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“Accountants” that are actually book-keepers

“Accountants” that are actually book-keepers

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We’ve been trying to hire qualified accountants with 2-3 years PQE and what we’re getting are accountants who are qualified on paper but are essentially bookkeepers. They cannot produce a set of financial statements moreover understand a set of financial statements. Glaring anomalies jumping off the balance sheet i.e. directors loan debit balance of 40k when there is clearly no directors loan balance and this payment relates to something else and don’t even get me started on share capital  

Are my expectations too high or is it reasonable to expect a qualified accountant with 2 years pqe should be able to read a P&L and balance sheet? 

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By Matrix
07th Oct 2019 06:51

I don’t recruit so sorry, while I believe you, I don’t have any direct experience. However I would assume that students don’t learn about small companies in their exams. So they may not know about the Director loan account or how to look up share capital at Companies House.

What you are getting, however, is proven ability so I would expect once they have been told once, that they are bright enough to hit the ground running. If they have 2 years PQE in a small practice then ask them questions at the interview to check they are self starters.

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By thestudyman
07th Oct 2019 07:42

Matrix is correct. As a studying (almost qualified accountant), there is a stronger emphasis on big business rather than small companies. Of course you have to learn about what goes on in listed companies, but small owner managed companies are not covered as much in depth.

Tickers - what is your interview process like? Do you provide a practical interview where you can root out those who should know how to produce financial statements but cannot.

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By paul.benny
07th Oct 2019 08:54

Isn't this remarkably like the question you posted three weeks ago?

https://www.accountingweb.co.uk/any-answers/when-it-comes-to-staff-is-th...

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Replying to paul.benny:
Lone Wolf
By Lone_Wolf
07th Oct 2019 09:24

Just a tad. He's getting a bit boring, and from the tone of both questions, I would wager that the problem lies with him, rather than those he employs.

Just on here he sounds whiny. Imagine what it must be like to work for him.

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Jerome lane stewart and co
By Jerome Lane
07th Oct 2019 09:06

I think recruitment is about getting the right people and fit for your business. If there are technical shortcomings, the candidate has proven through their qualification that they have the ability to learn. As frustrating as it might be, it is worth investing the time and effort to coach them into becoming an asset to your business. It sounds like the role you are offering is a challenge and a step up for some candidates, so maybe it's more about finding the one who will embrace the role, rather than finding the model employee; even if they do exist! Good luck!

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By tom123
07th Oct 2019 09:39

What salary are you offering? Is it below the market rate?

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By JohnHilton
07th Oct 2019 10:04

You are advertising for "qualified accountants with 2-3 years PQE" yet expecting them to know as much as someone with 20 years post qualification experience. As "thestudyman" states "there is a stronger emphasis on big business rather than small companies."
There is an midguided assumption that every trainee will end up working for a large multi national, when in fact most will end up dealing with sole traders and small businesses.
Maybe you should consider someone older and more established, perhaps someone seeking a pre retirement part time position.

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By sarah douglas
07th Oct 2019 10:17

Hi

Not sure who you are getting but for example bookkeepers qualified would know this.

The issue is your part qualified have not learnt the basics.

We have found found when trying to employ people that a lot of the accountants part qualified love the word accountant but not knowing how the basic works .

A good bookkeeper would know as they check as part of original entry.

I think it is up to us in the industry to pass on our knowledge to next generation by giving them the time and explaining. I had some amazing accountants who gave me the time.

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By ireallyshouldknowthisbut
07th Oct 2019 11:43

When I qualified (relevant degree + audit route) I could/ had not:

1. Posted a live journal in an accounting system
2. Filed a VAT return, knew much at all about the system, or even knew what one looked like
3. Ever filed PAYE, or know much about how it was processed
4. Prepared any sort of management accounts outside of the exam hall
5. Even looked at the contents of a personal tax return, let alone filed one

I spent the next 3-4 years working for a Blue Chip at their head office learning 1-4 essentially from my staff. Which didn't go so well at the start....

I didn't do (5) until I started my own practice, hence still being a bit of a tax numptie.

