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Big 4 Auditor to self practitioner - advice??

Big 4 Audit Manager considering becoming a self practicioner.

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Hi all,

I'm currently a big 4 audit manager (c. 3-4 years post qualified), earn good money, but am very sick of the auditor grind and am looking at moving towards being a self practicioner.

Although I'm comfortable doing audits on FTSE100 companies and have strong knowledge of FRS and IFRS, I've literally never filled in a self-assessment form / created a set of accounts from scratch (yes I know this is laughable). I am a CA so of course do have some tax knowledge, and am very comfortable around a set of accounts. My friends from smaller firms tell me its really easy, but I just wondered whether anyone on here has made a similar jump from Corporate accounting to self-practicioner or even to a small local firm. Really appreciate any advice or perspective, but specifically:

-What would be the best way to get up to speed on the logistics/normal end to end process for a client? i.e. onboarding, and the information required etc.

-Is it worth doing an extra tax qualification (e.g. CTA)? Or better to just brush up on relevant tax specifics as they come up?

-I don't expect to be able to fully replace my current income as a sole practicioner (c £50-60k outside london), but is it achievable to be able to get to this level after a number of years having built a strong client base?

Am I crazy for even considering this as an option? It's not a move I have really seen any collegues in Big 4 accounting make. Really appreciate any perspectives on this. I would also consider paying for a mentoring service from someone who has been in the game for a long time (if such a thing exists).

Cheers

Replies (33)

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By David Ex
28th Jun 2021 18:36

A regular question - in fact pretty sure a similar question was asked in the last week by someone qualified but no experience in typical small private practice.

If your “friends from smaller firms tell me its really easy” why not speak to them? I’m not in practice but I wouldn’t think for a moment it’s either “really easy” or even just “easy”.

Have a read of some of the typical client issues on Any Answers. How many could you deal with?

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Replying to David Ex:
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By Michaell
28th Jun 2021 19:29

David Ex wrote:

A regular question - in fact pretty sure a similar question was asked in the last week by someone qualified but no experience in typical small private practice.

If your “friends from smaller firms tell me its really easy” why not speak to them? I’m not in practice but I wouldn’t think for a moment it’s either “really easy” or even just “easy”.

Have a read of some of the typical client issues on Any Answers. How many could you deal with?

I've maybe been a bit brief there, I don't for a minute think running a practice as a self-practicioner is easy - what I'm getting at is that the technicals behind submitting a self-assessment are pretty straightforward in the majority of cases. Unfortunately the individuals I've mentioned work with me just now so I wouldn't want to give away that I'm looking at other career options.

I guess the root of my question is that I understand the technicals behind what's required of a self practitioner, but I'm trying to work our the best way to get up to speed with how things ACTUALLY work day to day (not just textbook technicals). i.e. what is the list of things typically requested from a new client, how does it work acting as an agent with HMRC etc. etc.

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By tom123
28th Jun 2021 19:19

Why would you want to do this?

It's not 'laughable' that you haven't filled in a self assessment form - after all, I haven't apart from my own / the odd friend.

There are plenty of routes in accountancy careers.

Work to your specialism - or at least move to a large industrial client that can use your big company experience.

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Replying to tom123:
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By Michaell
28th Jun 2021 19:36

tom123 wrote:

Why would you want to do this?

It's not 'laughable' that you haven't filled in a self assessment form - after all, I haven't apart from my own / the odd friend.

There are plenty of routes in accountancy careers.

Work to your specialism - or at least move to a large industrial client that can use your big company experience.

I've always wanted to run my own business and am an entrepreneur at heart. While the work might not be quite the same, there is something exciting about being able to a business grow and build your own client base. It also gives the flexibility to work where/when/in the way that I want. Big 4 firms and large corporates tend to be very old school and traditional, and the types of role I would be looking at really don't excite me.

I take your point though (i.e. the grass isn't always greener) which I recognise is a good one. I would be keen to get a view from someone who has made a similar jump to see if they have any advice/perspective.

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By paul.benny
28th Jun 2021 19:38

The question I always ask career changers to ask of themselves is "Why this?". You've understandably talked of "Why not" the thing you're doing now.

