• Tips & Tricks

How to Become a Self-Employed Accountant and Succeed

Becoming a self-employed accountant can be daunting and yet exciting for many who are considering what they should do with their accounting qualification and experience. 

Working as a freelancer has become an attractive prospect post-2020. The world became acquainted with what the work could look like, free of traditional office structures and policies.

Whether you are qualified and experienced or considering freelance accounting after your studies, you will find the information you need here to help you become a self-employed accountant.

What is Freelance Accounting?

A person who earns a living by securing clients and then charging fees as agreed with the client is called a freelancer. 

Fees are charged per hour, week, on presentation of completed work, or as a retainer fee (a fee which is paid regardless of work outcomes to retain the services of a professional).

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Steps to set up a Basic Freelance Accounting Business

The old saying goes, “If you’re going to start something, then go big or go home.” 

The same is true for how to become a self-employed accountant. 

The chances of being a successful freelance accountant increase when you have a well-thought-out plan.

If you put time, effort and hard-earned money into starting a business, you want to be sure that you will receive a return on your investment.

Write out a business plan

Many online resources will provide you with a template for a business plan and a platform like YouTube will teach you how to complete one.  

A business plan will help you to deal with all the elements necessary to start a business and keep your ideas focused.  A business plan will also be required should you want to apply for capital to start your business.

Get the qualifications that matter

Every country has minimum entry requirements that govern accounting services and it is recommended that you investigate this thoroughly to ensure your qualification is recognized.  

A degree will give you the foundational knowledge and teach Generally Accepted Accounting Principles (GAAP).

In Europe and the USA, a bachelor’s degree in either business, finance or economics is an entry-level requirement in this field. In Europe, you are required to add three years of working experience to your degree.

Photography of People GraduatingSource: Pexels

There are other types of accounting certifications, and these will depend on what direction you want to go in.

For instance, you can become a Certified Management Accountant (CMA) or a Chartered Financial Analyst (CFA) in the USA.

In Europe, the CertIA – Certificate in International Auditing or DIPIFR – Diploma in International Financial Reporting is available for those who want to specialize in these areas. 

Get as much experience as possible

Many accounting students also work as interns in firms to gain the hands-on experience required in this field. Doing voluntary work while you study is also an option to gain experience.  

Most tertiary institutions have recommendations on employers that are willing to give inexperienced students workplace exposure. 

Once you have gained a qualification and some basic experience, you can offer to do the bookkeeping for small businesses in your community by placing your services on social media sites.  

Charging a small fee just to get experience or offering packages at a discounted rate may bring some clients to your doorstep. And who knows, perhaps they will become long-term clients. 

Small beginnings are not to be scoffed at, or at least Richard Branson thinks so. 

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Register as a company that provides accounting services

Registration of your company and your company name, according to your country’s regulations, is one of the first things you want to get in order.

The requirements vary per country, but there are certain basic guidelines that the EU gives for all countries, such as:

  • setting up in no more than 3 working days
  • costing less than EUR 100
  • completing all procedures through a single administrative body
  • completing all registration formalities online
  • registering a company in another EU country online [4]

When there are already so many things to do to get your business up and running, having this process done online makes things simple and streamlined. 

Register with an approved regulatory body

The accounting profession is organized differently across countries in Europe.  Auditors are regulated at the EU level, but different countries’ governments regulate accounting services.  

An organization like Accountancy Europe [5] has 1 million professional accountants that are registered with member bodies and would be able to advise you based on your own needs.

Belonging to a regulatory organization gives you a professional image that so many clients will be looking for and the security that your accounting services are practiced according to industry standards.

Pick a specialty 

We all have unique interests when it comes to the field of accounting.  What appeals to one person is a bore to another.  

Think about what you excel at and make that your unique offering.

For example, you may want to specialize in providing individual or small business tax accounting. 

Since many clients look to their accountants for this information, this is a great way to establish your credentials quickly. 

Some specialties in the field of accounting include:

  • Auditing
  • Financial Accounting
  • Forensic Auditing
  • Internal Auditing
  • Management Accounting
  • Taxation

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Open a business bank account

Although you may be concerned with the cost of opening a separate business bank account, this is not a step that you should skip.  

A bank account in the name of your business will assure your clients that you are a registered company since you must be officially registered to open a business bank account.  

It will also help you to keep all your business expenses separate from your private finances.  

These practices will go a long way to making your conduct as a freelance accountant appear professional from the beginning.

Consider your accounting software option

As a freelance accountant, getting ahead of your competitors is key, and your accounting software will help you do that.  

Not all accounting software is equal. You should consider the cost of the license, the support you get from them and the training provided.

Start by making a list of requirements of the services that you will offer your clients and the reports that are needed to comply with standard accounting practices.

Here are some essentials that you want to be included in your accounting software:

  • User-friendly software
  • Multi-currency transactions
  • Web/Cloud based application 
  • Secure Data

Envoice provides seamless integration with leading accounting software and allows you to take proactive steps to take your practice to the next level; check out their services here.

A female freelance accountant working from home on her couch

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Deal with the tax implications

As soon as you have registered your business and opened a business bank account, you are ready to register your new company to pay tax. 