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Replying to ireallyshouldknowthisbut:
By kenny achampong
07th Oct 2019 13:32

Its almost like a completely different job isnt it ? Qualifying as a chartered accountant for a bigger/auditing firm isnt much use in a small practice. Probably handy for a couple of those all important accounts disclosures, but balancing a set of working papers, probably not that likely.

It reminds me of a big firm newly qualified person I took on once, and I was very busy, so I just gave him a bag of statements and invoices, gave him the accounts file and told him to 'copy last year'. At the end of the day, I had a look to see how he was getting on, and things didnt look quite right, and I recognised a payment or two, and then it dawned on me. He was copying last year. Literally. He was re-writing the previous years working papers out. When I expressed some surprise, he said 'I had thought it was a funny thing to ask for'

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Replying to ireallyshouldknowthisbut:
Hallerud at Easter
By DJKL
07th Oct 2019 15:22

I suspect depends who you train with/size of office etc and then career path what you learn where and when.

Over the time I did not qualify, from 1985 1987 , I had worked on plc audits for subsidiary elements of quoted companies, prepared sole trader/partnership/small limited accounts, had a very sound knowledge of the Nissan product range, had prepared tax comps and capital allowance comps for all the SME types(though my comps were reviewed and lodged by our tax department so may have been some real howlers in them), had done vat returns, helped with larger business plans using Lotus 1-2-3 (cutting edge tech) and had spent two afternoons completing six monthly reports for insolvent companies (copy the previous one, you do not need to understand what you are doing).

I did at least, as an auditor, learn how to do a manual payroll, not that I ran any payrolls but as auditors we needed to check client operation of same. I was also a dab hand by this time at stock counts (controlling cut off), supplier statement recs, bank recs, vat recs, PAYE/NI recs, debtors circ letters and bank letters- I could even take a stab at materiality calculations and a fair bit of audit planning/sample size calculations.

My first exposure to actual tax returns/form DRG/forms P11D and completing the actual final tax computations to lodge ,plus all Companies House work, was circa 1987-1990, my first sustained exposure to tax investigation work likely similar as was learning to do financial projections myself (Supercalc this time).

From 1990 to 1994 I was away in industry (Benetton shops) learning about leasing,HR issues, more commercial aspects of the job, devising staff bonus schemes etc.

Then back in practice 1994 to 1999 when such joys as share valuation work got added to the brief plus investment business and setting up systems and controlling systems for same/reviewing these files

Plus then my brief full time flirtation with self assessment and the "New" basis of assessment .

This all culminated in my leaving practice in 1999, never to (full time anyway) return and twenty years of dealing with new matters like investment appraisals, the odd bit of discounting, a lot of legal work and an intimate view of the madness of tenants and the wonders of apportionment- it is also when I came to love Excel.

Frankly the order new skills acquired very much depends upon the roles done, the speed acquiring knowledge tends to be subject to the inclination of the individual to learn and the patience of the firm to instruct.

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Replying to DJKL:
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By JohnHilton
07th Oct 2019 19:03

" helped with larger business plans using Lotus 1-2-3 (cutting edge tech) "

That brings back memories. Actually Lotus did the job, and Excel might have lots of bells & whistles, but most of the time it really is a bit like using a Ferrari to go to the corner shop.

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Replying to DJKL:
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By JoF
08th Oct 2019 08:07

Oh my Lotus 1-2-3, I had forgotten all about that. I used it in my corporate banking days, just remember being given a raft of papers and told -go and input that in there and being showed into this dingy room with this huge machine and then just abandoned.

Re the OP, I suspect there may be a mixture of some embellishment of CVs going on/issues with selection process and reading your other post some issues with your training methods. I do also suspect that may folk these days cannot seem to use the brains they we born with, have no initiative and expect a lot of handholding, albeit with the right kind of nurturing in the early days a lot some will go on to produce the goods.

Ever thought of doing 360 degree feedback. Might be an eye opener.

