Setting up as MIP

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Comments

  • Aaron C RescueAaron C Rescue Feels At Home Registered Posts: 76
    I can understand the need to have stringent rules in place which are designed to protect both the profession and standard of work. I can also understand that situations provided for in real work experience, cannot necessarily be learnt from a text book. I can also see that membership of a professional body helps keep your knowledge fresh, relevant and up to date.

    However, - has anyone else come across adverts that have used the term 'Qualified by experience'? What is all that about then?
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    However, - has anyone else come across adverts that have used the term 'Qualified by experience'? What is all that about then?

    That's people who know what they are doing after a good deal of experience, but don't have formal qualifications or letters after their name.

    A QBE could be:

    - a part-qual who never did their finals
    - a qualified who let their membership lapse
    - someone who learned on the job but never had formal training

    All of the above have the possibility to be "excellent unqualifieds" [as in, don't have a formal qualification] just as those with letters after their name have the ability to be awful (and I've seen a few!).

    Edit: I guess I'm a QBE. I am technically a qualified accounting technician. I'm also an accountant by trade and am experienced. Thus I guess that when I refer to myself as a qualified accountant, I'm referring to being QBE not MAAT. I never call myself an accounting technician.
  • currywalacurrywala New Member Registered Posts: 14
    Mip

    I just attended a branch meeting on this last week at the Reading branch, and according to the AAT the only thing you cannot do as MIP is the Audit. If anyone wants the contents PM me and I will photo copy and send them to you.
  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    You are absolutely correct, the only thing an AAT MIP can't do is audit and insolvency, or anything where they dont have the relevant experience .

    The problem is that we are seeing plenty of members saying they have no practice experience yet want to set up in practice.
  • Aaron C RescueAaron C Rescue Feels At Home Registered Posts: 76
    I am currently temping and as far as gaining the relevant experience, I have recently helped my friend set up his books, and he is anticipating taking me on full time in the position as bookeeper (not holding my breath though!).

    So if I do in fact go to work for him as his bookeeper, as I understand it -
    I would be allowed to do his books as far as TB, and no further? Is that correct?

    Secondly, due to the size of the company, the MD can submit and sign off abbreviated accounts, and qualifies for Audit exemption. He has told me that as long as I prepare the Balance Sheet in accordance with the rules - he will sign them off. Would I be allowed to do that?

    Thirdly, if I do in fact end up working for him as his Bookeeping (including Final Accounts!), and he maintains this current turnover level, the accounts effectively never undergo an Audit, so how would I be able to get my work recognised as experience?
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    If you go work for him full time, I assume you are not a MIP, therefore, you won't need to request the AAT permission to work as an MIP.

    However I would be very careful that you do the right work, or it might come haunting you again in this situation.

    The idea is that if you work for yourself you have noone to fall back on, while within a company, you have some back up, comparison, can ask advice from other people.
  • Aaron C RescueAaron C Rescue Feels At Home Registered Posts: 76
    Thanks Rinske.

    So, potentially if it comes off, its a good position to secure. As there is nothing to stop me working in his employ doing bookeeping, VAT and payroll? Once I've gained that experience - I could then either attempt to get a job in practise or offer my services as a freelance bookeeper to local Practises. Could that work for the practises then count towards gettign my work signed off and 'experience' towards MIP?

    ** I think it is all making sense now**
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    No issues as long as you work for him, however if he is your only form of experience, then becoming a MIP might be difficult as you would only have experience of one specific company.

    The point is, to become a MIP you need to know what you are doing, it requires a lot of knowledge, otherwise you would give your customers potentially bad advice. Most SME's who have an accountant know not much about their bookkeeping and just take your word for it.
    If you became a MIP and offered them services, they would expect you to know it all and to give the right advice.
    If you then end up giving them the wrong advice it might get very painful for them and you might give all other MIP's a bad name. (Plus the costs of te mistake etc)

    If you are employed, the assumption is made, you are employed based on your knowledge and understanding and there is enough time to train you on the job if you do new things.
    Also if you end up messing it up and then get fired for it, you only get fired, it's not like you give the other MIP's a bad name.

    This is how it was explained to me, and the reason why I haven't applied for MIP, as I lack a lot of knowledge still of English laws etc.

