How to Start a Freelance Accounting Business

Whatever industry you work in, freelancing can offer flexibility, variety and independence. When it comes to the financial sector specifically, freelance accountants continue to be in high demand. Whether supporting larger accountancy practices or working directly with small businesses, the flexibility and cost-effectiveness of working with a freelance accountant is appreciated by many.

As with all career decisions, however, the decision to become a freelance accountant shouldn't be taken lightly. You may be giving up job security, you may initially not earn as much as in an employed position, and you may lose the benefits that permanent employees take for granted. So, what factors should you take into account before making the leap, and how do you actually get started?

Is freelancing right for you?

First things first, it's important to be clear about what it means to be freelance and determine whether it'll work for you. Working as a freelance accountant offers many benefits. You can work when and where you want; you can adapt your workload to suit your situation and invest in training to help you develop in the direction of your choosing. Importantly, you are your own boss, so you have control over who you work with and what type of work you choose to do.

Having said that, it's essential to be aware of the potential downsides. Top of the list is that your earnings may no longer be consistent each month, and, as an accountant, you may have incredibly busy times followed by much quieter months, which will need to be budgeted for.

You will also no longer be entitled to benefits such as employer pension contributions and health plans. The social side of freelance work also shouldn't be underestimated as you may find yourself working alone more often and, without colleagues and management teams around you, it'll be a case of motivating yourself to ensure work is completed on time. You'll also need to source your own clients, so you'll need to be comfortable promoting yourself and the work you do.

If these factors seem manageable, it could be time to go freelance.

What does freelance accounting entail? 

As a freelance accountant, you'll likely be working with small businesses and start-ups that want to avoid the costs associated with employing an in-house accountant and sole traders who need support with their finances and tax returns. 

• Common tasks carried out by freelance accountants include:
• Managing payroll.
• Submitting VAT and Corporation Tax returns.
• Preparing and filing accounts and tax returns.
• Analysing spending and budgets.
• Auditing financial information.

Freelance accountants will also often deal with HMRC on behalf of their clients. This could cover everything from filing accounts to handling an investigation.

Freelance bookkeeping vs accounting

Many freelance accountants also work as bookkeepers, so it's worth considering this as a means of boosting your income when you start out. As a bookkeeper, you'll be charged with keeping records of your client's financial activity, managing payments and receipts, filing invoices and the like. Typically, bookkeepers are responsible for collating all the business's financial records and preparing accounts up to trial balance stage, at which point the accountant will take over.

While you don't legally need any formal qualifications to work as a bookkeeper, if you have a recognised qualification, such as from the IAB or ICB, it will likely be easier to attract clients, and you'll be able to charge a higher rate.

It should also be noted that as a freelance accountant and bookkeeper, you may also need to register with an anti-money laundering scheme.

How to set up as a freelance accountant

As with all businesses, it will take time to establish yourself as a freelance accountant, but there are a few steps to follow to ensure you progress in a way that gives you the greatest chance of success.

1. Gain the right qualifications

Firstly, make sure you have the necessary qualifications or begin working towards them. For example, the Association of Accounting Technicians qualification is the minimum required for a qualified accountant and can be a good entry route into the industry. If you're planning on working with overseas clients, the Association of Chartered Certified Accountants is one of only two qualifications, along with CIMA, that will allow you to legally sign off accounts for organisations around the world.

2. Decide on your service offering

The qualifications you have will also help you to decide on the services you plan to offer. While you may choose to offer general accounting services across all industries, focusing on a niche will help you gain industry-specific expertise, which in turn can help to attract more clients.

3. Set your prices

This can be one of the trickier parts of starting out as a freelancer as you want to offer competitive pricing in order to attract clients, but you also want to run a successful business. Here you have the option of a more traditional hourly rate, or you could try offering service bundles for a monthly retainer. The latter means you have much more certainty over your monthly incomings, and your client can benefit from knowing what their outgoings will be. 

Suggest offering a range of services that can take the pressure of a small business, such as providing reports, managing bill payments, account reconciliations, and even advising on business growth.

Read more about how to price your services here.

