In 1898, Christine Ross passed the CPA exam and was the first woman to attain CPA licensure in the United States. Though she scored second or third in her group, according to “Eight Special Women in Accounting” in the Journal of Accountancy, the New York Board of Regents withheld her certificate – number 143 – for more than a year because of her gender.
Things have changed for females interested in careers in accounting. Women now make up 50% of all new CPAs employed by accounting firms, according to The CPA Journal.
Only 22% make it to partner or principal, however, according to a 2017 study by the American Institute of CPAs (AICPA). A key finding in their 2017 CPA Firm Gender Study, conducted by AICPA’s Women’s Initiatives Executive Committee, “was that the larger the firm, the greater the gap in equity ownership. … The level of partnership and ownership for women was lower than for men at all firms, but it was significantly lower at firms with more than 10 owners.”
Part of the reason is that a partnership track can take 10 or 12 years, The CPA Journal noted, often during the part of life when women want to start families and raise children. The solution for many female accountants is to start their own CPA practice.
For those interested in starting their own business, earning a master’s in accountancy online can be the first step toward a satisfying accounting career that also allows for professional independence, entrepreneurship, and work-life balance.
Purchase, Partnership or Sole Proprietorship
Women have options when deciding whether to open their own CPA firms. According to The CPA Journal, three of the most popular are:
- Purchase an existing practice: Buying a practice from a fellow CPA who is retiring or exploring other opportunities comes with a big advantage: an established client list and other assets. This option is also the most expensive way to set up one’s own business and can be too costly for many aspiring independent CPAs.
- Work with a partner: Going into business with someone else is a good way to share startup costs. But a partnership also means splitting revenues and decision-making. Both partners should consider whether such an arrangement would work for them.
- Start from scratch: Building a practice from the ground up is the riskiest option, but also the most rewarding. CPAs who go this route can expect more work up front, but they can also control the pace of their business growth and reap all of the profits. PayScale estimates the average salary for a self-employed accountant at $119,831, as of April 2019.
Before Opening a CPA Practice
A business plan provides a solid foundation for any professional practice.
“A business plan will help you effectively communicate your value to potential clients and staff as you start and grow your practice,” according to CPA Practice Advisor. “A good business plan lays out the goals for your practice and your plans for achieving them. It will take into consideration the demographics of your target clients, your firm’s profile, services offered and other logistics.”
Plans should include:
- An executive summary of your practice and company goals.
- A description of your practice that differentiates you from other CPAs.
- A market analysis that details your competition and areas of opportunity for your business.
- A description of your services.
- An operations plan that shows how your business will run on a day-to-day basis.
- Financial situation and projections, which you will need if you plan to seek funding.
The CPA Journal notes that the business plan should also identify your business structure – whether sole proprietorship, C-corporation, S-corporation or limited liability company (LLC).
Other items that The CPA Journal advises putting on the pre-opening to-do list include:
- Checking local zoning laws if you plan to work out of your home.
- Working with an attorney to ensure that you are in compliance with local regulations.
- Purchasing Errors and Omissions (E&O) coverage, which is required when bidding on contracts.
- Staying on top of all CPE requirements as well as rules and regulations so you don’t miss continuing education deadlines.
- Determining a pricing schedule that is competitive with other local CPAs.
- Doing due diligence and background checks on any staff you may hire.
The CPA Journal also reminds women with solo CPA practices to network, especially with professional women’s organizations, and to promote themselves with a website as well as social media and blog posts.
About the University of North Dakota’s Master’s in Accountancy Online Program
UND’s online master’s in accountancy program offers two tracks that can help graduates succeed in accounting services: a fundamentals track for students without significant undergraduate coursework in accounting, and a practitioner track for those holding an undergraduate accountancy degree. Both can prepare candidates for the CPA exam and provide useful skills for opening an independent practice.
UND’s program has been recognized in the top 5% of business schools worldwide and is accredited by the Association to Advance Collegiate Schools of Business (AACSB). For more information, contact UND now.
Eight Special Women in Accounting: Journal of Accountancy
Considerations for Women Starting Their Own CPA Practice: The CPA Journal
2017 CPA Firm Gender Survey: AICPA
Improving the Advancement and Retention of Women CPAs: The CPA Journal
Average salary: PayScale
Where’s Your Accounting Firm’s Business Plan?: CPA Practice Advisor