Hi Im currently AAT qualified and have worked in practice for 6 years, i have decided i want to earn a bit more income by setting up a part time bookkeeping business from home.
I have a few questions and would be grateful if anyone could give me any advice and information i may need.
1) Is bookkeeping only up to trial balance stage? 2) I have never used any bookkeeping software - which would be the best to learn? is it worth learning or sticking to manual records? 3) Do i have to inform anyone i would be setting up a bookkeeping practice and is a licence/insurance required?
1. No Book Keeping does include preparing the Financial Statements i.e. Profit & Loss Account & Statement of Financial Position (Balancesheet). In some cases the client do ask for tailor made reports like monthly sales/credit collection/Income statement for particular product and so on.
2. There are number of software available in the market, you being located in UK, its advisable to use SAGE. And its easy to operate.
3. Without letting people know, who will approach you? You do need to advertise, get into forums , let your social circle know about it. As regards to license, you don't need to as you being AAT, you can audit r certify any document so in this case you don't need any license.
So ...all the best and enjoy your Book Keeping!
Kavitta
__________________
Kavitta Kakkani
Head FAO & Ops
DRC KPO
Unit No. M-101,
NSG IT Park, I.T.I Road,
Aundh, Pune-411007,
India
Tel:+91-20-25885433
www.drckpo.com
I am also starting up my own bookkeeping practice so thought I would jump into this thread. I have got as far as gaining Level 3 from the IAB, getting my insurance and registering as a Bookkeeper in Practice with the IAB.
However the next thing is trying to get my head round the Money Laundering Act. I have spent hours ploughing through document after document - all of them just going straight over my head!! What exactly should I be doing? Does anyone have an idiots guide / a step by step process of how to get myself compliant. I understand I need to get proof of identity for my clients - but what next??????
I would really appreciate some plain, down to earth advice - I've tried lots of other websites and it is just pages and pages of Jargon!!
1. Basic bookkeeping is up to trial balance, but a lot depends upon what experience you have going beyond that, also what you are qualified to provide, such as self assessments etc., A lot also depends upon what your client needs and what their accountant requires from you, this would be the starting point when you first sign up any clients. It is a good idea to have your client sign a `letter of engagement` which sets out all what services you will provide and also sets out your costs.
2. When first starting out, you will come across a mixture of clients using manual and computerised accounts systems. Although Sage is the more widely used there are other equally other user friendly forms such as Quickbooks. All I could suggest is that if you have never used computerised software before, you are best sticking to manual at first and look into doing a crash course in computerised accounts. The software is all pretty much the same and its something that you would need to research to gauge which type is most suited to you. Also bear in mind the costs, Sage multi user is very expensive, but you can join their Bookkeepers Club and pay monthly and recieve free updates when they come out !
3. You would need to inform HMRC to cover yourself for Money Laundering, you will need to pay £95.00 (annual fee). Also you will need Professional Indemnity Insurance , www.trafalgar.uk.com are very reasonable, check out their page, on the left hand side you will see all the different associations they provide cover for, AAT is listed. It may be an idea to contact AAT and ask them what policy they have for Money Laundering - do they have any templates you could use when first signing up a client. I am associated with ICB and they sent all their members a folder containing all you need to know about the Act and what requirements as a bookkeeper you should implement, I assume other associations do the same.
If you are registered and working under the banner of IAB, have you contacted them about Money Laundering ? If you have read my post to Darren, on point 3, I assume other associations would have already advised their practicing bookkeepers of what is required.
I can only speak of how ICB have done this, they advise that upon signing up a client you fill in a `client risk assessment` then `client compliance` forms. These are then left on file until such time as an inspection from ICB is requested.
I have spoken to the IAB and they have said they can only give copies of the official guidance - not tell me exactly what I need to know to set up a book keeping practice!! They don't offer this support. They did give me a website though but that didn't really help either (www.jmlsg.org.uk)
I am ok with the business side, marketing, pr - how to do the job etc!! It is just the legal side of working as an independent bookkeeper that I don't have a clue with.
I might have to look at joining the ICB instead if it provides more support!!
I am surprised you appear to have been left high and dry by IAB !
Sorry I have not replied sooner (Ive been away to the land of sun, sea and sangria !).
On the legal side can I suggest that when you first take on a client you do the following :-
1. Letter of engagement for them to sign, this should state exactly what service/s you will provide, frequency, fees, payment, terms and conditions. Make two copies one for client, one for you. This helps to eliminate problems such as client wanting to `add on` work that has not been agreed.
2. You will need to check upon your clients identity, are they who they say they are! Ask for a copy of their passport, something with the business name and address on and keep these on file. You will also need to apply for Data Protection.
3. Format a `Credit Application Form`, this will tie in with identity check, this should include:-
Business Name and trading Address, Telephone, fax, email. Names of Owner, Directors, Partners if applicable. Company Registration or VAT No. if applicable. Invoicing Address, telephone etc., if different from trading address. Bank Details (bankers name & address, sort code, account name, account no) How long trading for - date of commencement. References - 2 suppliers, names/addresses/telephone/contact. Company letterhead.
Your clients should not have a problem giving you this sort of info if they are legit. This may all seem a little OTT, but the fact that as a bookkeeper we have to abide by ML, it adds credibility to what we do.