What is it you think being a small practitioner will bring you? I see here the countless frustrations of small practitioners here and I think I'm so glad I don't have to contend with that. But that's me. You must make your own choices

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By Leywood
28th Jun 2021 19:42

Dont do it.

But if you really must, a practical issue -you have no experience, so who will give you a practice certificate?

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Replying to Leywood:
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By Michaell
28th Jun 2021 19:50

Leywood wrote:

Dont do it.

But if you really must, a practical issue -you have no experience, so who will give you a practice certificate?

Fair enough - what makes you say don't do it?

For the practice certificate, I've been chartered for 3 years so am fairly confident that I'd be able to jump through the hoops needed to get one.

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Replying to Michaell:
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By David Ex
28th Jun 2021 20:07

Michaell wrote:

For the practice certificate, I've been chartered for 3 years so am fairly confident that I'd be able to jump through the hoops needed to get one.

https://www.icaew.com/-/media/corporate/files/helpsheets/practice/are-yo...

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Replying to David Ex:
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By Michaell
28th Jun 2021 20:14

Cheers - I'm ICAS but the requirements are pretty similar. Nothing too worrying although I'd imagine getting PII isn't cheap..

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Replying to Michaell:
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By Leywood
29th Jun 2021 12:20

Reasons I say dont do it - MTD/dealing with MDTP/dealing with the nightmare that is HMRC/software houses constantly making promises, increasing costs and not delivering, clients expecting you to fix things and be a miracle worker after they have made their mistakes, amongst other things. On top of a nightmare year of furlough claims and the rest. Just have a wander round this site and see the number of folk who are looking to get out.

That said, I do have days where I love my job, but they are becoming fewer and fewer.

On the PC issue, surely you have to prove you have the experience, so just how will you jump through those kind of hoops? You shouldnt be practising on the unsuspecting public. Can you get some of this experience where you are or with some contacts you have elsewhere as this would be invaluable.

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Red Leader
By Red Leader
28th Jun 2021 22:48

For a Big 4 Audit Manager, there would be a massive drop in earnings in the early years.

My path: Big 8 training contract (2 years audit / 1 year tax) -> Big 8 post qual tax dept -> Financial Controller small businesses -> self employed consultant -> sub contractor to small practice -> my own practice.

You have to get experience somehow in small practice. Most useful way is sub con in small (or small/medium) practice. The technical knowledge you need is small business/personal tax + modern bookkeeping s/w methods. Audit is pretty well redundant knowledge.

All that counts for naught if your marketing fails. You would then end up a technically competent accountant with not enough clients.

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Replying to Red Leader:
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By Michaell
28th Jun 2021 23:30

Appreciate your response and honesty.

The last few comments have made me reconsider things. Your suggestion of sub-contractor/freelance work is a good one and I think is the most sensible compromise - so I think that will be the focus of my next few months while I brush up on tax and get further advice from people in that end of the market.

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Replying to Michaell:
Jane
By Jane Evans
29th Jun 2021 12:36

My path isn't so far away. Big 8 auditor, then 5 years in industry working my way up to Group FC, then switch to top 15 firm personal tax (and a big drop in salary whilst I retrained and qualified as a CTA), later moved to two regional firms and then to a sole practitioner. I spent 18 years on this journey.
I have learned an enormous amount on the way. Tax needs to be learnt, and then applied, and the experience of what to do comes initially from consulting colleagues. There is no way I could do my current job without have previously had colleagues. I hope I contributed to their learning path as well.

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By Matrix
28th Jun 2021 23:17

As already mentioned, I would read the threads on here and decide whether this is what you want to do. If you are bright you can get up to speed quite quickly.

There are many benefits to running your own business if that’s what you want to do and with a lot of hard work you could achieve the same salary. It won’t make you rich though, the main benefit is the flexibility.

There are a lot of changes on the horizon, maybe find a USP. I will PM you someone who is successful with their own firm but worked as an FD too initially. I doubt you would find a mentor who would teach you how to do tax returns etc. and you learn more by doing than through exams so maybe try and move to the tax department within your firm for a few years.