4. Meet your legal obligations

When starting out as a sole trader, you'll need to register as self-employed with HMRC to submit your tax returns and pay the relevant tax. As you'll be holding personal financial information about your clients' finances, you also need to register with the ICO to ensure you comply with all the relevant data regulations.

Also, in the UK, it is a legal requirement for anyone who provides accounting and/or bookkeeping services to be registered with a recognised supervisory authority, such as the AAT, ACCA, CIMA or CIT.

5. Get insurance

As an accountant, you'll be handling sensitive information and potentially offering financial advice, so insurance can be a sensible option in case you're ever seen to have made a mistake. For example, professional indemnity insurance can protect you if you're accused of giving incorrect advice that leads to a client's financial loss.

6. Use your network

If you're thinking about going freelance, the chances are you have a fair amount of experience in the accountancy sector, so don't be afraid to reach out to your contacts and let them know what you're planning. Previous employers can be a great help when it comes to landing that first client – they know your abilities and how you work, so they will often keep you in mind, even if it's just to offer cover during busy times. Similarly, if you had an internship or work experience, these can be valuable contacts. And don't forget family and friends who can often need help with self-assessments and small business accounts.

7. Develop your online offering

While local businesses and contacts can be a great source of work, geographical constraints have largely been removed when it comes to accounting services, thanks to cloud software and digital communications. To ensure you're reaching as wide an audience as possible, a strong online presence is essential. The core of this will be your website, including key information such as your qualifications, experience, client testimonials and contact details. You should also carry this messaging and branding over to your social media presence. So, make sure your LinkedIn profile is up to date and consistent and look at joining relevant groups and sharing your thoughts in discussions. This will all help to boost your profile.

8. Create a marketing plan

Once you have set your brand and messaging, this will feed into your wider marketing plan. This could cover everything from ordering business cards to planning an advertising campaign, perhaps in the local media or online. You should include costs against all the items you wish to achieve to clarify what is affordable.

9. Find the right accounting software

The right accounting software is important for any new business, but as a freelance accountant, it's essential you choose a simple to use cloud-based platform that is easily accessible, accredited and secure. AccountsPortal, for example, lets you and your clients log in at the same time to review and adjust records in real-time. It is available 24/7 and accredited by the ICB as robust and reliable, all for just £10 a month. You can even enjoy a free trial for 30 days to make sure it fully meets your needs.

In addition to the standard partner programme, the white label solutionallows you to re-brand AccountsPortal, and get the following benefits:

• Hosted on a completely separate domain, with no links back to AccountsPortal. • Your own logo, which replaces the AccountsPortal logo for the login, logout and register screens • Ability to change the header colours in the accounting application. You can change the background colour of the header, and the main navigation tabs to anything that you want so that it matches your own website or colour scheme. • Integrated help documents, branded with your name. • All emails are sent from your email address, and not AccountsPortal's.

This means that you have the opportunity to have a fully branded accounting application, and offer your clients a seamless online experience.

More information how we can help your accounting or bookkeeping practice is available at www.accountsportal.com/accountants.

10. Ask for feedback from clients

Once your first clients start rolling in, it's important not to become complacent; things can change quickly, so managing your business profile and ensuring you continue to attract clients is critical. So, for example, try to get feedback from every client. This could be as quick and easy as an automated feedback survey, or you could personally reach out for a testimonial. Sharing positive responses on your website and across your social channels is a great way to keep your business in prospective clients' minds.

Average Freelance Accountant Salary 

Of course, one of the biggest deciding factors in whether or not you should go freelance will probably be how much you could earn. While there are no guarantees and factors such as your experience, the services you plan to offer, and your location will all play a part, you can expect hourly rates of between £11 and £50. If you opt for the service bundle route, fees will depend on the services offered and the complexity of the accounts but expect between £50 and £300 per client. 

You can also expect to take on one-off or annual jobs such as preparing tax returns or submitting year-end accounts. Typical fees for a tax return would be in the region of £150-£250, again depending on the complexity.

To find out more about how AccountsPortal can support you as you move into freelance accounting, start a 30-day free trial or get in touch with us via our support pages.