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From Idea to Reality: A Step-by-Step Guide to Starting an Accounting Firm

Accounting services track income, expenses, taxes, and other financial-related information for organizations and individuals. Accounting services are in demand for good reason. Professional accountants help business owners and individuals. We provide a clear picture of Accounting Finance, implementing tax reduction strategies and other financial benefits for our clients.

FOLLOW THESE 10 STEPS TO GET YOUR ACCOUNTING FIRM STARTED

STEP 1:

PLAN A BUSINESS

A clear plan is essential to being a successful entrepreneur. It helps you understand the inside and outside of your business and clarify the unknowns. Some important issues to consider are:

  • What are the initial and running costs?
  • Who is your target market?
  • How much can you charge your customers?
  • What is your company name?

How much does it cost to set up an audit firm? Accounting Firm services require an office, computers, accounting software, high-speed internet, desks, filing cabinets, printers, insurance, and advertising expenses. It would help if you also became a Certified Public Accountant (CPA). The CPA exam typically costs about $1,000.

What are the running costs of an audit firm?

Accounting services must pay monthly office rent, utilities, high-speed internet, employee salaries, marketing expenses, insurance, computer/software upgrades, and general office expenses. Monthly office rent for accounting services depends on the size and location of the facility. Generally, you can rent an office between $600 and $1,500 per month. You can work from home or another property you own. Plan to spend at least $150-$200 monthly on utilities, including high-speed internet.

Who is your target market?

Our ideal customers are large corporations. Other ideal clients are wealthy individuals and business owners with myriad sources of income.

How do accounting firms make money?

Accounting services generate revenue by charging fees to their customers. Some work by the hour, while others accept a flat rate for project work. Other accounting services are paid annually, covering the entire year’s accounting operations.

How much can you charge your customers?

The amount a client is charged depends on the size of the business, the scope of work, the area where you live, and many other factors. For example, if you can secure a well-known company that makes good money, you can charge between $125 and $350 an hour. On the other hand, if you’re working on a single project, like a personal year-end adjustment, you could charge anywhere from hundreds to thousands of dollars depending on the project’s complexity.

How much profit can an accounting firm make?

For a sole proprietorship, from $30,000, he could earn $75,000 in the first year or two. If the business grows, profits will eventually hit him in the six figures. Securing a stable customer list and expanding across the region can earn you millions. 

How can I make my business more profitable?

Ask your customers to recommend your services to their colleagues and friends. Take the opportunity to work on side projects such as personal taxes for wealthy clients. Making extra money by teaching accounting courses or training others on accounting software programs is also possible.

What would you like your company name to be? 

Choosing the right name is both important and difficult. If you haven’t thought of a name yet, visit our How to name your business guide or use our accounting firm name generator to help you brainstorm a name

If you are a sole proprietor, you can do business outside your company name. When registering a company name, we recommend that you look up the company name by checking the following:

  • Your state business records;
  • Federal and State Trademark Records
  • Social Media Platforms
  • Web domain availability.

Protecting your domain name before anyone else does is very important. 

STEP 2:

ESTABLISH A CORPORATION

The most common business forms are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.

Forming a legal entity, such as an LLC or corporation, can protect you from personal liability if your accounting firm is sued.

STEP 3:

TAX REGISTRATION

Before starting a business, you must register for various state and federal taxes.

To register your taxes, you must apply for an EIN. 

SMALL BUSINESS TAX

Depending on your chosen company structure, you may have different options for how your company is taxed. For example, some LLCs may benefit from being taxed as an S Corporation (S-Corp). 

STEP 4:

OPEN A CORPORATE ACCOUNT AND CREDIT CARD

Dedicated commercial bank and credit accounts are essential to protect your assets.

Mixing personal and business accounts puts your assets (home, car, and other valuables) at risk if your business is sued. In commercial law, this is called breaking into the company’s veil.

Additionally, learning how to build business credit allows you to obtain credit cards and other financing on behalf of your company (rather than yourself), raise interest rates, and increase your lines of credit.

Open a commercial bank account.

In addition to the requirements for applying for a business loan, opening a business bank account includes the following:

  • Separate personal assets from business assets. This is necessary to protect your assets. 
  • It simplified accounting and tax reporting.

Get a business credit card.

By purchasing a business credit card, you can:

  • Keep your business expenses in one place and separate your expenses from your business expenses.
  • Build your company’s credit history. This will help us raise funds later.

