How to Start an Accounting Firm in the US
How to start an accounting firm comes down to ten decisions: entity and registration, state board permits, IRS registrations, insurance and engagement letters, services, pricing, clients, software, cash planning and your first hire. This guide covers each, with a 90-day plan.
How to start an accounting firm comes down to ten decisions: entity and registration, state board permits, IRS registrations, insurance and engagement letters, services, pricing, clients, software, cash planning and your first hire. This guide covers each, with a 90-day plan.
Last updated: September 2026
Starting a firm is an operations problem, not a technical one
You already know how to do the work. That is the part new firm owners worry about least and the part that causes the fewest failures. What causes trouble is everything around the work: the engagement that was never signed, the fee that was never repriced, the renewal nobody tracked, the prospect who went quiet in March and was never followed up.
So this guide is organized around decisions rather than aspirations. Each of the ten steps below has a page of its own with the detail, the trade-offs and the things that catch people out in the first year. Work through them roughly in order — several of them gate the ones after.
One framing worth keeping: the systems you set up at ten clients decide how painful two hundred clients will be. Almost every process problem a hundred-client firm has was a shortcut taken when there were eleven.
This guide is general information, not legal, tax or insurance advice. Confirm licensing, registration and compliance requirements with your state board of accountancy and the IRS.
The 10-step startup checklist
Each step links to a full page on that topic.
1. Choose and register the entity
LLC, PLLC or a professional corporation, plus the S corp question. State rules decide what is permitted, so check before filing.
2. Get the firm permit and licenses
Individual licensure is not enough. Most states register the firm separately, and the permit usually has to exist before you hold out as a CPA firm.
3. Complete IRS and compliance registrations
PTIN for every paid preparer, EFIN for the firm, CAF for representation, plus Circular 230 duties, a written information security plan and CPE.
4. Buy insurance and build your engagement letter
Professional liability and cyber cover, and a template that fixes scope, fee, responsibilities, liability limits and termination.
5. Decide your services and niche
Two or three services at launch, chosen for cash flow shape as much as for interest, with a niche narrow enough that referrers can match names to it.
6. Set your prices
Price from your own cost and capacity, use fixed fees for repeatable work, and build packages instead of quoting line by line.
7. Win the first clients
Relationships first, referral partners second, search and paid third. A 30-day plan is on the clients page.
8. Choose the software
Practice management and CRM first, then ledger, tax, documents, e-signature, payments and communication — one tool per category.
9. Plan cash and set up the money side
Business bank account, bookkeeping for your own firm, a tax reserve, and online payment collection so fees do not arrive by check whenever clients feel like it.
10. Prepare for the first hire
Document processes before you need them, watch capacity rather than revenue, and decide what comes off your plate first.
Cost to start an accounting firm
Estimated ranges only, to help you build a budget. Actual costs vary widely by state, services and choices — get real quotes before planning around any figure here.
| Item | Typical range (estimate) | Notes |
|---|---|---|
| Entity formation and state filing fees | $50 – $500 | Varies by state; annual report fees recur |
| Registered agent | $0 – $300 per year | Skip only if you are comfortable with a public address |
| Firm permit and license fees | $50 – $500 per year | Set by your state board; renews separately from your individual license |
| Professional liability insurance | Quote required | Driven by revenue, services, limits and claims history |
| Cyber liability insurance | Quote required | Often bundled with professional liability |
| Tax software | Varies widely by volume | Per-return and unlimited models differ sharply at low volume |
| Ledger platform (firm's own use) | Low monthly | Partner programs often reduce cost for client files |
| Practice management and CRM | Monthly subscription | Compare how the price behaves as you add people |
| Website and domain | $100 – $3,000+ | A simple credible site beats an expensive delayed one |
| Legal review of templates | $300 – $2,000 | Engagement letter and operating agreement review |
| Hardware and security tools | $500 – $3,000 | Laptop, second monitor, password manager, backup |
| Working capital | 3–6 months of personal costs | The single most protective line in the budget |
Estimates for budgeting only. No figure here is a quote, a benchmark or a statistic.
Buy vs start an accounting practice
Both routes work. They fail for different reasons.
| Factor | Start from scratch | Buy a practice |
|---|---|---|
| Upfront cost | Low — mostly time and small fees | High — purchase price, often part financed or earn-out |
| Time to first revenue | Slow; depends on your network | Immediate; clients transfer on completion |
| Client fit | You choose every client | You inherit the mix, including clients you would not have taken |
| Pricing | Set correctly from day one | Often inherited below market, needing careful repricing |
| Main risk | Not finding enough clients | Clients leaving during transition |
| Systems | Clean setup, your choices | Migration from whatever the seller used |
| Best suited to | Owners with a strong network and patience for the ramp | Owners with capital who want scale immediately |
Your first 90 days
Assumes you are working on the firm most days.
Days 1–30: make it real
Register the entity, apply for the EIN, start the firm permit and any IRS registrations, open the bank account, get insurance quotes, and have the engagement letter template reviewed. Begin outreach in week one — do not wait for the website.
