I have no qualifications in Accounting or Bookkeeping, however I have been doing book keeping and VAT returns and all the rest for the past 6 years at a small company. I now want to start a book keeping bussiness of my own.
1. Where shall I start? 2. Can I open a book keeping business without any qualifications? 3. Do I need to register with any specific accounting authorities or bodies? 4. I already have VT software, TaxCalc and SAGE PAYROLL do I need anything else?
I have no qualifications in Accounting or Bookkeeping, however I have been doing book keeping and VAT returns and all the rest for the past 6 years at a small company. I now want to start a book keeping bussiness of my own.
1. Where shall I start? 2. Can I open a book keeping business without any qualifications? 3. Do I need to register with any specific accounting authorities or bodies? 4. I already have VT software, TaxCalc and SAGE PAYROLL do I need anything else?
All comments welcome.......
Are you aware of the Money Laundering Regulations?
If you are not yet aware then you will either need to be supervised for MLR by an accounting body or bookkeeping body (like the ICB or IAB) otherwise you will need to register with HMRC (cost £120 ?).
To go back to question 2 as well, yes you can open a bookkeeping without qualifications (if you go the route of registering with HMRC).
If you go the route of the ICB/IAB then you will need Professional Indemnity Insurance. In fact, you might considering getting this anyway if you go the HMRC route.
Typing this late at night is not good - I'm confusing myself let alone anyone else trying to read this. The words are all there - they just might be in the wrong order.
__________________
Never buy black socks from a normal shop. They shaft you every time.
From my understanding you can setup shop with nothing but just regestering with HMRC for MLR, but then it's best to have some qualification behind you also. If you are already experienced it should not take you long to pass all th required papers and gain practice licence.
Alfred wrote:If you are already experienced it should not take you long to pass all the required papers and gain practice licence.
Hi Ibrahim,
I had career in banking and passed ACIB (not AICB) exams In 1980s, also studied AAT up to 6 years ago, so like you had bit of a head-start in accounting knowledge/experience. Decided early July to go from early-retirement to semi-retirement and to set myself up as self-employed bookkeeper, started learning Sage 50 Accounts (local work available quoting need for it), then on 23 Aug discovered about MLR regs etc.
Decided to go with ICB to get PL, MLR, PII, etc. Not eligible for any exemptions so knew I'd have to pass all their exams. Unexpected set back so decided to blitz it! Joined ICB 26 Aug and passed L1 exam same day. Next day booked L2Manual exam for 13 Sep. In meantime did L2Computerised exam, mailed it back 6 Sep, passed it. 27 Sep booked L3M exam for 11 Oct, preparing for it now. If pass (find out same day), intend to have L3C exam mailed to me 15 Oct, return it within 2 weeks allowed, hopefully get pass result early Nov. Then u/g from ICB student member to full member, get PL, MLR, PII sorted, bus cards, etc and away we go.
In amongst ICB exams, studied with Sage workbooks, passed Stage 1 certification 5 Aug, Stage 2 on 21 Sep, took Stage 3 (final) exam 27 Sep and will get result by end this week.
If all goes to plan, in space of 4 months, I will have passed all ICB exams to Level3 and achieved full Sage 50 Accounts certification. I have just used text books+work at home (NB currently I don't work or have other commitments so have been able to dedicate myself to studies). You also need access to computerised bookkeeping s/ware (sounds like you have), I used my Sage workbooks training s/ware.
Hope this gives some idea of what's involved getting ICB qualified via exam route. With prior knowledge/experience, from standing start, with dedicated study, you could achieve ICB L2M+C within 1-2 months and L3M+C within 2-3 months. if you only need qual for sole traders+p'ships, L2 is ll you need, else go for L3 too.
Phil
ps sorry about all the edits, I shouldn't be up this early on a Sunday morning!
