Approached by an Accountancy Practice

BensteadBookkeeping

I have recently started my own Bookkeeping practice providing basic services. I do not do self assessments as I am not qualified nor experienced enough to offer these services. I have been approached by a local practice offering to pass on 20% commission for any referrals that I pass on through my Bookkeeping clients. Has anyone any experience of this and do you draw up some sort of service agreement? I am wary of my clients being poached and want to know what others practices and experiences are.

Thanks

payrollpro

There shouldn't be a problem with this as long as you get the agreement worded right. As you say, you do not have the skills and knowledge needed, and presumably your practising licence does not allow you to do them, so your clients would be going elsewhere anyway.

At least this way you can keep control and know who they are going to.

What you cannot do is sub contract the work, in other words bill for the SA work but then pay the other firm to actually do it because that will offend your licence as well.

Make sure also that they other firm is not totally taking over because as soon as you are skilled and licensed to do SA you want all that work back so watch the way they want the agreement worded.

Payrollpro

Monsoon

I was under the impression that you are allowed to do work for which you are not licensed as long as you follow the same rules as student practising: only do work within you competence and ask for help when needed. Otherwise how can anyone add new areas to their license?

20% commission sounds good. As PP says, get an agreement and think forwards about what may happen in the medium to long term, and make sure it's covered in the agreement.

Rachel

Can you ask that they refer you for bookkeeping, or do they have their own team? Just to go full circle really

PaulPSB

You should also remember that the code of ethics suggest you should make your client aware of the referral fee in order to minimise the risk to independence & objectivity

Paul

BensteadBookkeeping

All excellent posts, and some great information. I will be asking them their process at present for bookkeeping service to see if there is an option for them to pass some work my way.

Thanks for the help, especially around letting my client know and the sub-contracting aspect.

Dean

payrollpro

Monsoon,

I was told that if work was outside the license then even billing for it, through sub contracting, was a problem because it was your practice submitting a charge for work you were not licensed to perform, that is why many do it via the finders fee route.

Makes sense though if you are sub contracting in the interim whilst you build up the skills and experience needed to perform it yourself. I still think you need to be careful though.

Payrollpro

Paul C

"I was under the impression that you are allowed to do work for which you are not licensed as long as you follow the same rules as student practising: only do work within you competence and ask for help when needed. Otherwise how can anyone add new areas to their license? "

It would be great to pin this one down ( I am hoping this is correct). Does anyone from the AAT MIP team read these posts? As I have been assumming that if not licenced in that area then I can't.

Monsoon

I'm 99% sure I was told that if I employed someone who could do an area for which I was not licenced and that over time, by observing them and doing CPD with them, gained enough experience to be licenced, I could both bill for this work from day one and also become licensed in the future.

I'm also 99% sure AAT have said it is fine to subcontract work out, as long as you don't deliberately give the impression the work is done in house (my interpretation).

I would therefore guess the employment comment also works for those who choose to subcontract instead of employ.

dantray

With regards to sub contracting:

Earlier this year I queried this with the MIP & Compliance team with AAT as I only do bookkeeping, VAT and PAYE and wanted to offer accounts to a client which I am not experienced enough yet to complete on my own.

I received an email back from AAT stating that providing it was clearly stated in the engagement letter that accounts prep is being outsourced to a subcontractor then it was fine for me to offer.

I have saved this email just in case but I would get your own confirmation from them before making a decision.

Thanks,
Dan.

Monsoon

dantray wrote: »

I received an email back from AAT stating that providing it was clearly stated in the engagement letter that accounts prep is being outsourced to a subcontractor then it was fine for me to offer.
.

Thanks, that's good to know

Fireraiser

I was surprised but pleased that I got licensed in two areas that I have no experience in as I was able to provide evidence of CPD and another AAT Branch Committe member offered to act as a mentor for me. Could this route help you take on SA work yuorself?

BensteadBookkeeping

It could be, I hope to do the Personal Taxation unit with AAT soon and hopefully push on and do the ATT as I've heard that it is challenging. I am not in a position workwise to gain this experience so hopefully I can get some experience via the accountants as that would be worth more to me at the moment than monetary gain.