Setting Up Book-keeping/accounting practice

Newby

Most of my accounting career has been in Local Government, from which I recently took early retirement. I am Cipfa and MAAT qualified and have done Business Taxation and law exams for ATT. I am considering starting my own book-keeping/accounting practice offering Tier 4 services. I would be interested in views on the following;
Would previous practice experience be essential or mainly desirable for setting up a practice ?
Would it be necessary to train in and offer more than one type of software e.g. QuickBooks, Sage...etc ?
Is there a market for providing discrete services such as preparation of annual accounts, rather than ongoing or retained services such as book-keeping ?
Do larger firms of accountants use small practices on a sub-contract basis ?

Any advice or guidance would be much appreciated.

MarieNoelle

On the latter point I would add that most firms using subcontractors would probably subcontract the bookkeeping rather than the accounts especially if you are just starting up as a sole trader.

reader

Hi Newby,

How is ATT going? I have done business tax, personal tax, and business compliance. I'm currently doing law now. How easy/difficult did you find law? How long did it take to study for? Any tips/advice?

ATT will definitely help with your accountancy practice as clients want to know how much they are legally required to pay in tax.

Believe it or not, previous practice experience is not essential. I believe the AAT will give out practising certificates to people in industry/public sector as long as you can prove that you are competent (which is probably harder to do if you don't work in practice) and have done CPD (eg ATT is an excellent example of this).

You don't need to do any formal software qualifications. You should be able to get all the information you require from the instructions/help section of the software website, or by emailing the software company's support team.

Yes, there is a market for the client doing the bookkeeping and VAT returns, and the accountancy firm just doing the accounts and tax return. This is very common already, and will get more common as more and more clients begin to use their own online/cloud systems as part of the Government's making tax digital (MTD) drive beginning April 2019.

I believe larger firms may subcontract the bookkeeping and accounts overseas, e.g. Ireland and India. Then the larger firm would check the work in-house. Consequently you might struggle to get subcontract work, although you could try and see what happens.

When's your next ATT exam? Will you go onto CTA?

Newby

Hi Experienced Mentor

Thanks for your advice. Regarding ATT law, I worked straight from the ATT manual and probably spent more time on it than I should have done, although I did get a good pass. I made notes of main points & facts from each chapter and then read these through 2/3 times as some of the material is inter-related such as in the company law chapters. To save time your training provider may have summary notes you could use. The questions for each chapter in the manual are very factual whereas the exam questions focus more on legal principles. I also answered a couple of questions from knowledge gained from business tax course.
My next ATT paper will be one of the option ones but undecided between VAT or Corporate Taxes, however would Business Compliance be of more relevance to a small practice ?

reader

I believe business compliance (50% VAT and 50% PAYE) would be more relevant than corporation tax (which you will cover in the business tax exam anyway). In an ideal world, both should be done because the corporation tax exam does go into profit extraction, e.g. salary/dividends, and business compliance gives breath of knowledge.

How much time did you spend on Law?

Also, do you recommend a training provider for law?

Can you go into a bit more detail about your comment re: legal principles, please.

Newby

Difficult to say how much time I spent on Law as I started working through the manual then got an interim job and didn't continue for a few months. Prior to the exam I probably spent 2 hours a day/5 days a week for 6 weeks finishing off my notes and reading them through.

I used Kaplan distance learning for Business Tax who also provide a similar course for Law. Didn't use Law course as self funding and keeping costs to minimum.

I found a number of questions in manual test factual knowledge, such as a particular deadline for company making a return to registrar, whereas the exam had a lot of multiple response questions around, say, whether particular statements on capital maintenance for companies were true or false. You may want to attempt the mock exam on the ATT website at an early stage to get a feel for the type of question. You could do the mock a number of times as you won't remember most of the questions !

reader

Thank, Newby

If you do have any more accountancy practice-related questions please feel free to let me know, and I would be more than happy to help.

You have been very helpful.