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Is it time to start your own accounting firm?

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Now may be the perfect time to start an accounting firm.

With client demand growing and many baby boomer CPAs hitting retirement age, there is certainly no shortage of work, and advances in technology have lowered the cost of launching a new business. 

But experts say there is much to consider before accountants jump into the deep end, such as their personal financial bandwidth, whether they want to do the technical work in their firm or just manage it and where to find support. Perhaps the best place to start is figuring out why you want to start your own firm in the first place.

By and large, there are two kinds of firm founders, experts say: Those who are natural-born entrepreneurs, and those who become founders as a result of some professional or personal change that requires them to have greater flexibility.

The first group can look like accountants who have lots of ideas but who may not be able to implement them at their current firm. Or it could be an accountant who sees what their employer is doing but believes they could do it better.

The second group can look like accountants who are starting families or battling an illness, or accountants whose firms are undergoing a structural change like a merger.

Time management, clock, team

Kirill Makarov/kirill_makarov – stock.adobe.com

Logan Graf, founder of the Graf Tax Co. in Austin, Texas, said, “You have to want it. I would not recommend starting a firm unless you have a burning desire for doing something on your own.”

He added that firm founders must be inquisitive—they need to be willing to test things out and experiment where things can be improved. 

Miklos Ringbauer, treasurer and secretary for the California Society of CPAs and founder of MiklosCPA, recommends that firm founders work for someone else first, learning the ropes in another firm and determining what they want to do differently.

“You don’t know what you don’t know,” Ringbauer said. 

Stephen Buller, founder of Buller Accounting in Tacoma, Washington, added, “Learn the ins and outs, the rights and wrongs, while getting paid for it.” 

Will I have enough clients?

Before actually starting a business, any savvy founder should consider whether there is a market for their services. For accountants, that translates to whether there are enough clients.

The answer is “not only applicable for accountants, but for all startups – it’s an unknown,” according to Ringbauer.

That’s where professional experience and understanding comes into play, he said. Accountants should consider a couple of factors: their personal financial obligations—whether they have children, student debt or a mortgage—and their personal savings. 

If you don’t have enough runway to sustain yourself for a year or two, then you may need to plan longer or save more, Ringbauer said.

One common practice among accountants is buying a book of business to secure an established set of clients. However, Angie Wood, founder of Wood CPA in Edina, Minnesota, advises against it.

“Don’t buy a book of business,” she said. “I learned that the hard way. You don’t need to.”

Many clients will make the switch to the new firm, Wood explained, “but a lot of them choose to leave shortly after because it’s a different process. It’s a different person, it’s a different relationship. Fees change. The relationship is so personal, so it’s just not worth buying a book of business because clients can leave. There’s no guarantee.”

How do I do this legally?

The legal requirements for setting up a CPA firm vary from state to state, and the requirements are different for a CPA firm versus a firm offering bookkeeping services. Ringbauer recommends that accountants do their due diligence and research on their state’s requirements, but he offered a few tips and tricks. 

“Some states limit certain things,” he said. “For example, in the State of California a professional limited liability company, PLLC, is not allowed, domestic or foreign, to operate and offer services in the state. Versus in Texas, you can be an LLC. So understanding state rules and regulations is incredibly crucial.”

In addition, many state boards of accountancy have special language requirements that must be included in a firm’s bylaws or incorporation documents. He also reminds accountants that you can always incorporate later.

“Depending on the type of services you offer, you may not necessarily need to incorporate upfront for liability purposes,” Ringbauer explained, using his own experience as an example. “For a very long time, I was doing the self-employed Schedule C. Then when our clientele started to change — when things got more complicated, when I ended up doing offshore voluntary disclosures, very scary IRS compliance stuff with clients having hundreds of thousands of dollars of penalties because they were not right previously, filing their returns with their foreign assets — I decided that this was too much risk for me and incorporated.”

Ringbauer recommends hiring a lawyer, “so you understand what your requirements are and the pitfalls or benefits of the different entities. … A lot of people think that just because you are a CPA, you know the tax laws.”

Do I need to hire?

The next big question for firm founders to consider is if and when to hire.