Days 31–60: build the machine
Set up practice management and CRM, import the clients you have, template your two main services, write the onboarding workflow, connect payments, and publish the essential website pages. Keep having conversations daily.
Days 61–90: deliver and correct
Serve your first clients through the workflows you built rather than around them. Track time to find out whether your fees are right, fix the two steps that broke, and set the recurring reminders for your own renewals.
Launch checklist you can copy
Paste this into your task list and give every line a date and an owner. Nothing here is optional except where your state says otherwise.
- Entity registered and operating agreement signed
- EIN issued and business bank account open
- Firm permit application submitted to the state board
- PTIN active for every paid preparer
- EFIN application submitted well before the season
- Professional liability and cyber insurance bound
- Engagement letter template reviewed by an attorney
- Written information security plan documented and in use
- Services defined and priced, with packages written down
- Practice management and CRM set up, with onboarding workflow built
- Ledger, tax, document storage, e-signature and payment tools chosen
- Website live with service pages and a way to book a call
- Google Business Profile claimed and completed
- Own-firm bookkeeping and tax reserve running from the first invoice
- Recurring reminders set for every renewal date in the firm
How much do CPA firm owners make?
Owner earnings vary enormously and any single figure would be misleading, so treat published averages with care. What is more useful is understanding what drives the number in a small firm: realized fee per client, the proportion of recurring revenue, how much owner time goes into work someone cheaper could do, and write-offs from scope that was never agreed.
Two firms with identical revenue can leave the owner with very different incomes because one repriced annually, collected on time and delegated compliance work, while the other absorbed out-of-scope requests and prepared returns personally. The operational habits in this guide are the earnings lever, far more than the top-line client count.
Run your new firm on Remindoo from day one
Remindoo is practice management and CRM for accounting firms: client records and pipeline, client onboarding workflows, white-label engagement letters, task and deadline management with automated reminders, team capacity planning, roles and permissions, online payment collection via Stripe, Xero and QuickBooks integrations, email communication, and an AI assistant and dashboard.
Setting it up before your first client is a couple of hours. Your onboarding runs the same way every time, engagement letters go out before work starts, the firm's own renewals sit alongside client deadlines, and the leads you are having conversations with this month are still in the pipeline next month.
Remindoo is built by a practicing chartered accountant who runs a 40-person accounting firm, so the workflows come from running a practice rather than from a product roadmap.
Remindoo does not prepare or file returns and has no IRS integration. It is the layer that keeps the firm organized around the tax and ledger software you choose.
The full guide, topic by topic
Legal structure and registration
LLC vs PLLC, S corp election, firm permits, non-CPA ownership, EIN and naming rules.
IRS and compliance checklist
PTIN, EFIN, CAF, Circular 230, WISP, FTC Safeguards, peer review and CPE.
Insurance and engagement letters
What to include in an engagement letter and which cover to buy first.
Services and niche
What to offer, bookkeeping vs tax profitability, niches, payroll and advisory.
Pricing accounting services
Fixed fee vs hourly, value pricing, packages and repricing.
Get your first clients
Referrals, SEO, LinkedIn, ads and a 30-day acquisition plan.
Software and tech stack
What to buy by category, and how to compare practice management platforms.
Hiring and scaling
First hire, offshore teams, first tax season, acquisitions and exit planning.
Frequently asked questions
How much does it cost to start an accounting firm?
A lean cloud-based firm can launch on registration fees, insurance, software and a simple website, but the figure that matters is working capital — several months of personal costs while revenue ramps. Use the estimate table above to build a budget from real quotes.
Can I start an accounting firm without a CPA license?
You can generally offer bookkeeping, and tax preparation with a PTIN, without a CPA license. You cannot call the firm a CPA firm, sign attest reports or imply CPA status. Enrolled agent status covers IRS representation. Confirm the boundaries with your state board.
Is it better to buy a practice or start one?
Buying gives immediate revenue at high cost with transition risk; starting is cheap and slow and depends on your network. Buy if you have capital and want scale now; start if you have relationships and can tolerate a ramp.
How long does it take to become profitable?
It depends almost entirely on how quickly the first clients arrive, which depends on your network rather than your marketing spend. Plan cash for a longer ramp than you expect and start client conversations in week one.
How much do CPA firm owners make?
Too variable for a meaningful single figure. Earnings are driven by fee realization, recurring revenue share, delegation of compliance work and how much out-of-scope work is absorbed unbilled rather than by client count alone.
Do I need an office to start an accounting firm?
Usually no. Many US firms operate virtually with secure document exchange and video meetings. If you take space, check landlord insurance requirements and whether a local business license or home-occupation permit applies either way.
What software should I set up first?
Practice management and CRM, before the client count makes migration painful. It is the only system that knows every client, service, deadline and person, and the others connect around it.
When should I hire my first employee?
When capacity signals repeat — consistently over your planned hours, queued work, deadlines met by overtime — and the work driving it is recurring rather than a one-off surge. Have several months of the cost available first.
Run your new firm on Remindoo from day one
Client CRM, onboarding, engagement letters, deadlines and payments in one system before client number one arrives.