Could i open my own bookkeeping / accounting business?

nicd1981

Hi All,
I became AAT Qualified in 2012, and am now Cima part qualified (Currently working towards managerial level exams)
I have been considering for while working for myself, I am a management accountant in a pharma company.
I know id have to become an MIP, which ill start looking into but what services could I provide?
I would need to take a tax course as I did tax in 2011 and I know the rules have changed quite a lot since then
and a payroll course, as i don't do manual payroll at work , just prepare it for an external company
any advice would be appreciated,
and if there is a mentor service please could some one point it out to me ?
Thanks
Nicola

burg

If you want to do bookkeeping and management accounts then you are probably just as qualified as many. You have the experience too.

Running a small practice offering year end accounts and tax means that tax is essential. Many clients, sadly, don't care too much about their profit or how you get there, just simply, what tax do i owe?

So many of the questions asked revolve around tax in someway.

The other part that really helps is having worked in a practice. For example do you know what working papers to set up prepare and keep to show workings for future reference.

I'm not saying it can't be done without working in a practice first but it certainly helps a lot.

If you have not worked in practice before are you happy with the potential change in working for many different clients doing many different things. Can you adapt to change from working with a builder to now working on accounts for a shop to know a IT consultant?

Can you sell? Such a biggy! There are loads of accountants in the UK, some bad and some good. Being a good accountant is something you can learn but can you learn to sell. You need to wear many hats and the 'sales' one is very important as that's where the work will come from.

Will you go into this full time straight away or can you do it part time effectively at first. Either way can you cover the drop in income until you can be up and running?

Sorry to sound so negative but these are just some examples of how many things get overlooked.

There is an informal mentor service. You simply post on here looking for someone and hopefully you can find an experienced MIP who can help out.

David Ballantyne

Hi Nicola,

Try posting your query on http://www.book-keepers.org.uk/

You may get some useful responses there.

Kind regards,

David.

nicd1981

Hi Burg,
Don't be sorry, I want all these pros and cons and it sounds even better coming from someone clearly in the know
I couldn't give up my job, I am a single mum so only income. I hope in the future I would have enough clients that I could do this but not sure how long it takes or even if ill ever have a client
Also I would only work part time for myself for at least the next 18 months or so, I am hoping to complete CIMA by then and need to stay working in full time employment to complete the practical experience part to become fully qualified.
Id love working with different people from all works of life, no two days being the same. But as you say I have never worked in practice, and I will have a lot to learn with the different paperwork to carry out and file etc.
However I have spoken to many AAT qualified students and bookkeepers that started working for them selves with absolutely no work experience though, so with advice Im sure I could work this out.
Today I registered with HMRC, I have not sent off my MIP/MAAT form though so I don't think I'm allowed to take on any clients until I get this.
I am definitely not a sales person lol I tried that for two weeks temping when I was younger, had the phone slammed down on me so many times, I was in tears haha
I hope I answered all of your questions, If you could offer me any advice what would it be? Im to old to ever get practice experience, I did try whilst studying AAT but no practices would give me a chance even as a volunteer. So all of my experience is in industry
Thanks
Nicola

nicd1981

David Ballantyne said:

Hi Nicola,

Try posting your query on http://www.book-keepers.org.uk/

You may get some useful responses there.

Kind regards,

David.

Thanks David,
I have quickly registered there and posted, Hopefully will be able to get some advice
Nicola x

burg

Nicola,

Selling to clients when you have an actual interest and they have an actual interest is different from cold calling. Never done cold calling and I wouldn't call myself good at sales but I do manage to get plenty of new clients (around 3-5 a month).

Although not a single parent when I left practice to go on my own my wife was on maternity leave with limited income and we already had 2 children. It was basically up to me to make it work and earn the money required.

We scaled everything back and with savings had 9 months to make it work properly or go get a job. In those very early days it was regular bookkeeping work I took on to get the money coming in. By the end of 12 months I had pretty much ditched the bookkeeping and we had 80 new clients. Time was on my side and I spent a lot of it working on getting new clients. We were one of the first in the area to do a lot of online advertising and it worked. It still does.

So my advice would be to commit to it. Plan when you can do it. I would recommend you will need at least 1 day a week pretty quickly. Doing the work in the evening works but you need day time hous to get back to potential new clients.

