In the early stages of their career, accountants normally work at a company. They’d gain experience there until they become managers, then executives. However, a lot of sacrifices are involved in making that happen. Like any other employee, accountants sacrifice most of their time for work. Their duties never cease as long as businesses operate.
The tax period is the busiest time for them. Working overtime is inevitable, even sleepless nights. Can they have a healthier working schedule then?
If they become self-employed, they can have more control over their time. It’s not necessarily an easier path but more fulfilling for accountants who’d rather not be stuck in a routine. Working overtime may still be inevitable from time to time, but at least, they are their own boss. If self-employment feels right for you, here’s what you need to note before starting:
Freelancing vs. Starting Your Own Business
Starting as a freelancer is promising. From 2020 to 2021, 365,480 new businesses were started in Australia. The increase rate in new business grew by 3.8%. Over 270,000 businesses closed down, but that isn’t surprising due to the pandemic.
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Still, many new businesses emerged despite the situation. That means you already have a market for your freelancing career. Accounting is crucial for small businesses because it ensures their tax compliance. An accountant also handles their payroll department.
Freelancing lets you exercise control when selecting projects and clients. It allows you to stick to the ones that appeal to your needs. For example, if you only want to offer bookkeeping services, you can target small businesses looking for someone who’d reconcile bank transactions and record journal entries. You may steer clear of bigger clients looking for an auditor.
Starting your own accounting firm requires more experience. Though freelancing is technically a business as well, it doesn’t require a college degree. You can start freelancing as soon as you get out of high school. After all, bookkeepers don’t have to be certified accountants. You can get an associate degree to boost your marketability, but your skills are more important than your education.
On the other hand, accountants finished an accounting degree and took the board exams to be certified public accountant (CPA). The scope of their job is more diverse. They can be an external or internal auditor, forensic accountant, bookkeeper, or a freelance accountant. With their own company, they can target bigger businesses or self-employed high-profile individuals.
Services You Can Offer
If you’re to freelance, bookkeeping should be included in your services, even as a CPA. It’s the most basic accounting need of small businesses. Bookkeeping covers a variety of services, such as:
- Handling accounts receivable and accounts payable
- Bank reconciliation
- Payroll, and;
- Financial report preparation
To get an idea of how much you’ll charge, check out the rates of local bookkeepers and payroll companies. You should charge lower than they do, but don’t undervalue yourself. Set competitive rates, and charge your clients either hourly or a flat monthly rate. Consider charging extra fees for transportation, for example, if your clients ask you to come to their office.
If you’d self-employ as a CPA, the most important service you should offer – aside from bookkeeping- is income tax preparation. Businesses of all sizes demand it. When you’re already an established accountant in the industry, you can specialize in a specific function, such as:
- Forensic accounting
- Managerial accounting
- Information technology
The advantage of CPAs over bookkeepers is their value. Because of their education and more extensive skills, CPAs can charge higher. Instead of an hourly rate, they charge a retainer’s fee.
Luckily, you don’t have to wait to become a CPA before starting your accounting career. As long as you’re good at bookkeeping, you can offer your services, whether you have a degree or not. That way, you can gain experience even before studying to be an accountant.
By the time you become a CPA, your network has already grown. It might be easier to start your own accounting firm as a result. You can use your young age and well-developed skills as your strongest selling points. It may attract clients from the Millennial and Generation Z groups, the ones who are gravitating toward business instead of employment.
It’s definitely beneficial to be a self-employed accountant, but not easy. It’s not a shortcut to success. Even as your own boss, you can still experience challenges managing your time and handling client demands. But those challenges will make you grow. Every bookkeeper and accountant becomes better with pressure. So don’t expect freedom and fun in your self-employed journey. Instead, expect lots of learning curves and exponential growth.