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How to become a freelance accountant

6th Apr 2023
Brought to you by
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Award-winning accounting software for small business owners and their accountants and bookkeepers.

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Whether you’re already working in an accountancy practice or you’re considering a career change from another industry, you may be interested in becoming a freelance accountant. Speedy internet connections, flexible working options and cloud-based accounting software have made it easier than ever to go it alone, but getting started can be daunting. Here, award-winning accounting software provider FreeAgent discusses what you need to know.

Laptop and freelancer toolbox

What is a freelance accountant?

A freelance accountant, known as a sole practitioner, is an accounting professional who is not employed by an accountancy firm or other business. Instead, they work directly with their own portfolio of clients, potentially covering a broad spectrum of services, from managing payroll to auditing financial information.

Their clients tend to be small businesses that don’t have the resources to employ full-time accounting staff, or individuals who have complex income structures and need help with their tax returns. This means that most freelance accountants will tailor their services to their clients’ needs. 

7 steps to becoming a freelance accountant

1. Get the right qualifications 

If you’re not already a practising accountant, you should start by gaining qualifications from a recognised professional body. Strictly speaking, you don’t need to do this in order to call yourself an ‘accountant’ in the UK, but it’s an essential step in gaining the knowledge and skills required to do the job. It’s also a great way to signal your expertise and gain the trust of prospective clients. The Association of Accounting Technicians (AAT) offers a wide range of courses to suit all experience levels.

A qualification from a professional body such as the Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants in England and Wales (ICAEW), Institute of Chartered Accountants of Scotland (ICAS) or Chartered Institute of Management Accountants (CIMA) will allow you to call yourself a ‘chartered accountant’, which, unlike ‘accountant’, is a protected term in the UK. You can’t call yourself a ‘chartered accountant’ unless you hold the required qualification.

2. Establish your business

To become a freelance accountant, you’ll need to either set up as a sole trader or register a limited company,  keeping the differences between the two business structures in mind. 

As you’ll be dealing with clients’ personal and financial data, it’s a legal requirement that you register with the Information Commissioner’s Office (ICO). If you’re not qualified with an approved supervisory body such as AAT, ACCA, ICAEW or CIMA, you’ll also need to register with HMRC under Money Laundering Regulations.

3. Arrange insurance

Before you start working with clients, you should make sure you have the right insurance in place. You’ll need to consider professional indemnity, public liability, cyber and contents insurance, depending on the services you plan to offer. If you’re considering taking on additional staff, take a look at employers’ liability insurance as well.

4. Develop your business model

Next, you can start thinking about building your business model. This is where you decide on the services you want to offer, the kinds of clients you want to work with and your pricing structure. 

For example, some sole practitioners work across a number of professions while others pick a few industries to specialise in. Some offer service bundles while others prefer to tailor their pricing to each client. Having your business model pinned down will make it much easier to find your niche and market yourself effectively.

5. Think about your systems and processes 

One of the main benefits of being a freelance accountant is that you get to set your own agenda. Not only can you pick and choose the clients you want to work with, but also the kinds of services you offer and the way you work with those clients. 

One key element to consider is the bookkeeping process. Think about whether you’ll require your clients to maintain their own books or whether this is a task that you’ll take on. If it’s the former, make sure you partner with suitable accounting software, like FreeAgent, that will allow you to submit VAT and Self Assessment tax returns directly to HMRC, keep up to date with clients’ data in real time and automate many of your day-to-day admin tasks.

You should also consider your wider tech stack, i.e. the other bits of software you’ll need to carry out your day-to-day work, from sending emails to hosting online meetings. Choose platforms that will help you deliver your services effectively and efficiently.  

6. Start finding clients

Long gone are the days of only advertising your services in the local paper. Finding prospective clients is typically all about establishing a strong online presence - and it doesn’t have to cost a fortune. 

Start by building a website that highlights your services and expertise, and use search engine optimisation (SEO) techniques to help ensure your website is surfaced on Google for common search queries. Take a look at our guide to local SEO for accountants and bookkeepers to find out more.

Social media channels such as LinkedIn, Facebook and Twitter are also great tools for self-promotion. You can use them to grow your network, build your credibility and share updates about your business. Check out our social media tips for accountants and bookkeepers

7. Get set up with accounting software 

The development of cloud-based accounting software has transformed the way sole practitioners run their businesses, helping them house all their clients’ information securely and access it from any location. A good software solution should help with all the heavy lifting of the day-to-day bookkeeping admin, allowing you to focus on providing services that will add value to your clients’ businesses. 

Find out more about FreeAgent and discover the powerful features that can help you and your clients flourish.

This article was originally published on the FreeAgent blog.