Are you thinking about starting a CPA firm? If so, you’re in the right place! If you’re dreaming of working for yourself, it’s a big step with lots of different moving parts. From choosing your business structure to finding your first clients, every decision that you make matters.
This checklist will walk you through everything you need to start a CPA firm, including setting up your firm, building your brand, hiring help, and making sure that your business is protected. One of the most essential steps that is often overlooked is making sure that you’re covered if something goes wrong. That’s where CPA professional liability insurance comes into play, and we’ll cover what it is, why it matters, and how to find the right policy for your firm.
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The first step in starting a CPA firm is deciding what kind of work you want to focus on. Will you specialize in tax planning, audits, bookkeeping, or business consulting? Your services should be in alignment with your skills, interests, and long-term goals. Once you’ve picked a niche, consider who you want to serve, whether it's small business owners, individuals, startups, or even nonprofits.
Clearly defining your services and the ideal clients you want to work with will help you shape your entire business plan. It will give you guidance on how you market yourself, what you charge, and how you present your brand to the world.
CoverHound Tip: If your firm wants to offer specialized services, be sure your insurance policy reflects that. CoverHound can help you compare different options that are tailored to your risk profile so your coverage matches the work you actually do. Contact CoverHound today!
Once you’ve decided on the kinds of services you’ll provide, the next important step in starting a CPA firm is setting up your legal and financial structure. Start by choosing a business entity that best fits your needs. The most common options include an LLC, PLLC, or S Corporation. This decision will affect how you're taxed and how your personal assets are protected.
Next, register your business with your state and apply for an Employer Identification Number (EIN) through the IRS. You’ll also want to open a dedicated business bank account and choose accounting software that makes it easy to manage your books, track expenses, and send out invoices to your clients.
CoverHound Tip: Choosing the right business structure will help limit liability, but it doesn’t replace the protection of CPA professional liability insurance. Even with an LLC, you could still face lawsuits tied to your professional work. Make sure your business is well-protected before you take on your first client. Find out more by contacting CoverHound.
As you start a CPA firm, think about where and how you’ll work. Do you want to set up a home office, rent a shared workspace, or meet with your clients in person at a public location? There’s no one-size-fits-all rule when it comes to your setup. It just depends on your needs and the types of clients you plan to serve.
You’ll also need the right tools to run your business smoothly. That might include tax software, secure file-sharing platforms, a phone system, and video meeting tools. Make a checklist of everything that you might need so that nothing slips through the cracks.
CoverHound Tip: Whether you are working remotely or in an office, you still need to make sure your business property and cyber risks are covered. Explore additional business insurance policies through CoverHound.
When starting a CPA firm, protecting your business from day one is one of the smartest things you can do. Insurance might not be the most exciting part of launching your new practice, but it’s definitely one of the most important.
The first policy to prioritize is CPA professional liability insurance. This coverage is specifically designed to protect you if a client claims that you made a mistake in your work, whether it's a tax error, a missed deadline, or a financial loss. Even if you didn’t do anything wrong, you could still face a lawsuit. Legal fees alone can be a substantial financial burden, and this policy will help cover those costs.
On top of CPA professional liability insurance, you’ll also want to consider general liability insurance (especially if clients visit you at your office location), cyber insurance to protect all of your sensitive data, business property coverage to cover your equipment, and workers’ compensation if you plan to hire any employees.
Once you’ve covered the basics of starting a CPA firm, it’s time to think about how to bring in new clients. Start by creating a simple and easily repeatable intake process. This can include templates for proposals, engagement letters, and onboarding documents that set the right expectations and help keep everything organized from the start.
Next, build a basic marketing plan that will help people find you. That might include a professional website, local SEO so your firm shows up in searches, a strong LinkedIn presence, and a referral plan for happy clients to spread the word about your services.
As your list of clients grows, you might reach a point where doing all the work yourself isn’t realistic. That’s when it’s time to start building your team. Think about what kind of help you need the most. Maybe it’s an admin to manage your schedule, a bookkeeper to handle the day-to-day bookkeeping tasks, or another CPA to share the client workload.
When you’re ready to bring someone on, make sure you have a clear onboarding process in place, along with a payroll system and a basic training program. A smooth start will help your team support your business (and your clients) the way you want them to.
Hiring is also going to change your insurance needs. If you haven’t already, now’s the time to think about workers’ compensation and review your CPA professional liability insurance to make sure it still fits your growing firm.
Yes. Even if you're a solo CPA or only work part-time, you can still be held responsible for a client’s financial loss. One lawsuit can bring major legal costs, even if you didn’t do anything wrong.
Some states or clients may require it, but it’s always a smart step for any CPA who works with clients or gives financial advice.
Professional liability covers your services and advice. General liability covers things like slip-and-fall accidents or property damage.
Your needs depend on your revenue, client size, and services. CoverHound makes it easy to compare CPA professional liability insurance quotes so you can find the right fit.
Starting a CPA firm is an exciting move that takes thoughtful planning, the right tools, and solid protection. You’ve worked hard to build something of your own, and now it’s time to ensure it’s protected from the very first day.
CPA professional liability insurance isn’t a nice-to-have. It’s a must-have. Even one client complaint or legal claim can put the entire well-being and future of your business at risk.
Are you ready to check business insurance off your list? Visit CoverHound to compare CPA professional liability insurance and other essential policies, all in one place.
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