How to Start an Accounting Practice: Step-by-Step Guide for New Firm Owners

TL;DR

To start an accounting firm, follow these key steps:

• Conduct market research to identify service gaps and define your target market.

• Choose the right business structure, most new firms form a limited liability company for liability protection and to keep personal assets safe.

• Fulfill all legal requirements, including registering your business, obtaining an employer identification number (EIN), and securing licenses and business insurance.

• Define your ideal client and decide which accounting services to offer (e.g., tax preparation, payroll services, financial statements).

• Create standardized service packages and set a competitive pricing structure to ensure strong profit margins.

• Build your brand, set up a website, and establish an online presence to attract clients and build credibility.

• Invest in tools like accounting software and practice management software to streamline operations.

• Focus on client satisfaction, build your team strategically, and continuously improve your systems.

Launching your own accounting practice takes planning, but with the right foundation, you can grow a profitable, flexible firm that serves small businesses and other niches with confidence.

Starting your own accounting firm is a bold yet rewarding move. Whether you’re a certified public accountant ready to branch out or a practicing accountant with dreams of building something long-term, launching your own practice offers more than just professional freedom, it gives you the chance to shape your future, work with multiple clients, and create true work-life balance.

But here’s the truth: to start an accounting firm that actually lasts, you’ll need more than a few clients and a laptop. It takes careful planning, an understanding of legal requirements, and a clear vision for the accounting services you’ll provide. You’ll need to make key decisions about your business structure, whether to form a limited liability company for liability protection, how to handle client onboarding, and what pricing structure supports healthy profit margins.

This step-by-step guide breaks down everything you need to know to launch a new accounting firm from scratch, covering essentials like registering your own firm, choosing the right technology, setting up your business bank account, and crafting a strategy to attract clients and grow your client base.

Whether you plan to serve small businesses, focus on tax preparation, or offer specialized payroll services or assurance services, this guide will walk you through every part of the process, so you’re not just starting a new business, but building a long-lasting and profitable one.

Step 1: Conduct Market Research

Before you invest in an office lease or start buying office supplies, take time to understand your local market. Market research is one of the most key factors in setting up a successful accounting firm, yet it’s often skipped in the excitement of starting a new business.

Look at what other accounting firms in your area are offering. What accounting services do they provide? Are they generalists, or have they carved out a niche serving small businesses, real estate investors, or medical professionals? Knowing this helps you identify gaps and tailor your own service offerings to better attract clients.

Market research also helps define your target market. Are you looking to serve local entrepreneurs? Mid-sized businesses? High-income individuals? The clearer you are, the easier it becomes to win clients and position your own accounting firm as the better fit.

Don’t stop at competitors, interview potential clients to learn what they actually need and value. Many business owners want more than just tax preparation; they’re looking for help with financial statements, cash flow insights, or even payroll services. These insights will shape everything from your pricing structure to your future marketing strategy.

By understanding both the supply and the demand in your area, you’re not guessing, you’re making data-backed decisions that increase your odds of launching a profitable own practice.

Step 2: Choose the Right Business Structure

Choosing the right business structure is one of the first major decisions when you start an accounting firm. It affects your taxes, paperwork, and, most importantly, your personal assets.

Many firm owners choose to set up a limited liability company (LLC) because it creates a separate legal entity. This gives you liability protection, meaning your personal assets like your home or savings are generally safe if your own firm is ever sued or faces financial trouble.

While a sole proprietorship may seem easier to set up, it offers none of that protection. It also blurs the line between personal and business finances, something that can get messy, fast.

Forming an LLC also adds credibility with potential clients and vendors. It signals that you’re serious about your business and intend to operate professionally. Most states make the LLC formation process fairly straightforward, and it’s often worth the small upfront cost.

Bottom line: A strong legal foundation protects you from risk and sets you up for sustainable growth as your new accounting firm expands.

Step 3: Handle Legal and Regulatory Requirements

Next, you’ll need to meet all legal requirements to officially operate your accounting firm.

Start by registering your new business with your state or local government. Then, apply for an Employer Identification Number (EIN) with the IRS. Even if you’re not hiring right away, most accounting firms benefit from having an EIN for things like opening a business bank account or filing tax returns.

In addition, if you’ll be filing tax documents on behalf of clients, you’ll likely need an Electronic Filing Identification Number (EFIN). Each location where you perform this work must have its own EFIN.

