounting practice application is the declaration that the practice has professional liability insurance. The CPA Ontario organization requires at least $1 million per claim for a one member firm, $1.5 million per claim for two to three member firms, and $2 million per claim for four or more member firms. There are several insurance providers that offer varying coverage for liability insurance. For example, AICA offers the minimum coverage amount at a base rate of $1,450 for a full-time sole practitioner.
Step 3: Register with the CRA
Depending on the structure of your practice, you will need to register with the Canada Revenue Agency (CRA). If you decide to incorporate, you will need to do so by either incorporating a federal or provincial corporation, which allows you to do business anywhere under the same name. You will also need to obtain a business number (BN), which is a nine-digit account number. You can establish several different accounts for your business through a single registration, including GST/HST, payroll deductions, and corporate income tax.
Step 4: Infrastructure and Technology
Once the registration process is complete, the next step is to establish your business infrastructure and technology. Many sole proprietors choose to initially work from their own home to keep overhead costs low. Firms with multiple partners can either rent office space or join a virtual office that is a turn-key office environment for a fraction of the cost of actually buying furniture and supplies.
Once the location of the business is established, the next important step is to determine which technology is appropriate for your practice. There are many types of accounting software available to the public that can be either simple or extensive, depending on the price level. QuickBooks offers two programs specifically to accountants. The more basic option is the cloud-based technology called QuickBooks Online Accountant, which is free. It gives your practice access to see all clients in one location, QuickBooks resources and educational tools, and even payroll for your own company. The more advanced option is the QuickBooks ProAdvisor program that is an all-in-one accounting option and includes curriculum to become a QuickBooks Certified ProAdvisor. The costs for this program is $399 per year.