The accounting profession is a diverse industry, and many graduates decide to set up a practice after graduation from college. According to the Journal of Accountancy, the most basic requirement for setting up a business as an accountant is becoming accredited as a Certified Public Accountant. In addition to this essential requirement, there are other items and necessities that may vary depending on where a person lives and the rules and regulations that exist in that region.
Becoming a Certified Public Accountant (CPA)
Any accountant who wishes to start his or her own business should work toward becoming a CPA, which means choosing a college program that prepares the student to take the official exam, as well as covers the requisite number of college credits to qualify to take the test. Becoming a licensed CPA isn’t the only license an accountant may need to create a business.
In addition to requiring a CPA license, the state or municipality where an accountant lives may also require a business license. Furthermore, any accountant who wishes to create a small business out of his or her home may need to check with the local zoning rules to ensure that home-based businesses are allowed under local law.
Researching the Market & Its Current Needs
The need for accountants is consistent, and the profession is often seen as “recession proof,” since an accountant doesn’t work in entertainment, and people and businesses don’t usually cut their accountant out of the budget unless there is a dire financial need to do so. However, choosing the right location for setting up the accounting practice can have an impact on how quickly the business can grow and become stable after its initial startup phase.
Further considerations for the location of the business involve deciding on the legal form of the business. Will the accountant create a sole proprietorship and work independently of other accountants? Another option might involve a partnership or limited liability company where the accountant works with other professionals in the same business.
Business Responsibilities of a Business Owner
An accountant who runs his or her own business must concentrate on more than just the numbers and figures of client tax forms and balance sheets. Like any small business owner, an accountant must consider marketing and advertising needs, as well as technology purchases. Will the accountant require a new computer, printer, and smartphone, as well as standard tax software and a copier? Making sure the business has the technology required for the accountant to work efficiently and without hassles is particularly important when the business is first getting off the ground.
Additionally, an accountant who only recently graduated and became a CPA would probably have very few professional connections. A brand new CPA business might not even have any clients. Finding new clients is a process that takes years, and modern accountants must work consistently at growing their client list through word-of-mouth, traditional advertising, and online marketing.
Setting up one’s own business can be one of the most rewarding activities an individual undertakes in his or her lifetime. Planning well and taking advantage of resources like the Small Business Administration (SBA) and its Learning Center can help make sure the fledgling business thrives in any environment. For the best chance of success, current students and future accountants who wish to set up an accounting practice in the future should begin with a solid education, obtain a license as a CPA, and research standard business practices.