Setting up one-man bookkeeping firm - advice?

KoopaCooperKoopaCooper London, UKPosts: 44Registered
I'm the bookkeeper and VAT/accounts assistant for a small (12 people) accounting firm, but I've recently been considering the idea of setting up my own one-man bookkeeping business on the side, to earn some extra money (I wouldn't want to risk going fully self-employed) on the side to supplement my minimum wage.

Just to start, I'm not looking at rushing into anything. Maybe sometime next year, but I want to make sure I know all my steps before I start walking here. :) From my job, I've learnt some of the things I'd need to do in order to set this up, but I wanted to ask in case there's anything I'm overlooking anything.

I'd be looking to do bookkeeping online for sole traders or very small businesses, with the clients hopefully sending me invoices and bank statements by email, as I would be working from home and so have no physical storage space (beyond a hard drive or two). I would also want to protect myself (and my father, with whom I live) personally from any business debts,

So the first thing to do would be to form a company; that's easy enough (I've learnt how to do that as one of regular tasks at my F/T job) and not expensive. Then probably open a business account.

Being a company, I would have to maintain certain yearly actions, i.e. submitting a confirmation statement and accounts each year to CH. Also I'd be trading obviously, so I'd need a Government Gateway account and to register for CT.

I'd need a method of invoicing my own clients and doing my own books, so I'd choose some online accounting software for me; probably QuickBooks, as that's the one I have most experience of using at work.

In order to actually do business, I'd also need to be registered for AML, but I wouldn't do that with HMRC because of the cost; I'm a member of the IAB (still not yet finished doing my AAT), so I'd almost certainly register with them. I'd also need to obtain a Practising Certificate to be an MIP. On top of those, I'd need Professional Indemnity and Public Liability Insurance.

So to recap at this point. In no particular order:

1) Form the company (one-off cost)
2) Obtain practising certificate (annual fee) with IAB
3) Register for AML regulations (annual fee) with IAB
4) Professional Indemnity Insurance (annual fee)
5) Public Liability Insurance (would I need this for a home office?) (annual fee)
6) Get a Government Gateway ID and register for Corporation Tax with HMRC (free)
7) Get a business current account. A savings account might be useful too, but not necessary. (probably a monthly fee)
8) Set up accounting software for my own business. I can be invited to gain access to my client's books on several online platforms. (I have a couple of years experience already with using QB, KF, and Xero) (monthly fees)
9) I'd probably keep a small client list in something like Excel, no need for expensive software (free).

Now I know I'm not yet competent to prepare accounts (I could...but I might not do it correctly so better simply to not do it at all yet), but I could offer clients some lower-level services that I've learnt through on-the-job experience, such as:

1) Company formation and dissolution
2) Company secretarial (Confirmation Statements and generally maintaining info on Companies House)
3) Bookkeeping of course
4) VAT returns

Q) If I had a bookkeeping client, would it be considered ethical if I were to recommend them to the accounting firm that I work for, to have their accounts done?

It was at some point while I was idly thinking about all of this the other week, that I realised this was more than just a purely idle thought...it could work; I'm pretty sure I could make it work. I certainly wouldn't get rich, but it could nicely subsidise my employment income. Also wow this post just got long.

But really, is there anything I may have missed in terms of things I'd need to do to fully - and more importantly, to legally - set up a company?
Accounts Assistant, ᴍɪᴀʙ & AAT Student
Level 1 - 29 Jan 2015
Level 2 - 17 Jun 2015
Level 3 - 22 Jan 2016
Level 4...
Budgeting - 20 Oct 2016
Financial Performance - 22 Dec 2016
Financial Statements - 23 Mar 2017
Personal Tax - 30 Mar 2017
Business Tax - 27 Apr 2017
ISYS Project (Submitted and Awaiting Results!)
Ren

Comments

  • BusinessWomanBusinessWoman Posts: 9Registered
    Hi I would like to do the same as you, small businesses and have them send me their paperwork. How easy is it to find them? I haven't started yet, I'm wondering whether to start level 4 first. I can already process up-to Trial Balance.
  • KoopaCooperKoopaCooper London, UKPosts: 44Registered
    Hi @BusinessWoman

    I honestly have no idea how hard it would be to attract bookkeeping clients - I've never had to do my own marketing before.

    To be frank, I think that if the primary purpose is bookkeeping services then holding level 3 would suffice for getting such a business started, although I'm sure you'd still want to do level 4 later (if turnover is very good, you might even take a dividend to pay for level 4).
    Accounts Assistant, ᴍɪᴀʙ & AAT Student
    Level 1 - 29 Jan 2015
    Level 2 - 17 Jun 2015
    Level 3 - 22 Jan 2016
    Level 4...
    Budgeting - 20 Oct 2016
    Financial Performance - 22 Dec 2016
    Financial Statements - 23 Mar 2017
    Personal Tax - 30 Mar 2017
    Business Tax - 27 Apr 2017
    ISYS Project (Submitted and Awaiting Results!)
  • BusinessWomanBusinessWoman Posts: 9Registered
    Oh thanks for your reply. You are well on your way as I see you have completed level 4. I'm deciding whether to self-study. Good luck!
  • KoopaCooperKoopaCooper London, UKPosts: 44Registered

    Oh thanks for your reply. You are well on your way as I see you have completed level 4. I'm deciding whether to self-study. Good luck!

    Thanks, haha. :) Actually I haven't finished yet - just submitted my ISYS project and I'm waiting to hear back whether I passed or not.

    Typically, a student would get their tutor to evaluate the project and if they deem it ready for upload, then you've effectively passed. However I lost my contact with my tutor ages before I finished, so I just finished on my own and uploaded, and now am hoping for the best. xD
    Accounts Assistant, ᴍɪᴀʙ & AAT Student
    Level 1 - 29 Jan 2015
    Level 2 - 17 Jun 2015
    Level 3 - 22 Jan 2016
    Level 4...
    Budgeting - 20 Oct 2016
    Financial Performance - 22 Dec 2016
    Financial Statements - 23 Mar 2017
    Personal Tax - 30 Mar 2017
    Business Tax - 27 Apr 2017
    ISYS Project (Submitted and Awaiting Results!)
  • MickdundeeMickdundee LondonPosts: 238Registered
    Your previous posts suggest that you are employed in practice.

    Your contract of employment may prohibit you from taking on work of this nature outside of your employment.
  • KoopaCooperKoopaCooper London, UKPosts: 44Registered

    Your previous posts suggest that you are employed in practice.

    Your contract of employment may prohibit you from taking on work of this nature outside of your employment.

    Good point, thanks for making it!

    I shall have to look again at my contract...if I can find it. xD
    Accounts Assistant, ᴍɪᴀʙ & AAT Student
    Level 1 - 29 Jan 2015
    Level 2 - 17 Jun 2015
    Level 3 - 22 Jan 2016
    Level 4...
    Budgeting - 20 Oct 2016
    Financial Performance - 22 Dec 2016
    Financial Statements - 23 Mar 2017
    Personal Tax - 30 Mar 2017
    Business Tax - 27 Apr 2017
    ISYS Project (Submitted and Awaiting Results!)
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