    Give me Dutch payroll anytime though. No issues there, just might need to quickly read up on the latest changes. Doesn't help as I live in England though.

    You is just an example! It's nothing personal to you or anyone specific here! It's just easier to explain what I mean this way!
  • RobjRobj New Member Registered Posts: 9
    As a matter of interest how would you treat a credit cash account balance? I assume you would debit it to drawings??
  • sdvsdv Experienced Mentor Registered Posts: 585
    Robj wrote: »
    As a matter of interest how would you treat a credit cash account balance? I assume you would debit it to drawings??

    If you debit Drawings

    which account would you credit? It can be either Bank or Cash.

    If you credit Cash, you are compounding the problem.

    No, the questions you have to ask are; can a cash account have a credit balance?

    where does the debit balances in the cash account come from?
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    sdv wrote: »
    If you debit Drawings

    which account would you credit? It can be either Bank or Cash.

    If you credit Cash, you are compounding the problem.

    No, the questions you have to ask are; can a cash account have a credit balance?

    where does the debit balances in the cash account come from?

    More often than not, cash is 'overdrawn' in owner-managed businesses because the owners have used their own cash. The usual answer is Debit Cash, Credit Drawings/Capital.

    That's what I understood Robj as meaning, even though he answered in a shortcut.
  • RobjRobj New Member Registered Posts: 9
    Yes thank you that's exactly what I meant although I didn't explain very clearly. I know the situation shouldn't arise but it does.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    Robj wrote: »
    Yes thank you that's exactly what I meant although I didn't explain very clearly. I know the situation shouldn't arise but it does.

    And it does with alarming regularity, too :lol:

    The other one is having a large debit balance on the petty cash account. The answer? It's drawings. They went to a cashpoint and put it in their pocket, as opposed to putting it in the petty cash tin.
  • sdvsdv Experienced Mentor Registered Posts: 585
    Monsoon wrote: »
    More often than not, cash is 'overdrawn' in owner-managed businesses because the owners have used their own cash. The usual answer is Debit Cash, Credit Drawings/Capital.

    That's what I understood Robj as meaning, even though he answered in a shortcut.

    I see where you are comming from.

    However, Revenue takes a dim view on this. They would arugue that this credit balance is infact undeclared cash sales and therefore debit Cash and credit Sales. (Tax revenue for that Tax man)

    This situation should start ringing bells for your close scrutiny of the sales transactions including markup and margins. There are also implications under money laundering regulations. (lets not go there - too many difficult situations)

    It would be up to your clients (in other words you as his accountant) to prove to the Revenue that the credit balance on the cash accounts is NOT undeclared sales.

    And this is the whole point of an in-experienced AAT FULL memeber going out to parctice and not relaising the consequences of their actions or inactions.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    sdv wrote: »
    I see where you are comming from.

    However, Revenue takes a dim view on this. They would arugue that this credit balance is infact undeclared cash sales and therefore debit Cash and credit Sales. (Tax revenue for that Tax man)

    This situation should start ringing bells for your close scrutiny of the sales transactions including markup and margins. There are also implications under money laundering regulations. (lets not go there - too many difficult situations)

    It would be up to your clients (in other words you as his accountant) to prove to the Revenue that the credit balance on the cash accounts is NOT undeclared sales.

    And this is the whole point of an in-experienced AAT FULL memeber going out to parctice and not relaising the consequences of their actions or inactions.

    Yes this is of course an alternative explanation and you need to know the client to know which answer is likely to be the right one - indiscriminately journalling to drawings wouldn't be correct, but neither would be journalling to misc sales. Once you get to know a client and their books, you get a good feel for whether they are likely to be a 'cash sales' type client or not. As you say, the MLR on this is a headache and for this reason, we try to avoid having this type of client. Other ways of determining whether the Cr goes to drawings or sales are things like whether the client has the means to input their own capital (and providing bank entries to back it up) and comparing GP/NP ratios on prior years to see if anything seems amiss.

    No matter how many years experience you have before going it alone, there will always be a learning curve. Doing it with no experience at all is too steep a curve and ultimately it's the clients who would bear the consequences of this, which is why the AAT require experience before licencing their members in practice.
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