Welink Accountants Welink Accountants
accountancy-firm

Steps to Setting up an Accountancy Firm from Scratch

Welink Accountants

Welink Accountants

Should you set up your own accountancy firm?

 

Many people with training and/or experience in the accounting field have probably considered working on their own. Although it is more common to take the step when you have some experience in the sector, there are many people who, shortly after completing their education, decide to take the step of setting up their own accountancy firm.

 

Summary:

 

1. Initial steps to setting up an accountancy firm

  • Define your firm
  • Create your business model
  • Purchase insurance
  • Protect client data

 

2. Next steps to setting up an accountancy firm

  • Receive proper education
  • Acquire accounting software (and know how to use it)

 

3. Last steps to setting up an accountancy firm

  • Distinguish yourself from the competition
  • Sales!
  • Secure a contract 

 

 

1. Initial steps to setting up an accountancy firm

 

Define your firm

 

You need to be clear about what type of accountancy firm you want to be. If you do not have sufficient financial muscle, perhaps at first it would be better to set up as a self-employed professional, for which it will be necessary to register with the HMRC, if you’re starting up as a sole trader, and open a business bank account. For a complete list of requirements to become a self-employed professional, check out Simply Business.



Create your business model

 

Although it may seem obvious, no two accountancy firms are the same. There are those who prefer a large volume of clients with lower fees and reduced services, and others who seek firms with complete management and higher fees.



Purchase insurance

 

Given that you are going to be in charge of the tax, accounting and labour management of your clients, you have to bear in mind that accountants sometimes make mistakes, and you should invest in liability insurance because you will be liable for your advice. 

 

Protect client data

 

In addition, you will need to consider contacting a professional expert in data protection, as you will be managing very sensitive information about your clients, and any breach of the regulations may result in significant penalties.




2. Next steps to setting up an accountancy firm

 

Receive proper education

 

 

The accounting profession is complex, as regulations are constantly changing and specific technical knowledge is required in various areas such as accounting, taxation or labour law.  



It is therefore advisable to have a degree in law, economics or business, complemented by specific training through professional masters or specialisation courses in tax consultancy, economic and financial management or labour relations.



People with higher education and some professional experience in the sector can also be great accountants. Although their theoretical knowledge is not as vast as that of university graduates, they have a great deal of practical experience and know a lot about the day-to-day workings of companies and the self-employed. 

 

 

Education does not end the day you obtain your certification or receive your Master's degree; you have to bear in mind that legislation is constantly changing and you have to keep up to date. That is why it is advisable to take refresher courses every year and stay current with new legislation. 

 

 

As an accountant, you must be registered with a professional association in order to be able to present your clients' taxes, social security and annual accounts. 

 

 

Acquire accounting software (and know how to use it)

 

 

In addition to education in the specialties covered in accounting, you must be agile with accounting software. Management programmes are becoming more and more sophisticated and complete, so if you know them well, you’ll be able to save time and money when doing your work. 

 

 

Accounting software allows you to automate many processes: issuing invoices in digital format so that you don’t have to use paper, predefining accounting entries when the same accounting procedure is repeated over and over, filing taxes directly through an online platform, and many other features.



It is also essential to be proficient with spreadsheets as their practical applications in the accounting profession are indispensable.



Last steps to setting up an accountancy firm



Distinguish yourself from the competition



However, you must not make the mistake of distinguishing yourself from the competition solely on price. Your business must be profitable, and you need to calculate the profitability each client offers. A high monthly volume of invoices or payrolls must be charged according to the amount of labour it will entail.

 

 

The evolution of accounting means that you must offer increasingly specialised services, as this will differentiate you from your competitors. Administrative processes are increasingly automated, and any consultancy firm can process a large number of accounting entries or payrolls and file taxes and social security payments thanks to the management programmes mentioned above.

 

 

However, there are services that are increasingly in demand by clients, such as the search for and management of subsidies, advice on international trade or even international taxation, which can be an important boost to our profit and loss account. 

 

 

Sales! 

 

As well as being an accountant, you are a salesperson. You have a business and you have to make it known so clients will come to you! There will be people with great experience and knowledge of the sector who can bring clients from previous work experiences, but in most cases, and even if you start with a certain potential clientele, you will have to look for more clients. 

 

 

It is advisable to carry out a market study identifying the consultancy firms in your area, analysing those that are successful in order to see how you can differentiate yourself from them. You must also get to know what people want and which accounting services they need in your city in order to identify potential clients.

 

You will have to make visits to companies offering your services, in some cases, you will be able to do this yourself, and in other cases, you may decide to hire a sales professional for this purpose. 

 

Secure a contract 

 

The recipient of your services is the client, so you must draw up a service contract with each client. The contract should be as comprehensive as possible to avoid misunderstandings, making it clear which services are covered and which are not. You will be able to charge varying rates depending on your services.

Find your accountant near you Find others

Are you an accountant?

List your firm on the leading platform for accountants and auditors