5 steps for starting your own practice

Starting out in practice is an exciting time, but it can also be a daunting prospect – especially if you aren’t quite sure how to navigate the ins and outs of setting up your own business.

From establishing a strong base of clients and getting the right technological solutions for growth to putting policies in place to mitigate the risk of money laundering, there are a host of factors to consider.

Financial Accountant has covered some of the key points to consider when starting your own practice:

1. Get a practising certificate and the right experience

Holding a practising certificate is non-negotiable. If you’re planning to offer accountancy services to the public for reward in the UK, you need to obtain a practising certificate.

The IFA outlines the necessary criteria to qualify, including that you need to have studied UK tax and UK law, and must have at least three years’ UK experience in three or more of these main areas:

• Financial accounting
• Management accounting
• Assurance
• Taxation
• Data processing

To view the full list of eligibility criteria, visit the IFA Practising Certificate webpage.

“Having a practising certificate adds great value to your business,” says Ermal Krutani, Managing Director at Devonports LAS Accountants.

An IFA practising certificate means you can sign off documentation supporting loans and mortgage applications with banks and building societies, and can conduct charity independent examinations.

“I also recommend belonging to a professional accountancy body and ensuring you have good all-round knowledge of accountancy practice,” Ermal says. “It’s preferable to have had previous experience in practice. If you don’t, I’d recommend getting this experience in practice first before starting your own business.”

2. Take out professional indemnity insurance

Professional indemnity insurance (PII) protects you in the event that a client claims your service or advice resulted in their financial loss. Insurance can cover acts, errors and omissions from services such as:

• Loss of documents or data
• Breach of confidentiality or privacy – for example, failing to adequately secure private customer information
• Defamation stemming from your service or advice

When considering the right PII for your business, take into account your scope of work, the specific risks in your business and the limits of liability. This is some of the key information that should be communicated to a broker or accountancy insurance specialist who can determine the most suitable PII for your needs.

3. Set a foundation for growth

Building a solid base of clients requires time, commitment and perseverance.

Promoting your practice through LinkedIn and other social media platforms – particularly if you can leverage marketing tactics to reach your target market – is a great place to start.

You could also elevate your profile and engage prospective clients by posting valuable content on industry developments and specific accounting issues. This can also be a great way to stay connected with existing clients who follow you.

New clients will also come on board as your business grows organically.

“Existing clients recommending you is the most common way to grow your client base,” says Ermal.

To aid with this growth, you could also consider asking specific clients to refer you on or including a note that you welcome referrals in your email signature.

4. Create a smooth onboarding process

Onboarding is the first experience a new client will have with your business.

It sets the tone of your relationship, so it’s critical to make it a smooth, easy and engaging process.

Clients will want to know the parameters of your service, so be sure to cover topics such as the main inclusions in your accounting service, your and the client’s expectations and how these can best be aligned.

Establishing a set procedure for onboarding ensures there’s consistency across your clients. There’s no use reinventing the wheel every time a new client comes on board, so streamlining the process can make it a seamless experience as well as freeing up your time.

It might also be worth preparing a templated resource for each new client to take home. This could cover the main points they need to be across and any key reminders about your way of working.

5. Create a clear and compliant anti-money laundering procedure

Conducting customer due diligence is an absolute necessity for any prospective client. It’s a regulatory requirement that helps your practice assess the risk of taking on a client and can protect your business from money laundering.

“It’s really important to get it right from day one,” says Ermal. “Follow the IFA or your professional body’s guidance on anti-money laundering (AML).

Customer due diligence should involve steps such as checking the prospective client’s background and their connections to other businesses, forming a detailed understanding of their income and gaining professional clearance from their previous accountant.

“It might also be worth attending appropriate courses with the IFA to update yourself on AML,” Ermal says.