Starting an Accounting Firm in 2025
Happy New Years Friends!!!
I hope the past 2 weeks brought some relaxing and peace to store up as we enter this coming season. For me, we kicked off the holiday with almost everyone in our house contracting pink eye within 6 hours of each other on Dec 22nd, but THEN it was very relaxing and rejuvenating. :o)
Starting a Firm in 2025?
If taking the first step to starting your own accounting / tax / CAS / fractional whatever firm is on your 2025 resolution list, and you don’t know where to start, here are the 5 simple foundational steps to building the foundation of your firm:
In this order (I know this because I did it in the wrong order when I started my firm):
Register your LLC / PLLC / PC with your Secretary of State
How you need to register your firm, specifically as an accountant or CPA, will be up to the regulations in your state. So do your research! For example, in Idaho, I have to be a PLLC as a licensed professional. In California, I think you need to be a PC. In Texas, I don’t think you can even call yourself an accountant if you’re not a CPA (so if you live there, maybe come up with something clever, like “Master of Money” or “Duchess of Dollars”)
Google “Secretary of State register a business in [your state]”.
Time commitment: 30 min - 2hrs + research (depending on how complicated your state government makes it)
Get an EIN from the IRS
Once your LLC / PLLC / PC has been approved (it usually takes a few weeks), and not a moment sooner, register for an EIN number. Why not a moment sooner? Because you need to register your EIN under your legal business name. If the state comes back and denies your business name for whatever reason, you now have an EIN for a business name you don’t own.
No, you don’t technically need an EIN right now, but you will if/when you convert to an S-corp. If you wait until then, you’ll then have to open up a new bank account under the new EIN, which is a bigger hassle. This also keeps your SSN off your firm’s 1099s, which I like.
Here: https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number
Time commitment: 15 min
Get a business checking account
Pick your favorite bank and make an appointment. Bring your drivers license, Articles of Organization (from #1) and SS-4 / EIN letter (from #2).
Get business insurance
You’ll want general liability, E&O (errors & omission), and maybe some cyber protection. Check out your current personal insurance provider to see if they have a business arm, AICPA (if you’re member), Hiscox, etc. If you’re not taking on new clients yet, you can hold on this until you’re ready to onboard.
Pick a bookkeeping software
If it were me here, I would pick this software with my future clients in mind. I like living in one software and one software only with my clients (but that’s me and my efficiency / lazy mind).
Or, if you’ve never even seen the inside of QBO / Xero / Freshbooks, this could be a great time to explore and experiment to see what platform you like. Make sure you sign up as an accountant through their partner program. I think the 3 platforms I’ve mentioned will give you a free subscription (and training) for your own firm.
Is there more to do after that? Totally. But this is your starting foundation.
Just take it one step at a time and you’ll get there.
And if you’re in freak out / overwhelm / procrastination mode and want comradery, I’m planning on registering for a new LLC today for the things I plan to build for The 15-Hr Accountant. I’ve registered LLCs before and it still feels scary and hard and overwhelming. What if this thing flops? Is this a stupid idea? Can I just push this to next week? All the things…I get it. Hit reply and let me know. We can be accountability buddies.
Now go forward and take a tiny step!
Erica