Buller said it’s important for the firm owner to first decide whether they want to continue as the main service provider in their business. Do they love actually doing the technical work, or is their goal to manage a firm and its employees? 

“You should hire your first employees when you have a good process and good systems in place to deliver the service that you can charge for and that will make it easy for you to train an employee to generate revenue for your business,” Buller said.

“If you’re going to hire somebody, it basically means you’re taking a pay cut and a bunch of your time is then going to be spent training this person,” he continued.

For most accountants, the easiest and most logical first hires are usually admin and a bookkeeper.

“Affordability is a factor, and then what are the tasks I wanted to get rid of?” Wood said. “Tax was my strong suit, so I held on to that for the longest and found somebody else to do the other things that I didn’t really enjoy doing as much.”

What if I’m not ready?

Founding a firm isn’t for everyone, of course. And there are those who start their firm but realize that it isn’t the right fit for them. But most people quit because of some personal circumstance, not because they weren’t making enough money, according to Ringbauer. Thankfully, accountants have a safety net in that they can always go back to being an employee. 

“The most beautiful thing in accounting is that if you are fit to do the practice, you will always make enough money to put food on the table,” he said. “It’s a secure and very viable business.”

Throwing in the towel on a firm isn’t a mark of failure, either, Buller said.

“I think it’s a good idea to have this attitude of, ‘How could I replace myself in this business in the long run?'” He said. “And then you start thinking about all these systems and processes you need to create to make it so somebody else could do the work, and then immediately you have started to create some value that you could actually sell to somebody. That’s one exit plan.”

Do I have enough support?

There is a litany of resources available to accountants looking to start their own practice, including the American Institute of CPAs and state CPA societies, which host networking events, workshops and post reading materials. Even insurance companies have boilerplate engagement letters and guidance support.

Then there’s an accountants’ personal network, which can include friends, colleagues, partners and sole practitioners. 

Wood said she experienced overwhelming support and advice when she told her network she was starting her own firm. “If I would have known how much support I would have gotten from people, I would have done this so much earlier,” she said.

Graf said he received support from other tax experts on Twitter when he was starting out. And in October, he created his own online community of firm founders called Counter, which now has over 200 members.

At the end of the day, for most accountants, there will never be a perfect time to start a firm, according to Buller—you need to just do it.

“It’s kind of like having a kid,” Buller said. “People can tell you there’s challenges. People can tell you how hard it’s going to be or various things you’re going to have to do. And you’re going to have to be ignorant about it, no matter what, to some degree, until you do it yourself.”

“That’s one of our biggest hurdles,” Ringbauer said. “We believe that we need to know everything, and we are afraid of reaching out for help. The best thing is, most accountants now are looking at each other as support rather than competition.”

He continued, “Of course there are articles and books, but the most important thing to understand is that books give you the basic idea, but your own unique life experience and circumstances will dictate what may work from it or what doesn’t.”

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Senate Dems probe IRS chief nominee Billy Long’s campaign donations

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Billy Long speaking at a Donald Trump campaign event
Billy Long speaking at a Donald Trump campaign event

Al Drago/Bloomberg

The week before confirmation hearings for President Donald Trump’s nominee for commissioner of the Internal Revenue Service, former Missouri Congressman Billy Long, Democrats in the Senate are asking questions about the timing of campaign donations he received immediately after his nomination.

In a letter sent last Thursday to seven different companies — including an accounting firm, a tax advisory services firm, and a financial services provider — Democratic Senators Elizabeth Warren, D-Massachusetts, Ron Wyden, D-Oregon, and Sheldon Whitehouse, D-Rhode Island, questioned donations that the companies and some of their employees made to Long in the month and a half after his nomination in early December of 2024.

Between Dec. 4, 2024, and the end of January 2025, the letters said, Long’s unsuccessful 2022 campaign for Senate received $165,000 in donations — after nearly two years without receiving any — and his leadership PAC received an additional $45,000.

The donations allowed Long to repay himself the $130,000 balance of a $250,000 loan he had personally made to his campaign back in 2022.