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Replying to Matrix:
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By Michaell
28th Jun 2021 23:19

Thanks, really appreciate the input. I hadn't thought about a USP - will need some thinking I think. But I agree that the competition at that end of the market looks really tough.

When you started did you find the challenge to be more on the marketing side? or the technical aspect?

For the mentor point, it was more getting someone to give me pointers on running the practice (process, organisation, approach with clients etc) rather than the technical side - although I take your point that they are probably just as hard to find, even for a fee.

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Replying to Michaell:
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By Matrix
28th Jun 2021 23:48

Probably dealing with clients, although marketing and doing the work aren’t easy (the known unknowns are fine, the unknown unknowns are scary). You also have to be commercial and deal with the public which is a bit of an effort.

You need some money behind you as it takes a while to build up a client base.

I learned a lot from this forum when I started so do a search on others setting up their own practice.

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boxfile
By spilly
28th Jun 2021 23:35

What about looking for a small practice where the owner aims to retire in 2-3 years. You get all the experience you need, they get someone who will buy them out. (Assuming you don’t end up pining for some straightforward audit work and the big salary cheques).

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By Paul Crowley
29th Jun 2021 01:28

There are not many audits in general practice. FRS 105 dominates.
Pricing will be your biggest issue.
If you intended to run a practice then audit manager was not the best choice of routes to get there.
Can you take some rubbish inept records and make them compliant?
Correcting bad or non existent bookkeeping is par for the course.
At £250 for a tax return, how many tax returns will you need to prepare?

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Replying to Paul Crowley:
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By Michaell
29th Jun 2021 08:47

Thanks for this - I'm aware that there isn't really any audits in general practice and I don't think anyone is suggesting that doing what I'm suggesting is an optimal career path. The services are totally different which is the reason for my post.

My question was around the best way to get up to speed with how things are done in a small practice, and whether its possible to achieve a similar income being a self-practitioner.

I take your point on pricing though - would take a hell of a lot of self-assessments to get to £60k p.a. I was under the impression that for a full service accountant (self-assessment, annual accounts, and corp-tax) its normally 600-1k p.a.?

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Replying to Michaell:
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By bernard michael
29th Jun 2021 09:40

Michaell wrote:

Thanks for this - I'm aware that there isn't really any audits in general practice and I don't think anyone is suggesting that doing what I'm suggesting is an optimal career path. The services are totally different which is the reason for my post.

My question was around the best way to get up to speed with how things are done in a small practice, and whether its possible to achieve a similar income being a self-practitioner.

I take your point on pricing though - would take a hell of a lot of self-assessments to get to £60k p.a. I was under the impression that for a full service accountant (self-assessment, annual accounts, and corp-tax) its normally 600-1k p.a.?

I hope not or I'd starve. For the above service the normal fee range is closer to £1500-£2000

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By Duggimon
29th Jun 2021 08:51

Your application for a Practising Certificate from ICAS will require demonstration of knowledge and experience in the services you are looking to provide.

I am sure you have that more than covered in terms of accounting but with no experience in tax I would imagine they might be hesitant.

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Replying to Duggimon:
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By David Ex
29th Jun 2021 09:18

Duggimon wrote:

Your application for a Practising Certificate from ICAS will require demonstration of knowledge and experience in the services you are looking to provide.

https://www.icas.com/regulation/regulatory-authorisations/practising-cer...

Yes. The wording is “Experience & Technical Knowledge: we require to assess whether you have the necessary experience and competence to conduct the services you intend to conduct.”

It also says “The majority of rejections relate to a lack of recent relevant experience and we will provide advice to you on ways that you can obtain the relevant experience before re-applying going forward” so it might be worthwhile engaging proactively with the Institute as they are the people who make the decision on issuing a PC.

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Slim
By Slim
29th Jun 2021 09:44

Why not continue auditing but in a smaller firm with a view to becoming a partner?