The next thing is work out what you want from the practice. It may be you want a highly profitable practice and are prepared to work 6-70 hours a week to keep staff costs down and your income up. Or maybe like me you would like to earn a living to be comfortable but want family time to want to keep your working hours reasonable. I work about 35 hours a week since we had an office away from home. Before that I would just end up working evenings and weekends and answering calls late at night and was probably doing 60 hours a week because work was always there to be done.

Bookkeeping is great at the start but clients want you and you are limited to earning say around £20 an hour x the hours you work before your other costs. With accounts work the option is there to have staff and you can still retain contact with clients and they are not bothered. The hourly rates are far better and the earning potential far more. Put it this way my 35 hours a week gives me personally far more than the £20 per hour I could earn from bookkeeping.

I just keep ploughing on but time goes so fast and I do stop sometimes and reflect how far things have moved in the last 6 years.

nicd1981

Burg,
is it rude to ask what each role entails?
For instance, what would you say was the difference between doing the accounts and the bookkeeping?
I know that sounds like a stupid questions, but is the bookkeeping the simple every day transactions like invoicing, processing the bank reconciliations etc
and the accounts the month/ year end , payroll, vat and paye?
I think except for the paye (payroll co send that to me) and the payroll (we send it to payroll co ) I am pretty much competent in everything else, although I've never done a self assessment except in AAT .
Once I receive permission from AAT to look for clients should I start cold calling companies? or would you recommend contacting local accountants and begging for overflow work, to grow confidence etc
Thanks for your advice
Nic x

burg

Bookkeeping is the day to day management of the financial records. So posting of sales and purchase invoices, entering payments and receipts, bank rec's.

Seperately there is then the VAT which may be tagged onto the bookkeeping.

We then have some payroll we do but in the main this is only for clients we do accounts for.

As for accounts, this is the preparation of the year end accounts from the clients records. These vary and could be one of the following:- a box of receipts; bank statements plus some cash expenses; a spreadsheet or cashbook; basic bookkeeping on a proper package; full bookkeeping on a proper package.
With each of these you need to get to a TB before year end adjustments. The year end adjustments will then be for things like:- depreciation; work in progress; closing stock; bad debts; private proportions; final dividends; tax; etc.

Tax is the main concern of so many small businesses. As these grow it moves towards profits and maximising those whilst minimising tax but so many very small businesses are just simply interested in knowing how much tax they owe. They just do the work they can get.

The majority of my queries I get are based around tax and therefore your tax knowledge would need to be very good if you were going to offer year end accounts and tax work. Whilst you can look up some things by stalling a client there will be many times where this is not possible.

In terms of looking for work. I've never had any success by contacting other accountants. I have acted as a tax department for some in the past but they found me rather than me looking for them. My best method of finding work has always been and still is online advertising. Well written adverts with a good budget that link to a good website designed to give potential clients all the info they need.

nicd1981

Hi Burg,
Thanks for all your advice, I am going to enrol on an ATT course after I have sat my two exams in april.
Today though I have been asked to do someone's accounts.
He is a consultant/ freelancer chartered accountant and wants me to do his books to keep separation.
He will invoice the company monthly for work carried out, and receive a salary from his ltd company
I was hoping someone could give me some advice, regarding the corporate tax
Is there an up to date list I can find what he is allowed to claim against his company, for his corporation tax purposes
I know he can claim mileage, meal allowances, clothing for work, all supplies etc
Also , as he is a limited company am I allowed to file his accounts at year end? or will he have to pay a chartered accountant for this
Apologies for all the questions but this would be my first client so don't want any issues arising,
I have made sure he knows he is my first client and I will be learning along the way
Thanks in advance
Nicola

burg

The ATT is a very good course to get the tax knowledge.

As for a consultant I would be careful on meal allowances and clothing. Meals is difficult google meal allowances and there is plenty of guidance. As for clothing it needs to carry a company logo (i.e. uniform) or be protective.

Mileage is possible but as time goes on be careful on the home to a regular place of work. Phone costs may be a possibility, Professional Indemnity insurance and possbily trade subscriptions and CPD.

Yes you only need to be chartered to do an audit which is becoming less and less companies these days.

paulstafford

Hi Nicola

Is your client aware of the 24 month rule regarding travel expenses?

Also you may want to consider whether there is the possibility he could be in a working arrangement where IR35 applys

David Ballantyne

Hi Burg,

I am currently working on refreshing my tax knowledge so that I can start offering tax services. I am using the Osborne tax texts for the AAT syllabus to do this.