Depending on your jurisdiction, you may also need a general business license or specific permits for offering accounting services, payroll services, or assurance services. Regulations vary by state, so it’s crucial to check local rules or consult a legal advisor.

And don’t forget business insurance. Policies like workers compensation insurance and professional liability coverage protect your client work, client data, and help you stay compliant as your team grows.

By handling the regulatory requirements early, you avoid future delays, fees, or legal headaches, and position your own accounting practice as trustworthy and prepared from day one.

Step 4: Define Your Ideal Client

Not every business owner will be the right fit for your own accounting firm, and that’s okay. One of the smartest things you can do before launching is to define who you actually want to serve.

Your target market could include small businesses, high-net-worth individuals, startups, medical professionals, or even e-commerce brands. The goal is to focus on potential clients whose needs match your skills, experience, and business model.

For example, if you’ve worked extensively with financial statements and tax returns for independent contractors, you might focus on serving freelancers and gig workers. Or, if you understand healthcare compliance, you could build a niche around doctors and clinics.

Clear client targeting helps shape your messaging, marketing strategy, and pricing. It also makes it easier to win clients because you’re not trying to be everything to everyone, you’re solving a specific problem for a specific group.

When you understand your ideal client’s pain points, you can build your accounting services around meeting those needs more effectively than larger firms that take a one-size-fits-all approach.

Step 5: Decide Your Service Offerings

Now that you know who you’re serving, it’s time to define exactly what services you’ll provide. Your service offerings will become the foundation of your own practice, and they should align with your strengths as well as client demand in your local market.

Most accounting firms start with core services like:

• Tax preparation

• Bookkeeping

• Financial statements

• Payroll services

• Budgeting and forecasting

• Assurance services

As your client base grows, you can expand into advisory services or industry-specific solutions. Many certified public accountants also specialize in niches like real estate, law firms, or tech startups.

The more tailored your services are, the easier it becomes to attract clients and deliver results that exceed client expectations.

Keep in mind: specialization doesn’t limit you, it helps you stand out. In fact, some of the most profitable firms are those that niche down and serve fewer, but more valuable, clients.

Step 6: Create Service Packages

Once you’ve outlined your accounting services, group them into standardized packages. This makes it easier for potential clients to understand what they’re getting, and helps you manage your own firm more efficiently.

Many accounting firms use a three-tiered pricing structure, Basic, Standard, and Premium, each offering a different level of support. For example:

• Basic might include monthly bookkeeping and tax preparation

• Standard could add payroll services and quarterly financial statements

• Premium might include budgeting support, ongoing advisory calls, and faster response times

Standardizing your service offerings helps you complete tasks faster, improves consistency, and aligns your team around clear deliverables. It also helps manage client expectations, especially as you grow and begin handling multiple clients.

Most importantly, packages let you sell value instead of time, something that will increase client satisfaction and make your new accounting firm easier to scale.

Step 7: Set Competitive Pricing

Your pricing can make or break your own accounting practice, so it’s worth putting serious thought into.

Most accounting firms now prefer fixed-fee pricing over hourly billing. Clients like the predictability, and it gives you more control over profit margins. For example, instead of billing $150/hour, you might charge $1,200/month for a bundled service package.

When deciding your fees, consider:

• Local competition

• The complexity of your services

• Your level of expertise

• Your target market’s willingness to pay

Also, avoid undervaluing your work. It’s smart to set a minimum job value so you’re not taking on low-revenue client work that drains your time and energy.

If you’re unsure where to start, research what other CPA firms or certified public accountants in your region charge. Many seasoned professionals even reach out to existing clients or peers to gauge fair pricing.

Pricing should reflect the results you deliver, not just the hours you spend. When done right, it creates stable cash flow, sets clear expectations, and supports long-term growth for your own firm.

Step 8: Choose a Business Name and Brand Identity

Choosing the right name for your own accounting firm isn’t just a formality, it’s a strategic move that impacts how potential clients perceive your business.

Your firm’s name should be:

• Clear and easy to pronounce

• Available as a domain name

• Reflective of your services or niche

Avoid names that are too vague or overly complex. For example, “ClearView Financials” is more memorable and brandable than “J. Smith Accounting & Tax Services LLC.” If your goal is to serve small businesses or offer specialized accounting services, choose a name that helps you establish credibility from day one.