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Caroline
By accountantccole
29th Jun 2021 11:53

I trained big 4 (5 in the olden days) and it was a big change of environment to go to a smaller (2 office) firm. There is a heavy tax focus on smaller clients which my big 4 background didn't prepare me for. I put myself through ATT to get my tax knowledge back up to speed but the real experience comes from working on the ground, ideally with a mentor. That also got me up to speed on marketing, compliance issues and the back office admin that goes with running your own practice.
I'd definitely look at a smaller firm as an interim step

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Red Leader
By Red Leader
29th Jun 2021 12:29

This might be of interest:
https://marktelford.co.uk/

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Replying to Red Leader:
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By Matrix
29th Jun 2021 14:14

Great minds, I mentioned Kent above.

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Replying to Matrix:
Red Leader
By Red Leader
29th Jun 2021 18:28

Ah yes, but I put in the link so I get the commission.

Only joking.

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A Putey FACA
By Arthur Putey
29th Jun 2021 15:16

You have probably enjoyed working with some interesting SMEs or PLCs. Ask yourself, why do I want to work in small practice with largely boring, needy, seedy and/or greedy clients.

Mind you, if you have done "Big 4" audits for firms that have copped massive fines for cocking them up ......

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By lja20
29th Jun 2021 16:19

I did something very similar, left Big 4 audit 14 years ago and have been working for myself for 13 years. I had a practising certificate before I left and also a couple of secondments into tax. My year between leaving Big 4 and starting up was maternity leave, time I used to up-skill my tax knowledge. My client base grew very slowly and organically. I was fortunate that I didn't need to rush that part, as I wasn't the main mortgage payer. You need to be very well read and have good technical resources to tap into, you need to recognise what you do indeed know and what you don't...
Try a secondment into the tax department? definitely try and align with a smaller practise. My whole time with Big 4 was audit/accounts prep, its now all tax compliance very different skills and everyday is a learning day. Good luck with how you take your career, I haven't looked back and have a great client base who I work really well with but do not under estimate the hard work needed to get the ball rolling!

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By M Bell
02nd Jul 2021 10:04

If you really think this is the path for you, I think the best way forward is to join a small practice for a few years and see what it is actually like on a day to day basis. There is so much to learn on a practical level , no one could begin to explain to you and things are changing all the time. I started at Deloittes in audit and then worked for a small firm for over 25 years and have been a sole practitioner for the last 3. Even with all my experience, I have never been so stressed as I am now and can't wait for retirement.

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FirstTab
By FirstTab
02nd Jul 2021 10:58

Just join a franchise and then leave after 2 years or so.

As a business owner, you should not be doing the detailed work. Your role should be on expansion and steering the business - not being a technical accountant. Most are on this site. If you want to be a technical accountant continue being an employee.

Please do not waste your time and money on https://marktelford.co.uk/or others like it - It is BS. Talk is very easy.

Read books written by reputable and well-established people not written by accountants PLEASE. Do NOT NOT NOT take business advice from accountants.

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By Bo Peep
02nd Jul 2021 11:05

Interesting. I recently trained with big 4 co. in audit myself (also studied with ICAS) and then moved straight away to a small practice (c. 10 people). I was a yard off the pace and needed to get away just to catch my breath.

Absolutely loving it so far and have ambitions in the near future to obtain a PC . I do however resonate with of the some issues already mentioned on this thread. It's 'bitty' and there are multiple challenges ahead for small practices.

You could start by approaching a small firm and doing some freelance hours to get a taste of it. There's an option to find another like-minded sole and partner up. It won't happen overnight and the first few years will be tough as you get to grips. It's also vastly different to the big FTSE100 audits and the hard bit won't be the numbers as you say it'll be the scramble to get clients, pricing and sweeping up mistake after mistake. Your clients won't have FC's or FD's, they'll have bookkeepers and/or busy MD's.

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By Rgab1947
02nd Jul 2021 11:08

When I used to take someone on from the big firms it was always the mind set which caused the problem.

Big firm experience counts for squat with SME's and smaller traders. In fact applying big firm processes/standards just loses you clients. Working on SME also requires an ability to cover everything you were taught in Uni + extra they never did.

But if you get the mind set right you are 80% there. You will certainly get more satisfaction working with SME's (Well maybe not when it involves HMRC).

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