Do you think that is is adequate preparation for offering tax services to sole traders, partnerships and small limited companies?

If not, what would you recommend?

Kind regards,

David.

burg

David,

My tax experience is from AAT studies plus further study at ACCA and I have done personal tax at ATT. The ATT is probably over the top in the everyday work I do but it does give me the knowledge that is still needed regularly.

It is certainly a good grounding with the Osbourne books. As a point of reference these books are really good - http://www.amazon.co.uk/Tolleys-Guide-2014-15-Claire-Hayes/dp/0754549402

They cover really good topics and it is easy to read. I have purchased them for years and still refer back to them now and again.

nicd1981

Paul

paulstafford said:

Hi Nicola

Is your client aware of the 24 month rule regarding travel expenses?

Also you may want to consider whether there is the possibility he could be in a working arrangement where IR35 applys

I have looked into it and you are right IR35 may apply.
I have told him this and advised him to speak to an Acocuntant more qualified than me in Corporation tax as he was asking me questions I didn't know. shame as it would of been good experience.
Im still waiting on getting my professional ref for MAAT anyway so would still of had to wait
Nic x

nicd1981

So I've moved forward a little since my original post. I've created my company and called it MEND Accounting. I have a meeting on Tuesday with a potential client , bookkeeping , vat and payroll and should have my professional reference by Monday to send of my application for MIP. I'll explain to potential client that until I have this I cannot start his books.
I've searched the forum and can't find a price list or average charge for services.
He is offering £15 per hour (do I register for vat and charge +vat)
For first client I think this is ok , but once I start advertsing I need to find average fair prices.
Can you all point me in right direction ?
I don't want to cold call local bookkeepers and ask them what they charge as Id feel underhand
Thanks
Nic x

nicd1981

Hey burg
Wandering if I can ask what you mean by online advertising ?
Can you reccomend anything ?
I've opened up a facebook page , registered with Google , yell and Thomson local .
Anything else I should be doing ?
I have now got insurance and should have my MAAT /MIP this week.
Secured my first client too , starting in April , thanks for your advice
Nicola

burg

Online advertising is anything online really that can drive traffic to your website. Personally I am using Google Adwords which it paid for advertising on Google. It can be expensive in terms of cost but over time it cetainly pays for itself. It took mine a while to reach that stage with many tweaks being made but it now makes me money every month.

David Ballantyne

Hi Burg,

I know that for reasons of competitive confidentiality I shouldn't ask you what your Google Adwords secrets are, but could you tell us what your Google Adwords secrets are?

Particularly, how do you focus your ads, what wording do you use on your ads?

Hopefully,

David.

Jannike

There's a webinar on the 4th June you'll find really useful: http://www.babington.co.uk/starting-a-bookkeeping-business/

Jannike

There's a free webinar on the 4th June you'll find really useful: http://www.babington.co.uk/starting-a-bookkeeping-business/

nicd1981

Hi All, Today I had a phone call from a lady who was reading this post. She was asking how I got on starting my business and was considering doing the same so I thought it was about time I wrote an update.

I started self employed work around April / May 2015 with 1 client I found on Indeed. I carried out his bookkeeping, CIS , Payroll, VAT , and created his draft accounts before sending off to his accountant at year end. I still have him now, and his previous bookkeeper has referred me to around 6 other clients . Within a year I had 11 clients , and created my limited company MEND Accounting Ltd.

I still work full time , but have grown and learnt so much since starting out , my confidence has also massively grown. I have around 39 clients now, I obviously don't carry out audits, and refer work dealing with derivatives, or anything I think may be too technical for my experience . My biggest client is 450k turnover, and my biggest payroll is 11.

Anyone else considering this id recommend to do it. Don't take on anything you cant do , but learning curves mean if you have the time and a decent mentor you can learn as you go on basic accounts as long as your having your work checked by another accountant and asking as many questions as you can .

AAT is a fantastic qualification , what we have here is the technical qualification to open the door to not only a career , but a business that we can build from scratch with nothing but a laptop/ printer , a lockable filing cabinet , and plenty of printing paper

Keep this post going , we have the opportunity to shape future accountants business's . that makes me so proud.

How did you get started and where are you going with your business ?

reader

nicd1981 said:

Hi All, Today I had a phone call from a lady who was reading this post. She was asking how I got on starting my business and was considering doing the same so I thought it was about time I wrote an update.