A quick visit to the nearest national tax office and a chat with the tax representative will save you time and frustration, ensuring that you know exactly what the tax implications are for your business.

In the USA, the internal revenue service website will guide you with information about your tax obligations [6] 

Decide on how you will present your services

There are many options available to freelance accountants, and how you structure your offering will depend on the type of clients, the services and the number of financial statements and reports your client will require.

A popular way to charge for services is to bundle services into packages and have a basic, intermediate and advanced level of services.  

Any offer you can make available via a basic e-commerce site or website will go a long way to getting clients on board.  

Simplify your workflow and save time from the start

No client can afford to use or keep up with an extended workflow that is difficult to manage and train their employees on. 

Your offering must make the clients’ life easier, and since accounting practices can be cumbersome for most clients, you have an opportunity to take a great deal of time off their hands.  

For this, you will need a partner you can trust to help you cut down on data entry and repetitive tasks.  

Another real plus is the ability to review your clients’ data in real time so that you can provide proactive feedback. Doing this will establish you as a cut above other freelance accountants.

Solutions offered by Envoice simplify the workflow, saving you a great deal of time and, therefore, money. They have affordable pricing plans, which you can view here.

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Network like it’s your lifeline, because it is

Self-employed accountants will have to find a way to stay in touch with other accountants and also mingle in the same circles as their clients.

Start-up businesses like to attend small business networking events, which are advertised on social media pages.

Be available for introductions by attending the same events as your clients so that you can be introduced by your client to other start-ups.

Social media groups are also an excellent way to network with other professionals and they give you an in-road to discuss with others what has worked for them. Be seen in the right places at the right time and you won’t have to put aside a huge marketing budget.

Marketing tips and hacks

Targeting specific groups through social media is easier than it’s ever been.  You can create a marketing campaign on a platform like FaceBook that will allow you to be seen by clients you want to work with.

The time it takes to learn how to do these campaigns are minimal, but the benefit is well worth it.

Can you make a career out of Freelancing?

According to medium.com [1], which conducted a survey into freelance workers as recently as 2021, the UK and Italy have the highest number of freelancers, followed by the USA and Germany. 

According to this survey, the number of freelancers working worldwide is increasing, and a quick search indicates that there are 22 million freelancers in Europe.  Therefore, the prospects of making a career out of being a self-employed accountant are on the rise.

Furthermore, setting up a freelance accounting practice is achievable for most people with access to a laptop, some basic accounting software and a wifi-connection.

How much can you earn doing Freelance Accounting?

This is the question that everyone wants answered, isn’t it?  You want to know from the start that being a freelance accountant will be financially worth it. 

Looking at some latest statistics paints an interesting picture.  Since a freelance accounting business can have clients anywhere in the world, it is good to note freelancers’ earnings in different countries.  

According to talent.com [2], the average self-employed accountant in 2022 earns 51 675 GBP a year, while in the US, you can earn up to 60 521 US dollars a year. 

N26, while researching freelance salaries in Europe [3], noted that self-employed accountants are amongst the highest paid roles, especially in start-ups.  

Research by Hays Accountancy and Finance found that approximately 54% of European companies expect to recruit accountancy and finance staff between 2021 and 2022.

Person Holding 100 Us Dollar Banknotes

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Are you ready to be a Freelance Accountant?

Most people wanting to start their own business focus a great deal on preparing business plans, marketing and choosing accounting software. While these are all necessary, there is one neglected aspect that is often overlooked.

The emotional challenges of a freelance accounting business can be difficult to manage and needs consideration before you embark on this journey.

Here are a few key factors to consider:

Self-discipline

Consider what you are usually like when trying to kick old habits and start new ones:

  • What is your internal drive? Can you get going all on your own?
  • How disciplined are you to continue despite obstacles that you encounter?
  • Do you lose motivation after a short time?  

These questions will help you understand where your self-discipline requires some work. 

Being self-disciplined can be the difference between whether you succeed or struggle with freelancing as a mode of work 

The importance you place on financial freedom

Considering this element will tell you a great deal about whether you will continue when things do not go according to plan.  

Whether your ultimate goal is to become someone who can create wealth for yourself, or you just want to earn a good living, being financially free has to be high on the list of desires for freelancers.

If you start a new business after working for an employer, you need to consider that many benefits that you are used to will no longer be available. 

If those benefits are important to you, you will need to provide them as part of your business budget.

Bonuses, car allowances, paid leave, and medical insurance are all perks you may lose as a self-employed accountant.

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Final Thoughts

There are many considerations to consider when deciding to become a self-employed accountant. Still, by diligently following the few steps listed here, you can soon find yourself settled and ready to begin.  

If you truly want to be self-employed, few things are more rewarding than working on your passion every day, along with clients that you truly want to work with.

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” 

 

–  Jack Welch

 

 

Article Sources:

[1] https://medium.com

[2] https://uk.talent.com

[3] https://n26.com

[4] https://www.accountancyeurope.eu

[5] https://europa.eu

[6] https://www.irs.gov/