How do I set up and register an accounting firm

Setting up an accounting firm is a sequence of registrations that each unlock the next, and most people run them in the wrong order and lose a month. You cannot e-file without an EFIN, the EFIN takes the longest because the IRS runs a background check, and a few states will not let you call yourself an accounting firm until the firm itself holds a permit. Get the order right and you are operating in six weeks. Get it wrong and you are turning away tax-season clients while a form sits in a queue. Here is the working sequence.

Start the two IRS registrations, because they gate everything

Before you form a company, start the two federal preparer credentials, because the slow one has a background check and its clock does not start until you apply.

The PTIN (Preparer Tax Identification Number) is required for anyone paid to prepare federal returns. It costs about $19.75, renews annually, and you get it the same day at irs.gov. Do it this afternoon.

The EFIN (Electronic Filing Identification Number) is what lets your firm e-file. There is no fee, but the IRS runs a suitability check that includes a background and credit review, and approval takes roughly four to six weeks. This is the single longest step in launching a firm, so it goes first even though it feels like it should come later.

Form the entity and get the EIN

With the federal credentials moving, form the company. Most solo and small firms use an LLC: it separates personal assets, is cheap to file ($50 to $500 with your secretary of state), and is simple to run. File the articles of organization, then get an EIN free at irs.gov in about ten minutes. The EIN unlocks a business bank account, contracts in the firm’s name, and credit.

One structure note specific to this industry: if you are a CPA or plan to become one, check your state board’s ownership rules before you pick partners. Many states require a CPA firm to be majority-owned (often 51% or more) by licensed CPAs, and some restrict the firm name. If you are operating as an EA or non-credentialed preparer doing bookkeeping and tax, an LLC with no board involvement is usually all you need. The broader launch strategy sits in the best way to start a firm.

Register with your state board if the work requires it

This is the step that varies most and the one people miss. Your personal CPA license (if you have one) is separate from a firm permit. State boards of accountancy commonly license the practice entity as well, especially if you perform attest work (audits, reviews, compilations) or use “CPA” in the firm name. Requirements typically include a majority-CPA ownership check, a firm registration fee ($0 to a few hundred dollars), and sometimes a peer-review enrollment for attest firms.

If you are a bookkeeping-and-tax firm with no attest work and no CPA branding, most states have nothing extra for you beyond the standard business registrations. Confirm on your state board’s website under “firm registration” or “firm permit,” because the penalty for guessing wrong is doing regulated work without authorization. This ties directly into what you charge, covered in setting prices and billing.

Paper the client relationship before you touch their books

Registration protects the government’s interest; the engagement letter protects yours. Before any work, send a written engagement letter that states the exact scope (what you will and will not do), the fee and billing cadence, deadlines and the client’s responsibility to provide documents on time, and a limitation-of-liability clause. This one document prevents most of the disputes and most of the E&O claims that hit new firms. Tools like Ignition generate the letter, capture the signature, and start the recurring charge in one flow.

Then set up onboarding so it repeats: a secure portal for documents (never email a W-2), a standard document request list, and a CRM or practice-management tool to track deadlines. Consistent onboarding is what lets you take on your tenth client as calmly as your first.

The rule of thumb: start as an LLC, then elect S-corp treatment the year your net profit clears roughly $80k, because that is where the self-employment-tax savings outrun the added payroll and filing cost.

Getting found is the part that decides everything

Once you are registered and insured, the job becomes getting clients to notice you before they notice the firm across town. Two steps are free and worth doing this week. Claim and fully complete a Google Business Profile so you appear in local map results, and ask your first two or three clients for a Google review with a direct link. The local-visibility checklist is in how to promote your firm locally.

The higher-stakes lever is your website and any paid marketing. A firm site that loads fast, ranks for the searches your ideal client actually types, and turns a visitor into a booked consult is worth more than any registration on this list, and building one that converts is genuinely hard. To have it handled, get a free video walkthrough. For SEO and paid ads, see our services, and if you are still shaping the business itself, start at expntl.com.