I started self employed work around April / May 2015 with 1 client I found on Indeed. I carried out his bookkeeping, CIS , Payroll, VAT , and created his draft accounts before sending off to his accountant at year end. I still have him now, and his previous bookkeeper has referred me to around 6 other clients . Within a year I had 11 clients , and created my limited company MEND Accounting Ltd.

I still work full time , but have grown and learnt so much since starting out , my confidence has also massively grown. I have around 39 clients now, I obviously don't carry out audits, and refer work dealing with derivatives, or anything I think may be too technical for my experience . My biggest client is 450k turnover, and my biggest payroll is 11.

Anyone else considering this id recommend to do it. Don't take on anything you cant do , but learning curves mean if you have the time and a decent mentor you can learn as you go on basic accounts as long as your having your work checked by another accountant and asking as many questions as you can .

AAT is a fantastic qualification , what we have here is the technical qualification to open the door to not only a career , but a business that we can build from scratch with nothing but a laptop/ printer , a lockable filing cabinet , and plenty of printing paper

Keep this post going , we have the opportunity to shape future accountants business's . that makes me so proud.

How did you get started and where are you going with your business ?

Very inspirational and impressive, especially your biggest client and payroll.

I hope the AAT contact you soon and put you in their magazine so everyone can learn from your experiences and take inspiration from what you have achieved from your hard work.

Hopefully you win some sort of end of year AAT award, e.g. member of the year, or MIP of the year. It would be good if AAT recognized the fact that you are giving back to the AAT community each time you post and share your experiences. It also has the effect of making these forums more valuable and creates worthwhile content.

I look forward to reading more in the next AAT magazine (hopefully).

AAT should pay you to do a webinar, just a thought. It would be good to hear more from AAT success stories such as you, Burg, etc. I'm sure the AAT pay lots of freelance researchers, etc to gather member feedback which ultimately achieves very little. They should pay you to share your extremely valuable experiences too if you have the time to share your thoughts and experiences on a mass scale.

nicd1981

Hey Reader,
I have actually been in the AAt magazine last year , I went to London for an interview and photo shoot it was great . I've also been interviewed by the AAT comment - online magazine .
I'd love to do a webinar - but think no one outside of Liverpool would understand what I was saying ha

Bmer82

why let that stop you? there have been many famous scousers that made their money from the accent!

nicd1981

I was kidding! of course I'm proud of y scouse accent haha
I'm taking part in a new AAT online event , but not sure how secret it is yet so ill just say watch this space, think it will be on Instagram and other social media platforms in next few months so keep an eye out for it xx

How are you getting on Bmer82?

Bmer82

Im good slowly refreshing my tax knowledge now that CIMA is out of the way not that that matter as could all go out the window again next week

nicd1981

yes, I agree, who knows what will happen after the election- MTD for instance, up in air at moment xx

Bmer82

Im getting the feeling locally that there has been a bit a groundswell for labour, I dont think the cuts imposed by May in the police service have done her any favours and have been highlighted in recent weeks. Im bracing for increases in income tax and corporation tax and with an outside chance of the reversal of the dividend allowance

nicd1981

I certainly agree with you there, the dividend allowance rule I feel was a bit mean anyway .
Will definitely be good to reverse back to 5k instead of the silly low £2k .
Increase in corp tax I do agree with , without getting too political I believe business's should pay a bit more , instead of reducing to 18% and putting tax up for everyone else . But who knows , looks like labour have gained some ground , but no one really knows until Friday morning - will you sleep at all ? Sure I'll have one eye open all night

Bmer82

oh I will sleep with a 4 month old you make sure you get it whilst you can!

debtrish

> @nicd1981 said:
> Hi All,
> I became AAT Qualified in 2012, and am now Cima part qualified (Currently working towards managerial level exams)
> I have been considering for while working for myself, I am a management accountant in a pharma company.
> I know id have to become an MIP, which ill start looking into but what services could I provide?
> I would need to take a tax course as I did tax in 2011 and I know the rules have changed quite a lot since then
> and a payroll course, as i don't do manual payroll at work , just prepare it for an external company
> any advice would be appreciated,
> and if there is a mentor service please could some one point it out to me ?
> Thanks
> Nicola

Hello Nicola

I am looking for some advice I am thinking of starting a bookkeeping business from home.
I am currently studying AAT, and work part time in an accountants firm.

Would you recommend starting a business? How hard is it to start?
Have looked into insurances and software packages.
Could I start using excel and if it takes off get a software package?

Thank you for any advice
Debbie