pps Alfred, thanks for post re mobile phone
-- Edited by PhilMcTankup on Sunday 3rd of October 2010 08:55:57 AM
-- Edited by PhilMcTankup on Sunday 3rd of October 2010 08:59:57 AM
-- Edited by PhilMcTankup on Sunday 3rd of October 2010 09:01:46 AM
Couple of things further to Phil's advice. I am with ICB with practice licence. They advised me with level 2 you are allowed to do day to day bookkeeping for ltd as long as they have a chartered accountant for year end accounts/adjustments and in my opinion that's what ltd are looking for in terms of bookkeeping,for year end they normally have an accountant anyway. With level 3 you can do the accounts up to (probably extended) trial balance so for start up level 2 is good enough, sole traders and small partnerships are fully covered in this anyway, you could get your practice licence after L2 straight away saving you time. Apart from that if you don't go with ICB/IAB you will have no restrictions in what you are allowed to offer to your clients so if you feel you got the knowledge/experience registering with HMRC can be a cheaper option but only you can measur up pros and contras. With ICB you get insurance significantly cheaper - but you don't have to have one. You can use their crest on your cards,website,etc what looks good - but maybe you and your clients are not bothered about this. If you are not with ICB you are allowed to do payroll,self-assesment tax returns,etc- if you are with ICB you have to pass the relevant exams (at a cost) to be allowed to offer these. You can get professional advice from ICB - so from HMRC, others might argue on both ;) But first of all, whatever way you choose keep your initial costs as low as possible - cost of studies and costs of setting up,too - but still find the right balance between cost and getting the word around/marketing yourself. In my opinion without having like 20-25 clients you can't make a decent living with bookkeeping unless you are lucky and good enough to get some of the big fish around who give you a fair bit of work but pays well.
In an email 26 Aug in response to a query I sent about what L2/3 membership enables me to do, ICB said... "Please note that Associate Members are covered to complete work for sole traders and small partnerships, whereas to complete bookkeeping for limited companies up to Final Accounts, full Member status would need to be achieved." This appears to be an incomplete explanation about limited company support in an otherwise comprehensive reply.
If what you say is right Attila, going on for Level 3 is only of limited (no pun intended) additional value. It is certainly something maybe to do later once business established, when will know if really need it.
Ibrahim, you have a clearer understanding of choices now.
I'm committed now so might as well go for it. If pass L3M on 11th I'll have to go for L3C too, as will need both from Sep11 to keep MICB. If I fail L3M on 11th I'll just u/g memb to AICB straight awayand set myself up to go. My letters then would be ACIB AICB, that'll confuse people!
Very interested in both your comments in this thread as I am at present considering which path to take as regards studying bookkeeping. By Final Accounts do you think ICB mean trial balance,extended trial balance or balance sheet(or something else I am not aware of). I e-mailed ICB earlier last week to ask this question,but have so far not received a reply. If anybody has any thoughts on this I would be very grateful for your input.
Sorry, bit misunderstanding before... Yes with level 2 you are allowed to do day to day bookkeeping as long as a chartered accountant doing year end. With level 3 you probably can do final accounts of ltd's as long as they are audit exempt (most of small companies are ) and they don't require accountants' report. James from ICB said before you are basically allowed to do what is in the syllabus for that level. That's to the best of my knowledge but hopefully others can confirm it. But still in my opinion you could start to trade after level 2 and slowly build up a client base - this will take time and once you passed level 3 start to provide more services. Well, unless you are planning on taking level 3 a week after you did l2, in this case no point to do any marketing with what you are allowed at level 2 but wait a bit and advertise the whole package.
Rich,
ICB seems to be very busy just recently, took them one and a half weeks to answer my email...
Your last point exactly right, if going to do L3, may as well try to get it done quickly after L2 and avoid saying "no" to ltd co customer/large p'ship enquires as not qualified to help, then soon afterwards be bidding for the same business.
I'm hoping to use my Sage skills by offering to cover companies where permanent full/part time staff are off sick etc, will do as self-employed. Asked ICB about and they say I need ICB L3C even to do that (L2C would be ok if was doing same for sole trader or small partnership, but more likely to be ltd co I guess).
Just some more thoughts... I wrote audit exempt but even that,well if i produce final accounts and get it audited than should be ok? I can see why some accountants thinking bookkeepers taking away a part of their income... Speaking against myself but I think if there is this grey area between bookkeeping and accountancy it leads to confusion in the eyes of clients,too and makes the fight for more recognition of bookkeeping harder and accountancy practices aren't goinig to help us neither. Ok they want the books in good order but they want to charge for final accounts,etc. Bookkeeping should be what it say - keeping books. Why am I saying that, I am a bookkeeper who is wanting to learn more??!! Long days of work I had, probably I should just stop thinking.... I need clarification on level 3,too...so please anybody has info let me know!
As far as I know CPA is more of an American thing and it is fairly new in England and not as recognised as Chartered or Chartered Certified Accountant (ICAEW -ACA or ACCA). I would think if you would like to be an accountant you should go for chartered qualification.
