AnneM09
Blogger
Share this content
0
17
5820

Starting up in practice - what factors to consider?

Starting up in practice - what factors to...

I'm in the process of setting up a practice and have identified the following factors that need to be considered. Please can you take a look and see if there is anything obvious that I have missed? Also, in terms of accounting software, do I need to buy this at the outset, as my initial client base will mainly be sole traders and small start up companies? If so, can you recommend any good accounts production and tax returns software for a limited budget? Also, in terms of engagement letters, I know that ICAEW has some templates, but are these good to start with, or do you have recommendations as to where I can find/buy these templates?

The factors that I have identified, in no particular order, are as follows:

  • Practising certificate
  • Indemnity insurance
  • Data protection registration
  • Engagement letter
  • Professional clearance letter
  • Accounting and bookkeeping software
  • Practice assurance (a whole topic in itself, I suspect)
  • Impact of cloud computing and IXBRL
  • Practice management software (is this necessary from the outset, or perhaps only needed when the client base expands?)
  • Invoicing, billing and collections (although I plan to do monthly fees)
  • Pricing
  • Client monies
  • New client checklist
  • Anti-money laundering regulations
  • Encryption of computer, back-ups etc
  • Alternative (how do I go about arranging this?)

Thanks in advance for your help and advice.

Replies

Please login or register to join the discussion.

avatar
28th Oct 2010 15:14

Starting up

I recently blogged on this and whilst not an exhaustive list, will hopefully give you something to think about:

Thinking of starting an Accountancy or Bookkeeping business?

Good luck!

 

 

 

Thanks (0)
avatar
28th Oct 2010 16:06

check out

helpaccountants.co.uk - they have a powerpoint on this and very good info / templates

Thanks (0)
28th Oct 2010 17:30

You missed one

Start off with this one because the rest doesn't matter unless you have a really good answer to:

Why on earth should any client use you? 

Bob Harper

Portfolio Marketing

Thanks (0)
avatar
By Luke
28th Oct 2010 18:05

You've thought of most things.  A few comments hopefully to help:

Don't go near client money.  Most small practices can operate without handling it.  I started on my own in 2006 and have managed to avoid it so far, I've only had one client ask me to take a cheque up front for his tax and then pay it over when it was calculated.  I said I didn't handle client money but that I'd soon tell him what to pay directly and he was fine about it. This removes a whole load of regulations and things for you to think about.  You also then don't 'need' an alternate per Institute guidelines.

Bearing in mind that you said you're on a limited budget I wouldn't bother with practice management software at the start, I think you can control it yourself with a smallish client base.  (I know others may disagree though.)

The ICAEW engagement letters are a great place to start.  It sounds like you're a member so you can download from the website.  Once you've gone over them once, for future times you'll only need to amend the covering letter and attach the T&cs for each service.

Practice assurance is just about 'doing it properly', nothing more.  Just be conscientious, use your ethics and know that you're following the requirements on things like being competent to do the job, anti money laundering etc.  I thought I was doing everything properly but was still nervous before my visit, with no need as it happens as they didn't even have any pointers for improvement to issue.

Re anti money laundering, Legatio KYC sell 15 online checks for about £60 I think.  When I bought them it also included policy documents and an assessment tool.  Well worth it so you're not worrying.

With regard to pricing, that's the bit I found hardest!  Opinions vary massively on here with it appears fees for the same job varying from a few hundred pounds to a few thousand.  I did research amongst friends, acquaintances to find out what the 'going-rate' was around where I'm living and working.  I tend to charge around that and then up and down depending on the circumstances.

As for cost effective software, you'll find Moneysoft for payroll widely praised here and VT final accounts also highly rated.  VT final accounts comes with bookkeeping software, which even has a free cashbook version so your client can input most of the details if you wish.

Finally, I have teamed up with another sole practitioner locally and we meet monthly.  It is great for swapping ideas, checking technical understandings, just "what would you do?" scenarios.

Good Luck!

 

Thanks (0)
avatar
28th Oct 2010 19:03

Keep it simple

To start with you'll want to keep costs down - at least until you know that you want to stay in practice (some people just find working for themselves is wrong for them).

If as you say you will be dealing with sole traders - why bother buying accounts software when a speadsheet can quickly be devised.

If you want online bookkeeping there are several free packages that will get you going. There was a thread on here fairly recently about a decent online system but I cant recall its name (maybe someone else can remember).  

Similarly why bother with tax return software when you can use HMRC's own online returns (crude but they work).

As regards pricing - if you are taking over clients who have been with another practice prior to yourselves then use what they were charging as a starting point - maybe you will want to be a few£'s cheaper to get the client - thats a judgement call.

Practice management software is unnecessary to begin with - again a simple checklist on a spreadsheet should suffice to begin with certainly until you get past the 50-100 client mark.