Once you’ve chosen your name, lock down your web domain, social media handles, and register your business name with local authorities.

Remember, your brand identity extends beyond the name, it includes your tone, logo, website design, and how you communicate with prospective clients. Consistency across all of these touchpoints helps your new business look professional, trustworthy, and ready to grow.

Step 9: Build a Professional Online Presence

Today, if you’re not online, you barely exist to potential clients. A strong online presence is essential to attract clients, even through word of mouth referrals, because people will Google you first.

Start with a professional website that highlights:

• Your accounting services

• Your ideal client and industries served

• Testimonials or client satisfaction quotes

• A clear contact or booking form

Include your business bank account details only in secure client portals, but make sure your site reflects that you’re a trustworthy and modern accounting firm. Also, ensure your site is optimized for SEO so you appear in local searches like “accountant near me” or “CPA firm for small businesses.”

Don’t stop at your website. Claim your Google Business Profile, and set up pages on LinkedIn, Facebook, or Instagram, depending on where your target market hangs out. Even a simple presence with consistent branding and occasional updates can help you win clients over time.

Bonus: Invest in basic practice management software or CRM tools that integrate with your website to streamline client communication and lead follow-ups.

A strong online footprint doesn’t just help you attract more clients, it signals that your own practice is ready for business in a digital world.

Step 10: Set Up Your Tech Stack

Technology is no longer optional, it’s a key aspect of running an efficient, modern accounting firm. The right technology not only saves time but also improves accuracy, client communication, and compliance.

At the core of your tech stack should be robust accounting software like QuickBooks, Xero, or FreshBooks. These tools help manage financial statements, track income and expenses, and streamline tax preparation. For payroll services, consider integrations like Gusto or ADP.

To manage multiple workflows, practice management software is essential. These platforms help schedule tasks, store client data, and ensure your team is on the same page. Look for solutions that allow for document sharing, secure messaging, and deadline tracking, especially if you’re working with multiple clients or remote staff.

As your own firm grows, think beyond the basics. Add e-signature tools, proposal software, secure client portals, and integrations with your CRM or calendar. This not only enhances client satisfaction but frees you up to focus on strategy instead of admin tasks.

Investing in technology early will make your new accounting firm more agile, scalable, and professional from the start.

Step 11: Document Your Internal Processes

One of the most overlooked steps when you start an accounting firm is documenting how things get done. But if you want your own practice to run smoothly, and eventually scale, clear, repeatable processes are essential.

Start by mapping out your most common tasks, like:

• Onboarding new clients

• Preparing monthly financial statements

• Filing tax returns

• Delivering payroll services

• Following up on invoices or client requests

Write down each step in plain language so anyone on your team (now or in the future) can follow it. Use practice management software to house and organize these documents, and update them regularly as your systems evolve.

This documentation will help you complete tasks faster, reduce errors, and onboard future staff or contractors with ease. It also ensures consistent delivery of services, which is key to meeting client expectations and building trust with existing clients and potential clients alike.

Think of it as building the operating manual for your business. It may feel tedious upfront, but it’s one of the smartest moves you can make for long-term success.

Step 14: Identify and Specialize in a Niche

While many accounting firms start off as generalists, the most profitable ones often evolve into niche specialists. Specializing allows your own firm to stand out, deliver deeper value, and attract more ideal clients with less effort.

Popular niches include:

• Small businesses in specific industries (e.g., restaurants, construction, e-commerce)

• High-income individuals needing advanced tax preparation

• Healthcare professionals (doctors, dentists, therapists)

• Legal professionals or tech startups

When you focus on a niche, you can refine your accounting services to speak directly to your target market’s needs. This makes it easier to win clients, develop efficient internal processes, and improve profit margins, since specialized expertise commands higher fees.

You’ll also become a trusted resource faster because prospective clients feel you understand their challenges better than a generic provider.

Don’t worry about limiting yourself. You can still work with others outside your niche. But marketing to a focused audience makes your own accounting firm easier to grow, scale, and sustain.

Step 15: Plan for Initial and Recurring Costs

Launching a new accounting firm comes with startup costs, some expected, others not. Planning for these early will protect your cash flow and help you make smarter decisions.

