Year on year there are more and more start ups and people becoming self employed. It seems that becoming self-employed is an option for more people than ever before, and this is a fantastic opportunity for accountants looking to branch out on their own.
Small businesses are not always able to employ permanent full-time qualified accountants. Instead, they tend to opt for the more cost-effective method of utilising independent, self-employed professionals. So, there are big opportunities for freelance accountants.
However, opening your own business can be daunting, and you might be wondering just how to become a self-employed accountant. Let’s take a look at the best steps you can take towards realising your dream with the support of the right accounting qualification and knowhow.
The AAT (Association of Accounting Technicians) qualification is the minimum required for a qualified accountant. It’s popular with those without any previous formal qualifications, as an entry route to becoming an accountant.
Upon a completion of AAT Level 4 Professional Diploma, you are able to join AAT as a member in practice (MIP), and can offer your services as an accountant. As your skills and experience expand, you can add more services like taxation, payroll, VAT and accounts preparation to your offering.
The AAT qualification covers pretty much everything you need to know for professional accounting. If you are hoping to offer a broader accounting service, though, you will need to look at ACCA.
ACCA (the Association of Chartered Certified Accountants) is one of only two qualifications that allow you to legally sign off accounts for organisations around the world. If you have previously studied AAT, some of the material corresponds, offering you exemptions from the first three papers of ACCA.
ACCA allows you to become a qualified accountant, and you will be able to provide a full range of accountancy services, including audits and tax, as well as advising clients how to improve their business’s finances.
This step should run alongside the others, beginning, if possible, at the start of your journey towards becoming a self-employed accountant.
Of course, finding full-time relevant positions can be a challenge before you become qualified. If you are not able to find paid work straight away, volunteering in a financial role is an ideal way to expand your knowledge and skills.
This will not only make it easier for you to gain paid experience with a firm, but will give you the functional experience you need to set up on your own. While AAT and ACCA cover everything you need to know to practice as a bookkeeper or accountant, it is essential to gain practical familiarity with the systems and methods you will be using, so that everything runs smoothly from the start.
4. Legal recognition
When you are fully qualified, and have a few years of experience under your belt, you are ready to stride out on your own. Before embarking on your solo venture, though, you must take into account the legal requirements that go with setting up your own practice:
- You should tell HMRC as soon as you start working for yourself, and obtain a unique agent code from them
- It is a legal requirement that any person or firm providing an accountancy service in the UK must be registered with and monitored by a recognised supervisory authority. Approved Supervisory authorities include AAT, ACCA, CIMA etc
- You will be holding personal data on your clients, and so you must notify the Information Commissioner (ICO)
- If you are trading in the UK, I would recommend you buy Professional Indemnity Insurance (PII). It’s a type of insurance that will protect you against legal action taken by your clients in the case of mistakes
5. Marketing yourself
And finally, how do you attract new clients?
Having new clients is the bloodline of every business. The traditional ways of getting customers have changed substantially, and you now need to be more creative and use different methods to get your name out there. Networking and using social media can help you to expand your client base, as well as gain support from other members in practice.
It’s also a good idea to have your own website, as a large proportion of your customers will be searching for accounting services online. From there, you can begin to build up an online presence for your business, as well as meeting prospects face to face.