How to start an accountancy company

Have you got a head for figures? What about a strong worth ethic, flexibility and self-discipline in spades?

If this sounds like you, you might be in a good position to start your very own accountancy company.

Take it from us, it’s not always plain sailing. But if you do your research and put the hours in, it might just be the best decision you ever make.

Join us as we explore 10 things you should consider when starting an accountancy company.

1 Assess the risk

Starting any business is always a risk. You need to do your research – that means looking at the competition, understanding the pitfalls and considering what failure would mean for your livelihood. Do you have any capital to get it going – or would you need to approach a bank for a business loan?

2. Decide on the particulars

Will you be a bricks-and-mortar company, or online only? You also need to decide whether you will be a one-man (or woman) band, or whether you plan to hire employees.  If you’re starting the business as part of a partnership, you should ensure your long-term goals and plans for growth align with theirs.

Decide on your target market – it could be SMEs, fledgling start-ups, or medium and larger firms. And will you want to concentrate on winning business from other accountancy companies, or persuade people who currently do their own books to sign up for your services? Draw up a business plan that addresses these questions. 

3. Do your research

Look into what accountancy firms offer their customers, and how much they charge. Accountancy firms usually provide a mix of services ranging from basic bookkeeping and accounts preparation to financial forecasting, financial advice and support, with costings tailored to the package on offer.

What you offer will be partly informed by what you’re qualified to do. Beyond this, you could conduct a survey asking what people want from an accountancy service – you could identify a potential gap in the market this way.

4. Assess the competition

Check out those you’ll be competing with. There are thousands of accounting companies in the UK – from the household names to the tiny niche specialists. Decide what will set your company apart.

The good thing about opening an online-only accountancy practice is that they don’t need to worry about market saturation in the local area – ideally, you’ll be attracting clients from all over the country. 

5. Pricing

Decide on your pricing format. Will you charge a flat fee each month for pre-agreed services, or ad-hoc billing depending on what services they use? Bear in mind that online-only accountants fees tend to be lower.

You should also plan for how much work it’s feasible for you to take on. If you’re charging clients a flat fee, you should consider that some cases might end up taking longer than you’d bargained for, so factor this into the overall pricing structure.

6. Qualifications 

You can carry out accountancy-related work, such as book-keeping and VAT returns, without being a qualified accountant. But to offer a full range of accountancy services such as you would with an accountancy company, you’ll need to be qualified. 

You don’t need a degree for this, but you will need to be registered with the relevant industry bodies, as well as having several years industry experience.  The minimum qualification to practice accountancy is with the Association of Accounting Technicians (AAT), and the Association of Certified Chartered Accountants (ACCA).

There are various regulatory bodies you’ll have to register with before you start providing accountancy services, too, as well as obtaining your ICAEW practicing certificate. 

7. Business structure

You can either set up as a sole trader or register a limited company. These are both easy to do on the HMRC website. 

For tax purposes, a limited company might be best as you’ll be paying corporation tax on takings rather than the higher personal income tax paid by a sole trader. There’s also potential to make greater profit as you’ll own the company rather than just drawing a wage. 

Further, you’ll have limited liability, and your personal assets won’t be at risk if your business goes into debt.

8. Marketing

It’s important to consider how you will attract clients. Unlike some business ideas, you’re unlikely to get impulse customers – people will only switch accounting firms if they’re dissatisfied with their current provision and feel you could do better. As such, building reputation and trust is key.

You’ll need a clear and well-structured website that has information about your business and makes contacting you easy. You should also concentrate on getting positive reviews from existing clients – even if they’re family or friends who have used your services at a discount – as reviews are hugely impactful. You should also make an Instagram, Facebook, Twitter and LinkedIn page for your business and populate them with relevant content. 

Be honest with yourself – if copywriting isn’t your strength, outsource it to someone who can produce engaging and accurate content. If your website and posts are full of errors, potential clients will assume their annual accounts will be too.

9. Insurance

This is a key consideration, as you don’t want to be held liable for something that goes wrong during the course of your business. A robust professional indemnity insurance policy will cover things like data loss and clients financial losses, and public liability insurance is a must if you have a premises. If you’re going to hire staff, employer’s liability insurance will also be a requirement.

10. Data security

You’ll be dealing with highly sensitive personal information, both paperwork and virtual files. Therefore, you’ll have to follow some strict policies regarding how you use, store and dispose of this information in line with the latest UK-GDPR laws. This may include registration with the Information Commissioner’s Office (ICO), data encryption, data backup and Two Factor Authentication. 

It’s a good idea to become certified with CyberEssentials – a government-backed scheme which can help protect your business against online threats and cyber-attacks.

Should I start my own accountancy company?

Truthfully, it’s no easy feat to start your own accountancy company and these tips only scratch the surface of what it takes. If you’re already a qualified accountant, you’re at an advantage, but there are so many moving parts to setting up a business and it’s not a decision to be taken lightly.

Only you know whether you have what it takes – but we hope this quick guide has been helpful and given you an overview. 

And remember, even accountants need accountants! Give QAccounting a call today and we can walk you through our tailored business set-up packages which can help get your new business off the ground.