Startup costs typically include:

• Business insurance and registration fees

• A basic website and branding

• First month’s rent for office space (if not working remotely)

• Initial subscriptions to accounting software and practice management software

• Basic office supplies and equipment

• Marketing materials (logo, business cards, ad spend)

Depending on your setup, you can expect to spend anywhere from $2,500 to $25,000 to start an accounting firm. If you’re going lean and remote, it’ll be on the lower end. If you’re hiring early or leasing space, budget more.

But don’t forget recurring costs either. These include monthly software subscriptions, your business bank account maintenance, payroll tools, marketing campaigns, and potential staff salaries or contractor fees.

Understanding these numbers gives you control. It also helps you set a pricing structure that supports healthy profit margins while delivering high-value accounting services.

Step 16: Understand the Benefits of Running Your Own Firm

Starting your own accounting practice isn’t just about control, it’s about freedom, growth, and building something meaningful. One of the biggest perks is work-life balance. You get to set your schedule, choose your clients, and focus on work that energizes you.

Running your own firm also gives you the ability to build long-term equity. Instead of working under someone else’s brand, you create a business that reflects your values and goals, and can eventually be sold, scaled, or passed on.

You also have the power to define your client base. Want to work exclusively with small businesses? Prefer focusing on tax returns or payroll services? You decide. This autonomy helps improve job satisfaction while giving you room to innovate and test new service models.

And let’s not forget the financial upside. When managed properly, with strong profit margins and efficient operations, a successful accounting firm can generate consistent income while giving you the flexibility to grow at your own pace.

Step 17: Build Your Team Strategically

As your own firm grows, you’ll hit a point where doing everything yourself starts holding you back. That’s when it’s time to build a small, strategic team.

Start by identifying what’s slowing you down. Are you spending too much time on admin? Behind on client emails? Struggling to complete tasks during tax season? Hire or contract help in those areas first.

Early hires might include:

• A virtual assistant to handle email and scheduling

• A junior accountant or bookkeeper

• A freelance marketer or content writer

• A part-time client services coordinator

When hiring, make sure your business is properly structured. That includes having an employer identification number (EIN), business insurance, and possibly workers compensation insurance depending on your state laws.

Use practice management software to help assign work, track tasks, and keep your team on the same page. The more organized your internal systems are, the smoother your onboarding and team communication will be.

Remember: building a team isn’t about getting bigger. It’s about creating space, for better service, more revenue, and a stronger foundation for your new accounting firm to thrive.

Step 18: Focus on Continuous Improvement

Building your own accounting firm is just the beginning. The firms that grow, and thrive, are the ones that constantly refine their processes, update their tools, and listen to their clients.

Set regular time aside to review your operations:

• Are your accounting services meeting client expectations?

• Are you using the best accounting software and practice management software for your size?

• Is your pricing structure aligned with your goals and profit margins?

Ask for feedback from existing clients and analyze where you’re winning and where you’re losing time or money. If client communication is falling through the cracks, build a better system. If onboarding takes too long, automate parts of it. If you’re attracting the wrong prospective clients, revisit your niche or marketing strategy.

Also stay current with tax law updates, tech trends, and industry best practices. Many successful firm owners attend workshops, earn certifications, or even speak at professional speaking engagements to stay visible and relevant.

Continuous improvement isn’t about perfection, it’s about progress. It ensures your own practice remains efficient, competitive, and always moving forward.

Frequently Asked Questions

Conclusion: Build Your Accounting Firm with Confidence

Starting your own accounting firm is more than just a career move, it’s a long-term investment in your freedom, your future, and your impact. From choosing the right business structure and fulfilling legal requirements, to defining your target market and setting smart pricing structures, every decision you make now lays the foundation for sustainable success.

The process may feel overwhelming, but each step, building systems, delivering value, refining your accounting services, and growing your client base, brings you closer to building a thriving, respected firm. Whether you’re launching a boutique CPA firm, offering virtual payroll services, or focusing on tax-heavy small businesses, you now have the tools to start with clarity and direction.

Keep learning. Keep improving. And remember: the best accounting firms are built on consistency, credibility, and care, not perfection. With the right mindset and systems in place, your own practice won’t just survive, it’ll grow, attract better clients, and deliver lasting results.

You’re not just learning how to start an accounting firm, you’re building one worth keeping.