Your 6-Step Roadmap to Becoming a Successful Freelance Accountant

In this guest post, Ryan Grundy of Sage reveals key milestones on the way to starting a freelance accounting business, from getting qualified to setting your rates and self-marketing.

The role of an accountant is often thought of as a stressful one. And though it is challenging, the type of accountant you choose to be will massively shape your experience. Today, going freelance is an attractive option. After all, freelance accountants are in demand, and you get the flexibility of setting your own hours and choosing which clients to work with. Cloud-based accounting software also lets you streamline tasks and work from anywhere.

Think going freelance might be for you? Let’s take a look at the benefits, challenges, and top tips for going solo.

What Does a Freelance Accountant Do?

Freelance accountants work for themselves, rather than being employed by an accountancy firm or a company’s accounts department. They provide general or specialist accounting services to businesses or individual clients. This could be a side hustle or a full-time career. It’s often small businesses and sole proprietors who hire freelance accountants because they don’t have the resources to complete accounting tasks themselves. But large businesses may also use freelance services to help them out during busy periods.

If you’re hired by a business, you’ll typically assist with activities such as financial reporting, payroll, and taxes. You may conduct financial reconciliations and internal audits and make sure that the firm’s financial operations remain compliant. Working for individual clients, you could be hired to help with taxes or manage household bills and expenses. You might also work on behalf of a charity, a non-profit organization, or a public entity like a school or a hospital.

The role is often confused with that of a bookkeeper, but they are quite different. A bookkeeper keeps track of day-to-day financial matters, monitoring cash flow, and maintaining records. An accountant may do all of these things, but they will also provide in-depth analysis of a company’s finances, prepare financial statements, and act as an advisor on financial matters. If you’re interested in becoming a bookkeeper rather than an accountant, you can find tips on how to start a bookkeeping business here.

Benefits of Being a Freelance Accountant

It’s relatively quick and simple to set yourself up as a freelance accountant and start taking on work. Your overhead expenses will be small since you’ll likely be working from home or at your client’s workplace — all you need is a laptop and business insurance.

Salaries vary widely depending on experience, specialism, and even your location. According to Glassdoor, the average annual salary for a freelance accountant is $52,298. Upwork lists the cost of hiring a freelance accountant at $12–$32/hr.

As with all freelancing jobs, you can set your own hours to fit around other commitments and make sure you have a good work-life balance. You can also pick your projects, focusing on the aspects of accountancy that interest you. And thanks to modern technology, you can work for clients anywhere in the world.

This may mean specializing in payroll and supporting businesses through their payroll year end checklist. Or, it could mean becoming an expert in tax compliance and ensuring your clients file their taxes correctly. There are plenty of areas to choose from, so you can find your niche and specialize in what excites you.

The good news is that businesses will always need accountants — and the accounting industry has a pretty high turnover rate, so it shouldn’t be too difficult to find work. It could even open doors for you, including ones that lead to a high-paying career as a full-time consultant or financial planner.

Challenges of Being a Freelance Accountant

As a freelancer, you’ll be self-employed. In the U.S., this means you’ll need to pay SE tax to the IRS, including your own contributions for social security and Medicare. You’ll also be responsible for keeping your clients compliant, so you need to stay informed of any changes to tax regulations in the country or region you operate. This could be changes to tax within individual states in the U.S.

Although there’s the potential for high earnings, it takes time to build your client base, and some clients expect to pay freelancers a low fee. Plus, you won’t receive employee benefits like sick pay or vacation pay. It’s a good idea to start off by taking on side projects while in full-time employment.

Because there’s no guaranteed income from freelance work, you won’t want to turn down any opportunities — but taking on too many projects can lead to burnout. You’ll also have to get used to working alone, without the social interaction of a regular office environment.

How to Succeed as a Freelance Accountant

Here are six top tips for making a success of your freelance accountancy business.

Get Qualified

An affinity with numbers is obviously the main requirement for a freelance accounting career, but the more qualifications you have, the more marketable you become. Although freelance accountants in the U.S. are not required by law to have any specific credentials, it’s worth getting a CPA (certified public accountant) qualification.  

Use a Professional Setup

Before you launch your business, make sure you have the right setup. A strong internet connection is essential, as is software for time tracking and workflow management, invoicing tools, and a payment processor. Don’t forget about insurance — consider professional indemnity, public liability, cyber, and contents insurance.

Charge the Right Amount

How much you charge will depend on your skills and the type of clients you’re working for. But it’s best to do some research into average salaries and figure out how much you need to earn. Don’t sell yourself short, but don’t price yourself out of the market either.

You can earn a steadier income by offering service bundles or specific services for a monthly retainer. Always consider how you can upsell to your existing clients.

Promote Yourself

Get your name out there whenever possible. Start a blog, post on social media, send out an email newsletter, and make sure you have a professional-looking website. Do some networking, and list yourself on hiring and crowdsourcing platforms.

It’s a good idea to put together a sales and marketing plan for your business and identify potential clients. Once you have some happy customers on board, ask for reviews and testimonials.

Don’t Push Yourself Too Far

With no set hours, it can be tempting to work around the clock when you’re trying to grow the business. To avoid burnout, make yourself a schedule and stick to a certain number of hours per day or week. Go out and get a coffee or a sandwich at lunchtime, just like you would in a traditional workplace. You could arrange a regular catch-up with other local freelancers.

Don’t Forget Your Own Taxes

You’ll need to look after your own financial affairs and taxes, as well as other people’s. Keep organized records of your earnings and outgoings ready for tax season. If you’re based in the U.S. you can read more about the taxes you’ll need to pay here. When you’re self-employed, you can write off certain expenses as tax deductions. This includes business-related hardware and software, traveling to visit clients, marketing costs, and a percentage of your household bills.

Final Thoughts

As long as you have the right skills and resources, freelance accounting can be a rewarding and lucrative career. You’ll need to be self-motivated and have the discipline to stick to a manageable schedule to avoid burnout. Promote your services as widely as possible, and always look for ways to add value. Make sure you’re charging a fair amount for your work, and don’t forget that you can write off some of your expenses when you file your tax return.

Author Bio

Ryan Grundy is an experienced writer of business content at Sage with a background that spans both brand and marketing agencies. He has helped tech businesses find the right words across a range of formats, from web and social to campaigns and concepts.