Sole practitioner just starting out. Any advice welcome?

Sole practitioner just starting out. Any...

Didn't find your answer?

Until recently, I was an employed company accountant for a small to medium sized limited company. Due to the current economic situation, the business has seen a sharp downturn in trade, to the point that it can't afford to keep me on full-time. Rather than end up unemployed I have decided to become a self employed accountant & bookkeeper, with the company that I worked for as my first client.

I am intending to try and offer Accounts, Bookkeeping, VAT, and Payroll services etc mainly to smaller businesses and companies.

I have taken out P.I. Insurance, I am in the process of trying to register with HMRC as an agent for PAYE & Self Assesment etc.

There is obviously a lot of things that I didn't have to worry about as a company accountant, that I do now! Can anyone offer any advice on anything I need to make sure that I do, or on any of the following please?

Software:
I am used to using Sage Line 50 and Sage Payroll, but it is over-expensive, and I begrudge contributing to the Sage money milking machine. I have looked at Moneysoft Payroll Manager (thanks to the recommendations on this forum) and think it is superb.

For accounts software, can anyone recommend a good alternative to Sage, that is preferably Sage compatible? I do also use Microsoft Accounting, but I think it is more suited to non-accountants.

And what about any software for final statutory accounts (VT Accounts, Moneysoft?) or for tax?

Compliance:
I am currently qualified to CIMA Certificate level, and do fully intend to qualify further. But as far as I am aware there is no requirement for me to be qualified at all, do I need to register anywhere?

I have read a lot about MLR, any quick advice about what I need to know?

Letters of Engagement etc:
Any general do's and dont's about what to put in a letter of engagement?

Tax is an area that I need to learn more about; can anyone recommend a good source of information/guidance? I had looked at doing the ATT tax qualification, but the cost involved is money that I don't have at the moment. Buying the books and just studying at home migh be an option.

A lot of questions, I know! However, I would really appreciate any practical advice that you can offer?

Also, if anyone has some work that they would like to sub-contract, please get it touch?

MARTIN C

Replies (11)

Please login or register to join the discussion.

avatar
By User deleted
30th Jul 2008 16:45

New sole practice
Martin

Among all the other considerations, if you plan to charge an hourly rate look at the Four Four Time project timer for very easy, accurate time logging. (www.fourfourtime.co.uk)

Best Wishes
Jill

Thanks (0)
avatar
By User deleted
24th Jul 2008 19:36

You may be in for a rough ride...
The first 8 years of my career were in practice - with a lot of exposure to sole traders - but after working for PLC's for 10 years, there was a big jump for me starting my own practice. I think you may struggle on the compliance side - not so much preparing the accounts but getting to that stage (incomplete records are called that for a reason!). However, this will be nothing compared to the advice side. I studied for the CIoT exams to get my knowledge up to speed - and even then you really need to know your stuff and the implications of your advice. For instance, what do you need to consider when a client asks you whether they should incorporate?

I think you should play the long game and start off with bookkeeping, contacting every accountant you can and asking them whether you can do some work for them (either bookkeeping or accounting). I am not sure how far through you are with CIMA, but you may want to consider AAT (or even ACCA) - I'm FCMA and whilst it was ideal when I worked in industry, ACCA would have probably served me better in practice.

Although as anyone who is qualified knows, they are just letters, it's experience that really counts.

Let us know what you decide.

Thanks (0)
avatar
By User deleted
25th Jul 2008 12:36

Listen to Simon too!
Whilst I don't know you from Adam (or Eve) it may well be that after working as a company accountant in a sole charge role and having experience of reporting to directors and business planning etc - that you consider yourself to be more than a 'bookkeeper'. But I believe it is also fair to say that you should not consider yourself an accountant (generalist in practice).

So there's a gap. Too skilled for bookkeeping but falling short of a practising accountant.

Simon's comments are interesting because the services he describes fill some of the gap. And they're the sort of thing an inhouse Finance Manager or FD would get involved in in a small company. More interesting than the dull compliance work which a lot of accountants do most of the time - but less dosh. I came across a franchise the other day called something like 80:20 Financial Management. Do have a look at what they do.

Thanks (0)
avatar
By User deleted
25th Jul 2008 11:16

Madness
I am sorry but I agree with the other posts this is aboslute madness. You have no experience in tax. You need to work in a practice and learn from other people.

In your first paragraph, I am led to believe that your first client as a self employed Accountant will be your previous employer.There are dangers here in terms of status.

Thanks (0)
avatar
By amarshah69
24th Jul 2008 10:08

Unqualified
Get qualified first! It'll help you professional as well as getting in new clients!

Get some practice experience first!

Thanks (0)
avatar
By AnonymousUser
23rd Jul 2008 20:33

Listen to Eric
Eric has the right idea, aim for clients a bit bigger than the sole trader and offer more in the way of business consultancy / bookkeeping / or bookkeepers supervisor, I have many clients who have a basic book keeper and I provide management accounts monthly, sort the VAT return, basic HR and HS etc and its more than pays the bills without the hassle of tax returns, tax liabilities etc. Keep your eye over the shoulder of the A ccountant and you could do your own calculations and see if they tally for a while before taking that on.

