What Do I Need before I’m Ready to Open My Own Accounting Practice?

About eight percent of accountants in the United States are self-employed, reported U.S. News & World Report. Do you want to be one of them? If so, start planning for your future success now. To open and run your own accounting practice, you will need a CPA license, an education and experience, for starters.

Becoming a Certified Public Accountant

One of the most important credentials you will need to succeed in opening and managing your own accounting practice is a license as a certified public accountant (CPA). Having a license will qualify you to file reports with the Securities and Exchange Commission, and the credential can also make you more appealing to public- or private-sector employers from whom you can gain valuable experience in the early years of your career. Holding a CPA license shows prospective clients that your professional accounting services are worth the money they will pay. To become a CPA, candidates must meet eligibility requirements, including education and experience, as established by their state’s Board of Accountancy. Eligible candidates can then sit for the four-part CPA exam created by the American Institute of Certified Public Accountants, which evaluates knowledge of accounting theory, practices and relevant business laws.

The Five-Year Education

You may be able to open an accounting practice with only a bachelor’s degree in accounting. However, most states require that CPA candidates have at least 150 semester hours of college study, about 30 semester hours more than the typical bachelor’s degree in other majors. That means you should expect to spend an extra year earning your undergraduate degree. Some schools offer five-year accelerated dual degree programs or one-year accelerated master’s degree programs so that students can earn a graduate degree for the extra time they invest preparing for the CPA exam. Holding an advanced degree will also allow you to learn more advanced accounting principles and be better prepared to handle the wide range of situations you will encounter when you open your own practice.

Gaining Professional Experience

If you’ve just graduated college, you will need some experience before you’re ready to take on the challenges of running an accounting firm. Sources like The Wall Street Journal recommend aspiring accounting entrepreneurs take some time to build their experience with established companies first. You’ll get the benefit of on-the-job training, and as an insider in an accounting practice, you can learn what to do – and what not to do – to run your business efficiently. Most states require a least a couple of years of experience before you can take the CPA exam anyway, and some employers may be willing to pay for the cost of your exam.

By getting an education, gaining experience and passing the CPA exam, you can prepare yourself for the challenges of opening a CPA practice. However, you will still need to invest funds and time into planning and growing your business, including writing a business plan and marketing yourself.

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