(Read more:DOGE downsizing, IRS commissioner switch complicate tax season.“)

The senators’ letters described the donations as “a highly unusual and almost immediate windfall,” and characterized many of the donors as being “involved in an allegedly fraudulent tax credit scheme.”

“The overlap between potential targets of IRS investigations and the list of recent donors heightens the potential for conflicts of interest and suggests that contributors to Mr. Long’s campaign may be seeking his help to undermine or avoid IRS scrutiny,” the letters said; adding, “This brazen attempt to curry favor with Mr. Long is not only unethical — it may also be illegal.”

The senators then warned, “There appears to be no legitimate rationale for these contributions to a long-defunct campaign other than to purchase Mr. Long’s goodwill should he be confirmed as the IRS commissioner,” before appending a list of approximately a dozen questions for the donors to answer.

The donations were originally discovered in early April by investigative news outlet The Lever, which the senators noted in their letters.

After Long left Congress in 2023, he worked for a tax consulting firm, including promoting the COVID-related Employee Retention Credit. In early January, Sen. Warren sent a letter to Long questioning his tax credentials and promotion of the ERC.

The IRS has run is now on its fifth acting or regular commissioner since President Trump announced his intention to nominate Long; a number of the commissioners resigned or were removed over policy differences with the administration and its Department of Government Efficiency.

Long’s confirmation hearing before the Senate Finance Committee is scheduled for this Tuesday, May 20.

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Trump berates Republicans to ‘Stop talking,’ pass tax cuts

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Donald Trump listens to a question while speaking to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C.
Donald Trump

Al Drago/Bloomberg

President Donald Trump called on members of his party to unite behind his economic agenda in Congress, putting pressure on factions of lawmakers who are calling for last-minute changes to the legislation to drop their demands.

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

Trump sent the post from Air Force One after departing the Middle East as the House Budget Committee was meeting to approve the legislation, one of the final steps before the bill can move to the House floor for a vote.

House Speaker Mike Johnson has set a goal to pass the bill next week before the House recesses for its Memorial Day break.

However, the the bill failed the initial committee vote — typically a routine, procedural step — with members of the party still sparring over the scope of the cuts to Medicaid benefits and how much to raise the limit on the state and local tax deduction.

Narrow majorities in the House mean that a small group of Republicans can block the bill. Factions pushing for steeper Medicaid cuts and for an increase to the SALT write-off have both threatened to defeat the bill unless their demands are met.

“No one group gets to decide all this stuff in either direction,” Representative Chip Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Trump’s social media muscle and calls to lawmakers have previously been crucial to advancing his priorities and come as competing constituencies have threatened to tank the measure.

But shortly after Trump’s Friday post, Roy and fellow hardliner Ralph Norman of South Carolina appeared unmoved — at least for the moment. Both men urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time”

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97% say CPA firms not using tech efficiently says survey

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While CPA firms far and wide have made major technology investments over the years, the vast majority of accountants say they’re not being used to their full potential. 

This finding comes from a recent survey undertaken by CPA.com and payment solutions provider Bill. The 400-person poll found that nearly all respondents, 97%, say they use technology inefficiently and that additional training is needed to maximize return on investment. Further illustrating the point, 43% of respondents said that technology is making them do more manual work, not less, something. Becky Munson, an Eisner Amper partner specializing in outsourced accounting services, believes this reflects a failure of training and change management, as she has seen many who disliked a technology change develop manual workarounds specifically to avoid using the new solutions. 

“We see employees make workarounds with tech stacks, which makes headaches that I think align with this 43%. We train people on new things, we ask them to use them, and they keep doing what they were doing before and only use the technology as much as they have to [in order to] move things along while you have people well trained on the software keeping up,” she said in a webcast on Thursday about the survey. 

Inefficient

Ariege Misherghi—senior vice president and general manager of accounts payable, accounts receivable and the accountant channel—said the issue isn’t just because of firms but also vendors that don’t provide enough support, and may not necessarily understand the profession in the first place. 

“Too often I think tools aren’t fully aligned with the workflows they’re meant to support. In SaaS they talk about product-market fit, but in this profession it’s not just that but also product-firm fit, and maybe product-profession fit. Not every tool marketed to accountants was built by people who truly understand how this profession works: the rhythms, the regulations, the stakes, the relationships, all of that. And even the greatest tools can fall short if they’re not implemented with a deep understanding of how firms really operate,” she said. 