Thanks (0)
avatar
By User deleted
23rd Jul 2008 19:51

Not crazy, but ....
But you will really need to be careful.

1) Under MLR you'll need to register with HMRC.
2) CIMA won't allow you to do work beyond TB.
3) Starting as a general practitioner without the right knowledge and experience is not realistic and is not advisable. I suggest looking at starting out as a bookkeeper and looking at ways you can build your knowledge and exoerience over time.
4) Have a look at the Practice Assurance manual from SWAT. It'll give you a good idea of what's required to run a quality practice - in terms of risks, forms and letters etc. It'll be an eye-opener!
5) I'm not sure the CIMA cert is the best qualification for you (I did it myself apart from the maths paper ...). There will be some gaps - even re bookkeeping - but you may well be able to fill those gaps from your experience.
6) ATT is a good way to go. But consider AAT first?
7) If you have experience of management accounts and communicating to the board etc. that will stand you well as a bookkeeper. Many bookkeepers don't really have these skills developed whilst many accountants have little real experience of running a business. Apart from their own that is.

Thanks (0)
avatar
By User deleted
23rd Jul 2008 17:36

Charges
Make sure your fees are high enough; don't try to get low-quality clients by offering very low fees. Ensure that you have robust pro forma engagement and disengagement letters before you take on any clients. This is VERY boring, but crucial.

Thanks (0)
avatar
By AnonymousUser
23rd Jul 2008 17:15

Mentor

You should find a friendly accountant with whom you overlap (ie not a direct competitor) not just so that you can do bookkeeping and PAYE for his clients but also so that he can be a sort of mentor to you in the early stages.

As the first respondent implied, you don't really know what you are letting yourself in for going from management accountancy to general practice. I had been employed in general practice for 15 years without a break before I went solo. And it was still a shcok to me.

If by an amazing coincidence you are the Martin C whose path has crossed with mine several times since 1981, mainly professionally but occasionally in the "Bird in Hand" pub in Brickhill Drive, please indicate and we can have lunch one day. There is lots to talk about.

Thanks (0)
avatar
By User deleted
23rd Jul 2008 17:02

Practising certificate
One thing you haven't mentioned is a practising certificate.

You should check out with CIMA as I would imagine you will need a practising certificate for the work you are planning on doing.

Also if you are regulated by CIMA you won't need to register with HMRC for money laundering, as CIMA is an appropriate supervising body.

Will CIMA let you qualify further if you go to work for yourself?

Sorry to just ask questions but I am an ICAEW member and things are slightly different with each institute. It is worth checking the above out though.

On a more practical level, my main tip is that people expect you to know everything but you mustn't be afraid to say that you will have to check something and then get back to them. It can feel scary to say it but is a lot better than giving duff advice then later realising your mistake (if you're lucky enough to realise you've made it before someone else does).

I started on my own after 8 yrs in practice in a big firm then 5 yrs in industry. Even despite my previous practice experience I found it is a different ballgame when you are dealing with someone's livlihood and you are personally responsible for it. The breadth of knowledge required from a sole general practitioner is astonishing and I spent a couple of years preparing to go back into practice before I did so. Lots and lots of general reading up on here, reading Accountancy, Taxation, Accounting Age, HMRC website etc etc etc. (This forum is good for alerting you to things you may not have even known existed let alone could be an issue for one of your clients).

Tax is what the clients generally care about. They don't particularly care how you got to the numbers that form their accounts or even what the accounts say in most cases, they just want to know how much tax they have to pay and if there is any way they can pay less tax. As for learning about it, it is such a wide area to try to learn. Before I went back into practice I went and ordered all the ICAEW study books and went through them to check what had fundamentally changed since I first learnt it. A useful refresher before doing more detailed revision / learning.

On to software, I also have used Sage 50 and Sage payroll. For my clients I use Moneysoft payroll which I have found to be excellent. For tax returns I use ftax (ftax.co.uk) which is cheap and cheerful but if you are happy filling in a paper return is fine to do the job.

One of my clients uses Sage Instant Plus which is fairly similar to Sage 50 but has limited capabilities in some areas. Not ones you may worry about though. Obviously the benefit is that you'll be familiar with the layout and workings of it. Others use excel and even microsft money for a tiny non VAT registered. I haven't used Microsoft Accounting but have only had a quick look, generally it doesn't have great reviews on here.

Hope that helps a little,

Good Luck!

Thanks (0)
avatar
By User deleted
23rd Jul 2008 16:45

Crazy!
Martin I am sorry to be so blunt but this is madness.

You cant act as an accountant in practice without experience.

Its a different ball-game advising clients and running a practice to being a company accountant.

Get some practical experience and knowledge working for a reputable practice first. You truly cant expect to pick up snippets on a site like this to do yourself and potential clients justice.

Thanks (0)