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Replying to ireallyshouldknowthisbut:
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By Rgab1947
08th Oct 2019 10:50

I employed a degreed accountant straight out of Uni - [***] Lauda (Technically she knew more than me - maybe not). Gave her an SME bank recon. After a week with her desk piled high with her Uni accounting text books she admitted to one of the non degreed bookkeepers that she was lost.

Kept my mouth zipped but after two weeks even with help from the bookkeeper she admitted she was out of her depth and offered her resignation. I liked her and she did put the hours in but realised she was a lost cause.

She went to work at the Municipality and did very well. Makes you think.

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Replying to Rgab1947:
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By Rgab1947
08th Oct 2019 10:51

Seriously? Latin now *** out?

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Replying to Rgab1947:
Hallerud at Easter
By DJKL
08th Oct 2019 11:19

I am sorry, nothing is different from the 1980s, graduates back then had not done bank recs, in fact had likely never seen a cashbook, but they did know their debits and credits and picked it all up quickly. University work tended to start from the abstracts of transactions and adjustments (summary of bank transactions or even first stab TB), students never saw actual accounting records.

ICAS back then had the prelim stage of exams where the accountancy paper involved a case study with some facsimile day books/ledger cards, invoices, copy cheques etc, and that for most relevant graduate trainees was their first ever introduction to actual accounting records.

My first audit was some pension schemes for a quoted group of companies, these had manual cashbooks, I did not have a clue what I was looking at, but that is what the senior is for-to direct and teach.

So the fault imho rests with firms being unable or unwilling to train not with the graduates.

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Replying to ireallyshouldknowthisbut:
Pile of Stones
By Beach Accountancy
08th Oct 2019 18:56

Same for me, I hadn't done 1 to 4 until I worked for a sole practitioner post qualification. He taught me more about real life accounting in 6 months than 3 years of formal study.

Number 5 I learnt by doing my own tax returns...

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By Accountant A
07th Oct 2019 12:13

I think the problem is in your selection process.

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By Bob Loblaw
07th Oct 2019 12:24

Are your expectations too high? To be blunt - yes. 2-3 years of experience is not much in practice (IMO). I might just be especially dumb (I wouldn't bet against the possibility), but my first years in practice were spent gaining experience by doing general bookkeeping, tax returns, etc. I wasn't allowed near management accounts until the end of second year and even then everything was peer reviewed extensively before it was set in front of a client. You can either choose to invest in someone from the ground up, accept their limitations and train them accordingly, or you pay more for someone with the requisite technical knowledge who has extensive enough experience.

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By Justin Bryant
07th Oct 2019 12:34

This is hardly news. George Carman QC famously said some accountants are comedians etc.

There are plenty enough on this website.

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Replying to Justin Bryant:
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By Rgab1947
08th Oct 2019 10:48

Unfortunately Portia has called it a day.

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By mrme89
07th Oct 2019 12:39

You set them on. So if you are not happy with your new employee, you have failed somewhat in your recruitment process.

The option you have is to let them go on capability grounds or give them the support they need.

A good employer will accept their responsibility in the recruitment process and try and work with their new employee to bring them up to speed. Of course, some employees still won't work out but I think you have a duty to at least try.

I'm not sure how this post is any different from your last post, where you received a number of good responses. What responses are you hoping to get from this thread that are different from your original thread?

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Replying to mrme89:
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By Tickers
07th Oct 2019 18:07

The difference is that in my opinion there is a legitimate expectation that a qualified accountant at the very least should be able to prepare and understand a trial balance.

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Replying to Tickers:
By mrme89
07th Oct 2019 19:39

You are making the assumption that qualified means competent.

It is your responsibility to ensure you are recruiting the right staff.

A test prior to interview would weed a few of your problems out.

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By Vaughan Blake1
07th Oct 2019 13:56

This does sound odd. Given 2-3 years PQE means they will have had 6-7 years 'in the business'. It does beg the question "where did they train and what have they been doing for the PQE?"

It does strike me that if everything you do is on a computer, it must be quite hard to get the feel of the mechanics as to how accounts go together. A while ago a 2 year PQE accountant when asked to adjust the closing stock figure on a set of accounts confidently told me that it wouldn't change the P&L only the balance sheet!