And sometimes the inefficiencies come from both sides at once: the survey found that only 37% of firms require clients to use their tech stack, something that Munson said “breaks my heart” as “it is so low.” A streamlined, established tech stack is needed to achieve true economies of scale, but to get there firms need to standardize their data, and to do that firms need to make sure their clients’ data is also standardized, which usually means integrated tech stacks. 

“If you have all these different clients with all these different technologies, even if your own tech stack is standardized the systems they use is different, so the kind of data you will get will be different, and the work you need to do to make it work with your data is different, and your team spends a lot of time spinning their wheels,” she said. “Once you get standardized, where everything back and forth from clients is the same, you get to see how well the teams can do their work.” 

One source of inefficiencies is a rushed implementation. Munson said that, too many times, firms are so eager to get a solution working that they don’t pay attention to all its capacities, just the ones they need right now, but once the basics are down firms still don’t circle back on the rest of the features and how they can be used to drive efficiency. 

“Most of us have been through an implementation, either in the practice or with a client, where you’re just like ‘anything to get it working. Forget about all the fancy things it does. We just needed to do the basics right,’ and then we never circle back on those better, more efficient processes. We get to sort of minimal viable, and then we forget to come back and give it an extra polish. And so what we see there is the processes get written for that basic piece, and we never update,” she said. 

But this is part of what both speakers believed was the larger problem of firms getting lost in the details of their tech stacks and not taking a broader, more holistic approach, which would enable more efficiencies. The key component to managing technology effectively, Munson said, is looking not at individual solutions here and there but thinking of the system as a whole. 

“Often, what happens is something’s wrong or something is troublesome in some way. And so [we say] what can we do to fix that one thing? And we don’t think about it holistically and get all the right folks in there so that we’re solving for the right pain points,” she said. 

Misherghi agreed, and added that this holistic extends not only to the technology a firm already has but the solutions they plan to purchase in the future. When evaluating what technology they need, she said leaders need to think not in terms of specific point solutions to particular problems but things that can support the entire workflow—plus, the onboarding, training and ongoing support from the vendor. 

“Don’t just look for features, right? Look for solutions that support your workflows from providers that understand you. For firms, onboarding and training and optimization can’t be an afterthought. They’re essential to realizing value. I think this is where vendor partnerships matter. Firms seeking the strongest results aren’t just using software, they’re collaborating with their providers, they’re staying educated, they’re making sure their tools evolve alongside their needs. The best outcomes happen when your technology partner acts like part of your team, not just part of your toolkit,” she said. 

Misherghi said that the more successful firms she’s seen think less in terms of performing particular tasks but designing an entire system that, through automation, can do those tasks for them. It is less about plugging holes and more about developing a full infrastructure. The survey found that 74% of participants have a detailed plan to add new services in the next 12 month; Misherghi noted that, among these firms, 86% have a detailed technology roadmap, which is “a wonderful mark on the evolution of the profession we’re seeing.” 

She said a good tech roadmap is more like a service design blueprint versus a shopping list. Successful firms, she said, are not just chasing features but designing intentional workflows and systems capable of scalable service delivery. Similarly, she stressed that the provider should be more than just a vendor but a strategic co-architect that can help with growing pains. 

Misherghi said this approach will become especially relevant as AI becomes more common, as integrations will be key to their effective use, which means thinking in terms of the whole system to understand where those integrations should take place. Right now, she said, people think of AI in terms of analyzing data or extracting fields, but with the rise of AI agents will require firms to focus more on coordinating between them. 

“I think the next big leap is when those systems don’t just talk to each other, they act on each other’s behalf. I think the next big inflection point will be moving from automated steps to autonomous workflows, where AI agents aren’t just analyzing data or extracting fields but actually orchestrating tasks across tools based on firm policies and context and that will change the role of the accounting profession: its less time doing the work and more time designing the system for how everything works together. So the firms that will be thriving are those who are building strong infrastructure now because that is what AI needs to deliver on its core value,” she said.

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