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Making it work as a sole practioner

Can it work financially with the time needed for compliance with institute requirements

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I am a qualified accountant with 10+years experience in practice and industry, thinking of starting up on my own after an extended period of time off following maternity leave.

My plan is to offer basic services such a bookkeeping, VAT and tax returns and possibly payroll. In my area, most clients would be small businesses; sole traders and small limited companies. 

I have done a significant amount of research into what my institute requires for me to be in practice as a sole practioner, there seems like there is quite a large amount of compliance and admin to do to meet the institute requirements, which I am ok with. 

My question is really whether other people who have done similar things have been able to make it work financially and how much time the compliance and admin has taken.

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By memyself-eye
31st May 2020 13:04

I quit my 'institute' years ago as they were more interested in collecting membership fees than anything else. Most 'institutes' provide zero help to one man (or woman) bands.
The biggest issue over the last few years has been the increasing legislation (MTD, GDPR, MLR to name but a few) and registration/compliance costs thereof which impinges on sole traders to a greater extent than larger accountancy practices. Then there's the cost of software.....
You will need to sign up for all this guff from the start and payroll alone these days is a nightmare - we stopped doing ANY payroll after 5 April with no regrets.
Whether you can make it work I don't know but the days when you could start small or part time and earn a decent living are probably gone.

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By Truthsayer
31st May 2020 13:12

The compliance and admin time is not huge. Most non-chargeable time is such things as marketing and dealing with software issues rather than on regulatory matters. It is perfectly possible to make this work. Assume an hour per day will be needed for non-chargeable stuff other than marketing.

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By mumpin
31st May 2020 13:26

I would say that things that are best practice, eg Letters of Engagement, I either don't do at all or am very selective with (ie only give to clients I percieve as high risk).
The other grind is verifiable CPD but that's got a lot better with online content and multiple choice. I find I can nail 21 hours over 3 days in maybe February or November when there's not much else on.
If you feel that you will enjoy the social intercourse aspect then you shouldn't let the admin aspect dissuade you.

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Hallerud at Easter
31st May 2020 13:46

For a PT practice I found all the redtape/CPD etc was roughly 25%-33% of total time spent (No institute to bother with but maintain own company books/ admin/ engagement letters/ ML/ CPD ) however if I had been full time in practice this would as a percentage have dropped significantly, I suspect down to 10-15% of total time, and once staff used that could reduce further as a percentage of total firm hours worked "lost" to admin heads on timesheets.

I found the regular big time commitment was CPD, a lot of reading, whilst the "required" minimum is not that onerous it is likely not enough, the volume of reading/knowledge required to be a competent sole practitioner is high. This is imho the reason that firms I have been with in the past had different partners/staff splitting up the responsibility and writing brief summaries re their niche for the rest of the office, a luxury the SP with no staff does not have (Though there are resources that can be purchased)

Even now, retired from practice and solely involved with one industry (property/construction), I can readily spend 10% of my nominal 21 hour working week doing reading /research/learning.

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31st May 2020 20:37

There is the argument (if you have reached your time capacity) to pay for an assistant/office manager or be one with the income level to boot.

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