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Replying to Vaughan Blake1:
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By Tickers
07th Oct 2019 19:43

I'm of the opinion that qualified means a certain minimum standard of competency otherwise why would we have qualifications in the first place and as part of that minimum competency a qualified accountant should be able to prepare a trial balance.

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Replying to Tickers:
Hallerud at Easter
By DJKL
07th Oct 2019 20:51

I thought I was amongst the last humans actually preparing ETBs.

Even up to 5-6 years ago I knocked out the odd one on 16 column cash sheets, and wrote and numbered my journals on 8 column cash sheets, but since then it has been excel only and even with that, with all the accounts software floating about, I thought I was in the distinct minority-a veritable dinosaur.

I thought these days getting a TB was just knowing where to point the mouse on the screen and accordingly am not surprised your expectations of younger staff actually preparing a TB are being thwarted.

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Replying to DJKL:
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By JohnHilton
08th Oct 2019 00:31

I bet the only place you can buy 16 column cash sheets now is the local museum. Next you will tell us that your calculator still has a handle on the side that you crank after every entry :)

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Replying to JohnHilton:
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By johnhemming
08th Oct 2019 08:41
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Replying to JohnHilton:
Hallerud at Easter
By DJKL
08th Oct 2019 09:13

Do not need to buy, still have old stock plus some rather neat sheets that are designed as a ETB

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Replying to Tickers:
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By paul.benny
08th Oct 2019 07:55

Qualified - at least for ACA - means passing the exams and having trained in an accredited workplace. It doesn't indicate any particular degree of practical competence.

What constitutes a 'minimum level of competence' is in the eye of the beholder. Accountancy qualifications are about so much more than the book-keeping level skills that you seem to prize.

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Replying to paul.benny:
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By Tickers
08th Oct 2019 22:08

paul.benny wrote:

Qualified - at least for ACA - means passing the exams and having trained in an accredited workplace. It doesn't indicate any particular degree of practical competence.

What constitutes a 'minimum level of competence' is in the eye of the beholder. Accountancy qualifications are about so much more than the book-keeping level skills that you seem to prize.

What constitutes a minimum level of competence is inherent in the qualification. The name of the profession also gives it away, if you can call yourself and accountant then you should be able to prepare a set of... accounts.

Tbh some of the replies on the thread are a bit concerning. I accept that I could also be a big part of the problem but posters suggesting that 2 -3 years pqe is not that much experience is very worrying. That’s approx 6-7 years of total work experience and if 3 years pqe is enough to procure a practising cert it should also be enough for an employer in an accountancy practice to rely on. Also, posters who are suggesting that trial balances aren’t used anymore?!? A profit and loss and balance sheet is a trial balance that is just presented differently. All the balances in a TB will make up a set of financial statements so if you don’t know how to prepare a tb then that means you don’t know how to prepare a set of accounts. Doesn’t inspire much confidence in the profession.

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By The Dullard
07th Oct 2019 14:07

It was just me that heard the irony klaxon then?

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By legerman
07th Oct 2019 17:43

Out of curiosity Tickers, where are you based?

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By JD
08th Oct 2019 14:25

As one wise person once said, accounts assistants are like a box of chocolates, you just never know what you are going to get. If its the right person/team fit, I would suggest starting with the basics and build from there - they will learn and your investment will payoff.

If they are unwilling to learn and don't have the common sense to make the investment needed, to get up to speed, then move on.

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By trecar
08th Oct 2019 15:48

I may be wrong but it is my understanding that qualified book-keepers are able to produce a trial balance, at the very least a set of simple financial statements and are able to display a modicum of understanding of those statements. So why the lack of respect for their profession? Accountancy has many disciplines contained within it and most can only be learnt through the the route of a lifetime of study and practical experience. In my career I have come across many experienced and qualified individuals who have dropped howlers, usually whilst under stress to meet deadlines etc. so I would be inclined to suggest less judgement and more understanding and training.

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By totalwise
12th Oct 2019 11:31

Strange, an AAT technician would be able to produce and read P&L and BS. And that's a Bookkeeping qualification.

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