Kylie Parker CA – Lotus Accountants

Kylie Parker CA never imagined that she would need to start another business. She had opened her first, Broadway Accountants, in Sydney in 2005. The following year, she decided to join other accounting firms to form a larger practice and, over the next nine years, she helped grow that business from 10 to 45 employees. Then, suddenly, she was out in the cold.

“One of the partners, who was a good friend of mine at the time, confided that he was having an affair,” she says. “When I started to suspect it was with one of our managers I believed the appropriate thing to do was to share my concerns with our HR associate director. I had assumed our conversation was confidential but they immediately repeated it to the partner in question. Six weeks later, I was asked to leave the business because the relationship between myself and the partner was irreconcilable.”

Bad timing

The timing was dreadful. Parker had recently separated from her husband, had two young boys and – receiving less money from the firm on leaving than she had originally paid in – needed to maintain an income.

“It really was the worst time of my life,” she says. “When I decided to start a new business I named it Lotus Accountants because I hoped that, like the lotus flower, something beautiful would grow from the murky depths.”

The need to upskill

Being an accountant was a big help in setting up the business – although Parker did need to familiarise herself with the latest accounting technology.“Being ‘back on the tools’ without a team was probably the hardest aspect of leaving a larger firm,” she says. “Preparing accounts and tax returns myself in Xero, while I rebuilt my client base, was a huge learning curve – so much so that, when my manager joined me, I decided to work for Xero.

“That was an invaluable experience and I loved being able to help other accounting firms to use the software more efficiently. The friends I developed in the online accounting community still make my life much more enjoyable.”

Building a team

Another challenge was putting together the right team.

“It can be difficult to attract professional and technical staff to a smaller firm,” says Parker. “You’re also so reliant on everyone that it can be hard to maintain a level of professional distance and respect.”

However, overcoming these obstacles means she is now enjoying the benefits.

“My income is substantially higher than it was, largely due to leveraging technology and having a lean team,” she says. “We have no administration overheads and our clients appreciate the high level of skill and responsiveness we provide.”

She also has exclusive ownership of the company.

“My experience made me something of a control freak, so I decided against using a unit trust in case co-ownership led to the same lack of recourse if something went wrong in the future.”

Using time wisely

Parker advises anyone who is considering going out on their own to prepare for a drop in salary during the first six to 12 months.

“You will be busy before you know it, so use that time to set-up for growth,” she says. “That means deciding on any areas of specialisation, whether you want your staff to be local or offshore, and the systems you want to use.

“It’s also important to be choosy about the clients you initially take on. You’ll probably be tempted to accept anyone who will pay, but removing less-than-ideal clients later will be draining.”

Rather than giving advice, her networking friends, clients and colleagues helped by providing opportunities.

“Chances to share information through speaking engagements, podcasts and other means have all come from other people’s support,” she says. “I hope I am passing this forward as a way of growing our community.

“When I started in practice, accounting was a siloed and competitive business – but there is so much to go around. The more we share, the more opportunities there are for all of us.”

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Andrew Millington CA – The Accounting Hub

Andrew Millington CA left his job as business advisory manager at Crowe Horwath to launch The Accounting Hub. This was in 2012, and developments in technology played a major role in his decision.

“It was really the advent of innovations like cloud computing and software-asa- service that made it possible,” he says. “In the past, the cost of the infrastructure needed to start out on your own would have been prohibitive.”

“It was really the advent of innovations like cloud computing and software-as-a-service that made it possible [to start my own practice]. In the past, the cost of the infrastructure needed to start out on your own would have been prohibitive”

Instead, setting up The Accounting Hub cost practically nothing.

“I worked at home, used the computer I already had and built the first website for the company myself,” he says. “It wasn’t particularly sophisticated and we updated it as soon as we could, but it did the job.”

Being an accountant also removed a great deal of stress.

“Things like what rate to charge, how many clients you need to cover your overheads and how much you need to pay yourself to survive are second nature to an accountant,” he says. “They’re very basic, but they’re the kinds of things that can cause real headaches for non-accountants.”

His initial intention was to set-up a digital accounting practice that was fully online. However, this was over 10 years ago when clients still expected to meet their accountant face to face.

“Since then, we’ve had a global pandemic that forced everyone to get up to speed with different ways of working,” he says. “Now, when I send out a link to my calendar so that my clients can pick an appointment time, I also give them the option of having the meeting online or in person. Most people choose to meet online.”

The benefit of hindsight

Today, Auckland-based Millington has clients all over New Zealand, and he appreciates the freedom and flexibility that enable him to balance work with the demands of a young family. However, there are things he would do differently if he were starting out again.

“My advice to myself and any other accountants starting out would be to think very carefully about what segment of the market you’re going to work with and then develop the deep expertise that will add value for that particular type of client,” he says. “You also need to recognise that, if you’re bootstrapping a startup, you’re likely to be very small for quite a long time.”

He took the plunge when he was too young to have built up much of a financial safety net.

“If you have outside investment, you can afford to take it slowly as you grow scale,” he says. “My plan was to start making money right away. That didn’t happen quite as I’d hoped and I earned less in the first year than I did when I was employed, but it was enough to keep going.”

The value of a network

One thing Millington wouldn’t change is his decision to join a business network.

“I believe that networking and maintaining business relationships are very important,” he says. “I joined Business Network International [BNI], though there are many other groups to choose from. I met a lot of people there and, while some came on as clients, the real benefit for me was forming friendships with people who had faced the same kinds of challenges.”

He also recommends finding other accountants who are in a similar situation and meeting up from time to time, perhaps as a group.

“This gives you the opportunity to share ideas, news and relevant developments,” he says. “It can get lonely working on your own, and you can also miss out on the kind of information you pick up organically when you’re part of a large organisation.

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Essentials for your own accounting practice

If you’re tempted to go it alone, you’ll find a wealth of practical information on the CA ANZ website, including things to think about before you start your own practice, and the SMP Resource Centre. This includes details of the formal requirements you’ll need to comply with as the owner of an accounting practice.

A Certificate of Public Practice (CPP)

Business owners who are paid for providing accounting services to the public are required to have a CPP. Before you can apply, you’ll need:

• Two years’ acceptable practical experience as a CA
• Evidence of continuing professional development
• Knowledge of either Australian or New Zealand company law and tax
• To have completed the Public Practice Program or its equivalent within the past two years. This is an educational course with two components – e-learning to cover your ethical and regulatory obligations, and a virtual or face-to-face two-day workshop for the essentials of business management essentials.

Professional indemnity insurance

Despite your diligence and care, there’s a chance a client could claim they suffered a financial loss as a result of your poor advice. Professional indemnity insurance provides a safety net by helping to cover legal fees and any compensation.

Obligations as a business owner and employer

Common to all employers, these include workplace safety, people and resource management, personal safety and emergency management.

For more information on starting your own practice, visit us at: charteredaccountantsanz.com

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