Keep it simple - dont get bogged down with unimportant detail - and ensure that you give the clients a good service and your business will grow by recommendation.

Above all - run your business your way so that it suits you - others can tell you what worked for them, which is a good guide, and ignore all the theories and get rich quick ideas - they are designed to make money for those selling them.

 

Thanks (0)
avatar
By AnneM09
28th Oct 2010 20:36

Thanks Everyone

Thanks to all who replied with your comments and advice. Good to know that I am not too far off track. I agree that I need to have a USP ( I assume this is what you are referring to Bob?).

It would be good to have someone to share this journey of self-employment with and so if there are any accountants out there starting up their own practice who wish to shares the joys (and the pain!) of being a sole practitioner, then please message me.

Cheers!

Thanks (0)
avatar
By hallsi
28th Oct 2010 22:07

Make sure you get paid.

I started in practice about 15 years ago and have seen a lot of changes in how we do things, accounting standards, tax legislation and administration, IT changes, MLR, etc during this time.  I have respect for anyone starting out now as your list shows there is a lot more involved in running a practice these days.  You also have to consider the economic climate that you are operating in.  It will be more difficult for you to acquire clients and when you do, you must consider whether this client will survive the next 12-18 months.  I believe that the single most important aspect of your work at present is ensuring you get paid - you can charge whatever fee you think is appropriate but if the client doesn't pay then it all amounts to a waste of time and effort by you.

if you can, start as you mean to go on and offer fixed fees payable by monthly standing order.  if they stop paying then stop working for them.if you have any concerns about a client, run a credit check on them and their company (you can do this through http://www.veriphy.co.uk/ for a small fee).  this company also does MLR ID checks for £4 each.you can download company information from Companies with a Companies House Direct account.  it only costs approx £1 to obtain most documents.  it also shows what other interests Directors have.state in your terms that no accounts or returns will be filed until the fee is paid and stick to this policy.when taking on a new client, ask them to pay up front the first time and see how they react.  most reasonable people will not object.if a client has a poor credit rating you must insist they pay in advance or before the work is completed and handed over.offer different ways to pay, eg cheque, BACS, standing order, card payment (http://www.securehosting.com/online_card_processing.html) - linked to Streamline merchant account costs very little - payments done through internet using virtual terminal no need for card machine rental.

Thanks (0)
avatar
28th Oct 2010 22:10

Things to consider

There a five things to consider, create an approach for, and measure. They are:

SalesServiceStandardsPeopleCosts 

I am not trying to be flippant, but everyone has a different ways of achiving each of these.

Best regards

Albert Camus

Thanks (0)
29th Oct 2010 13:01

Agent registrations

Don't forget to set yourself up as agent with HMRC anc companies house. The sooner you get on to this the better - it can take a while with HMRC in particular!

Thanks (0)
29th Oct 2010 13:08

are you a loner?

Serious point. I assume you're starting as a sole practitioner with no staff. Some people find this difficult if they have never worked as a one person business before.

Can you function well if you are in a room on your own all/most of the day? It drives some people barmy whilst others relish it.

Thanks (0)
avatar
02nd Nov 2010 15:21

A few pointers

Started 11 months ago. A few pointers I wld suggest:

-take money up front on a monthly basis (not classed as client moneys;)

-IRIS is a good software and will be iXBRL compliant. You can start off with basic package for up to 10 clients. Do not take their std letter package, very poor. Order the disk of std letters from ICAEW. Best prof clearance letter I found was free and found it via Google;

-most important lesson we have learnt-a lot of jokers will be contacting you to sell their business lists or marketing services with lots of guarantees. Tell them all to get stuffed, every penny a waste of money. You need some kind of usp or try and focus on particular mkts or businesses and get into networking asap. Do it informally so ple get to see you over a period of time and build some trust. Chamber of Commerce is a good option and may offer cheap reg'n for the first year. If you can focus on particular mkts then look into holding seminars, etc to demonstarte your expertise of that sector.

Yell.com in particular are very persuasive but someone wrote on here a while back saying he spent £1,400 on their wiz bang package and didn't get any response. YOU HAVE BEEN WARNED!

Thanks (0)
avatar
03rd Nov 2010 09:23

Keep It Simple, but

I wholeheartedly agree that you don't need to get an all-singing, all-dancing management system to deal with 20 clients, to manage Tax Returns for 30 clients, to do mailshots to 40 clients, etc.  You can run a small and stable practice on the back of a fag packet with Revenue software, Excel and Word. 

But there comes a time when you have to get organised with more specialist stuff, you need a proper database or contacts software, Tax Return management software and Structure.  Where that point is, can be a difficult thing to spot.  My one regret is not recognising this point and allowing the business to expand to the point where you're so busy that you haven't got time for structural things.

