Member Article

Is it time to start your own accountancy business?

If you’re tired of working for someone else in a large practice and are feeling the urge to start your own accountancy business, now can be as good a time as any. But a bit of pre-planning can help ensure you get off to a good start, primarily when it comes to your business finances.

Turnover is notoriously low in early days; it may take a while to build up your customer base and you may need to offer discounts to attract customers initially. As a result, money can be tight at the beginning. How can you keep your expenses manageable? Here are some ideas for minimising costs when starting your own accountancy business.

Accountant Insurance Professional Indemnity Insurance (PII) is a necessity for accountants, no matter the size. It can help protect against being sued by clients for professional negligence, in case you give advice that causes a financial loss for a client. While PII is only mandatory for chartered (or chartered certified) accountants, it’s a critical form of risk management that non-chartered accountants should put in place as well before they open for trading.

PII premiums for accountants are highly variable, and cheap coverage can take some effort to find. The cost can vary depending on the size and age of your business, as well as the types of accountancy work undertaken. To help you find the cheapest accountant professional indemnity insurance for your needs, be sure to compare quotes from multiple insurance companies. Prices can really differ from one insurer to the next, so investing a bit of time here can really pay off.

Marketing Google Adwords can be expensive for a small business, so establish yourself on Instagram or Twitter to build up some free marketing exposure. Follow local businesses and report on how news from the accounting world might affect businesses in your local community, or notifying followers of important upcoming deadlines, such as common VAT deadlines.

Software Don’t invest in expensive software such as Sage at the beginning. Experienced accountants say that a combination of an Excel spreadsheet, VT and the HMRC website will do for bookkeeping, accounts and tax initially.

Sage can always be purchased at a later date if you have any larger clients who use it. Xero is another popular option at present and is cheaper than Sage.

If and when you decide it is time to buy a more expensive software option such as Sage, look out for free trials. And if you don’t see any discounts currently on offer, contact the provider. Sales staff may have some flexibility when it comes to pricing, which you can only take advantage of by asking.

Premises Until you hire staff (if that’s your plan) you certainly don’t need to rent office space - and even then maybe it’s not a necessity. Renting a desk in a co-working space starts from around £200 a month in London, and less elsewhere in the country.

Working from home is also an option if you have the space - just be sure to alert your home insurance company if any clients visit you at home as you need to ensure you have public liability coverage set up, and not all home insurers cover business activities. And if they do, you certainly need to declare this ahead of time.

This was posted in Bdaily's Members' News section by Erin Yurday .