STEP 5:

CORPORATE ACCOUNTING SETUP

Tracking the various expense and revenue streams is critical to understanding an organization’s financial performance. Maintaining accurate and detailed accounting also greatly simplifies annual tax returns.

STEP 6:

OBTAIN NECESSARY PERMITS AND LICENSES

Please obtain the necessary permits and licenses to avoid hefty fines and even the closure of your business. State and local business license requirements

Most states require you to have an accounting license. In addition, certain government permits and licenses may be required to conduct accounting operations. Visit SBA’s State Licenses and Permits Reference to learn more about your state’s licensing requirements.

Certificate of residence

Accounting firms generally operate from offices. Generally, a Certificate of Occupancy (CO) is required if you do business in a physical location. CO certifies that all building codes, zoning laws, and government regulations have been met.

When renting a place:

  • Acquisition of CO is usually the landlord’s responsibility.
  • Before leasing, ensure the landlord has or can obtain a valid CO that applies to your accounting firm.
  • After major renovations, it is often necessary to issue a new CO. If you are renovating your business premises before opening, we recommend including a note in your lease that rent payments will begin once a valid CO has been issued.

  If you are planning to buy or build a site:

  • You are responsible for obtaining a valid CO from your local government agency.
  • Review all building and zoning codes for your business to ensure your accounting firm is compliant and can obtain a CO.  

CERTIFIED PUBLIC ACCOUNTANT

Certification (CPA) may be required to provide accounting services. This authentication enables us to provide services we would not be able to provide without authentication.

Service contract

Be sure to conclude a service contract. Your contract must accurately describe the services you provide, how much you will be charged, and what you will do in the event of unforeseen circumstances.

STEP 7:

GET BUSINESS INSURANCE

It would help to have insurance to run your business safely and legally, like licenses and permits. In addition, business liability insurance protects a company’s financial well-being in the event of damage.

Different types of insurance policies are created for different types of businesses with different risks. If you need clarification on your business’s risks, start with general liability insurance. This is the most common coverage required by small businesses, so it’s a great place to start your business.

Another notable insurance that many businesses require is workers’ compensation insurance. Your state will require workers’ compensation insurance if your company has employees.

STEP 8:

DEFINE YOUR BRAND

Your brand is what your company stands for and how the public perceives your company. A strong brand helps your company stand out from the competition.

Accounting firm promotion and marketing methods

The best way to promote your accounting work is to build relationships with local business owners and professionals. Attend networking events and conferences. Join the National Institute of Tax Professionals (NATP) and the American Institute of Certified Public Accountants (AICPA) to learn as much as possible about the industry and stay on top of the latest trends. Advertise throughout your community with flyers, brochures, press releases, radio station ads, local TV commercials, local magazine ads, and city newspaper ads. Ensure your website looks professional and has an intuitive design for user experience. All website content should be search engine optimized (SEO). This allows locals to find your accounting services when they search for accountants online in their community.

How to keep customers

First, obtain a license to operate a business in your home country. This approval is necessary to attract and retain customers. Spread your marketing budget across different media. Squeeze the meat at networking events. Take every opportunity to introduce yourself to business owners, investors, and anyone else who needs accounting services or who you believe has the authority to make hiring decisions. Step up your marketing efforts during tax season, when demand for accounting services is high. Develop strategies to match or beat competitors’ prices, reduce customer spend, and explain accounting details in layperson’s terms. 

STEP 9:

CREATE A COMPANY WEBSITE

Once you’ve defined your brand and created your logo, the next step is to create a website for your business.

Building a website is an essential step, but some people worry that they are out of reach due to their lack of experience building websites. It may have been a concern, but web technologies have come a long way in recent years, making life much easier for small business owners.

Here are the main reasons why you shouldn’t delay building your website:

  • Every reputable company has a website – period. When bringing your business online, it doesn’t matter what size or industry you’re in.
  • A social media account, such as a Facebook page or LinkedIn company profile, is separate from your website.
  • A website builder tool such as GoDaddy’s Website Builder makes creating a simple website easy. You don’t need to hire a web developer or designer to create a website you can be proud of.

STEP 10:

SET UP YOUR COMPANY’S PHONE SYSTEM

Setting up your phone for business is one of the best ways to keep your personal and business life separate and private. But the benefits continue. It also helps make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

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