From my recollection of early just-me days, there's a lot of spare time (I remember taking a 3-week holiday and leaving the answerphone on - ha!).  Use that time to think and research how you will run a bigger practice.  It might be the last bit of mental peace and quiet you get from year 3 onwards.

Thanks (0)
avatar
03rd Nov 2010 10:44

Software

If I were you I would be more inclined to invest in software to cope with your anticipated practice requirements of the future, say 2 or 3 years hence.

Developing in-house systems or using/buying a make-do system still takes up valuable time in becoming proficient. If you chop and change as your practice grows this will become a nightmare in terms of time taken up switching from one system to another and learning how to use the new one and rewriting your system procedures. 

That presents massive opportunties for things slipping through the net and errors. In fact it is possible you will continue to use your old system way past it best before date which could introduce serious inefficiencies.

 

Thanks (0)
avatar
By AnneM09
03rd Nov 2010 21:50

Thanks Again

Thanks to everyone who has contributed. It's been good to get so much feedback. It has made me realise that there is so much more to consider than I initially believed. And all this before I even think of ways of marketing my practice! I shall let you know how I get on in a few months when - hopefully - I will have my first few clients.

Thanks (0)
avatar
By scohen
04th Nov 2010 15:35

Starting up

Business plan? Marketing plan? And picking up on one thread, join a networking group for:

socialeducationcontactsreferralsclients

in that order. If you are on your own, being able to chat to other small business owners about anything to do with a small business is really useful. Some have presentations which are educational and useful - get loads of tips on all the things that have been mentioned already. Contacts - people who you might buy things from, who will want to give you a good service and for you to recommend them; don't expect specials, just because you belong to the same "club", but you might get some. If you think you can do it comfortably, offer to do a presentation ... and show a little of your expertise without selling. THEN you might get referrals or clients from the group or their contacts.

Many accountants recommend Federation of Small Businesses to their clients, so why not give it a go. A range of different offerings, some areas have regular networking events.

In terms of accounts software, I'm by no means an expert, but as mentioned above, internet-based or Cloud solutions may be a good way to go.

Be really RUTHLESS with your time management so you have time to do everything you need to run your business, deliver your service and have a life. Be prepared to outsource - virtual PA, answering services etc.

Be really GRACIOUS with people and yourself - you will not get everything right first time and it will take time.

Enjoy it

Sue

Thanks (0)
avatar
28th Nov 2010 15:29

Anti Money Laundering Compliance

Re your requirements to comply with anti money laundering - our "Anti Money Laundering Compliance Plus" software is a fully automated system that allows you to record all the AML data for all your clients plus it deals with all other aspects of AML compliance.  It guides you through the process of compliance, highlighting which areas are non-compliant/require action.
The software is far more than a series of checklists:

The software provides expert help, hand-holding and "wizards" within the software as to what is required to achieve complianceIncludes built-in Electronic ID checks at reasonable costCovers all aspects of compliance recording and monitoring including: Details of all clientsKnow Your Customer informationRisk AssessmentRecording of associated persons of all clients together with supporting ID checksFirm’s Policies & ProceduresStaff trainingStaff confirmations of money laundering awarenessRecording suspicions and reporting to the MLRODetailed help filesBuilt-in facility to download and search the regulations and key guidance notesBuilt-in facility to download and search the latest HM Treasury’s Consolidated List of Financial Sanctions Targets in the UKAutomatically identifies non-compliant areas and highlights the actions required in order to prevent non-complianceScans and saves supporting documents within the software or attaches existing supporting documentsFull integration with PC Share Register Plus, company secretarial software and also Sage Cosec softwareInbuilt free Companies House check of company dataEasy import of client records from other software via generic CSV files from other software packages

Take a look at the short videos on the website that will give you an insight into the way it works - see www.amlcplus.co.uk/videos.htm   See also the list of features - www.amlcplus.co.uk/features.htm

The system has inbuilt ID checks (including PEP/Sancions checks) supplied by GB Group at £3.00 per check and inbuilt PEP/Sanctions checks only at £1.25 per check, with no minimum usage requirement - see www.amlcplus.co.uk/AMLSearch.htm

Pricing is according to the number of clients and starts at £95 p.a. - see www.amlcplus.co.uk/pricing.htm

In order to evaluate the software you can download a copy and run it as an evaluation copy with no time limit - see www.amlcplus.co.uk/download.htm

The software has been developed in conjunction with a leading provider of UK Money Laundering Compliance expertise, SWAT UK Limited, in order to ensure that the software achieves all its objectives and to provide the expert help etc. within the software.

Ian Burgess
BHIS Ltd.

Thanks (0)
avatar
28th Nov 2010 15:52

Eh?

I wasn't aware that this was a free advertising thread - can we all have a go?

Thanks (0)