Just some more thoughts... I wrote audit exempt but even that,well if i produce final accounts and get it audited than should be ok? I can see why some accountants thinking bookkeepers taking away a part of their income... Speaking against myself but I think if there is this grey area between bookkeeping and accountancy it leads to confusion in the eyes of clients,too and makes the fight for more recognition of bookkeeping harder and accountancy practices aren't goinig to help us neither. Ok they want the books in good order but they want to charge for final accounts,etc. Bookkeeping should be what it say - keeping books. Why am I saying that, I am a bookkeeper who is wanting to learn more??!! Long days of work I had, probably I should just stop thinking.... I need clarification on level 3,too...so please anybody has info let me know!
totally agree with you on the last part about bookkeeping should be what is says - keeping books. i normally do bookkeeping up to year end and then pass to accountants for final accounts. i have always been under the view that for ltd companies there is quite abit of legal knowledge needed and the tax affairs can be coomplex and i personally have always advised a ltd company to have end of year accounts done by an accountant, i have seen in the past sets of accounts for ltd companies done by a bookkeeper and to be honest it was shocking!
Alfred wrote:If you are already experienced it should not take you long to pass all the required papers and gain practice licence.
Hi Ibrahim,
I had career in banking and passed ACIB (not AICB) exams In 1980s, also studied AAT up to 6 years ago, so like you had bit of a head-start in accounting knowledge/experience. Decided early July to go from early-retirement to semi-retirement and to set myself up as self-employed bookkeeper, started learning Sage 50 Accounts (local work available quoting need for it), then on 23 Aug discovered about MLR regs etc.
Decided to go with ICB to get PL, MLR, PII, etc. Not eligible for any exemptions so knew I'd have to pass all their exams. Unexpected set back so decided to blitz it! Joined ICB 26 Aug and passed L1 exam same day. Next day booked L2Manual exam for 13 Sep. In meantime did L2Computerised exam, mailed it back 6 Sep, passed it. 27 Sep booked L3M exam for 11 Oct, preparing for it now. If pass (find out same day), intend to have L3C exam mailed to me 15 Oct, return it within 2 weeks allowed, hopefully get pass result early Nov. Then u/g from ICB student member to full member, get PL, MLR, PII sorted, bus cards, etc and away we go.
In amongst ICB exams, studied with Sage workbooks, passed Stage 1 certification 5 Aug, Stage 2 on 21 Sep, took Stage 3 (final) exam 27 Sep and will get result by end this week.
If all goes to plan, in space of 4 months, I will have passed all ICB exams to Level3 and achieved full Sage 50 Accounts certification. I have just used text books+work at home (NB currently I don't work or have other commitments so have been able to dedicate myself to studies). You also need access to computerised bookkeeping s/ware (sounds like you have), I used my Sage workbooks training s/ware.
Hope this gives some idea of what's involved getting ICB qualified via exam route. With prior knowledge/experience, from standing start, with dedicated study, you could achieve ICB L2M+C within 1-2 months and L3M+C within 2-3 months. if you only need qual for sole traders+p'ships, L2 is ll you need, else go for L3 too.
Phil
ps sorry about all the edits, I shouldn't be up this early on a Sunday morning!
pps Alfred, thanks for post re mobile phone
-- Edited by PhilMcTankup on Sunday 3rd of October 2010 08:55:57 AM
-- Edited by PhilMcTankup on Sunday 3rd of October 2010 08:59:57 AM
-- Edited by PhilMcTankup on Sunday 3rd of October 2010 09:01:46 AM
hi phil
was interested in your post. i have been doing bookkeeping for around 7 years now from experience and learnt on the job and am doing nicely but have been thinking that i would like to get qualified properly. i looked at icb and it seemed that they cover more ground that aat, would you agree with that?
can you tell me how much in total it cost you to do all the exams with icb? i would be hoping to do them as quick as you have, i have only ever used sage and never done manual books, would this make a difference do you think? is there much benefit in doing the sage certification? also do you do many self assessment returns as this is an area that i have been asked to do previously but i had no experience of doing, what the process for completing them etc
IAB has a APL route for anyone with a lot of experience and no qualifications. Contact the IAB and ask about the APL (Accreditation of Prior Learning) route.
The ICB have an APL route, but reading your post I think you want the qualification, not just membership?
You don't need to do a course to take ICB exams, however, you might be interested in buying a text book, there is a text book on self assessment returns as well: http://www.bookkeepers.org.uk/Shop/Category/Text_Books
To qualify with the ICB you would need to first register as a student (£45).
Then I think for what you are offering (guessing by what you've said) you would need to be Level 2 qualified. This would mean doing the Level 1 basic bookkeeping (£30), the Level 2 computerised (£35) and the Level 2 manual (£60). The word manual is a bit confusing as it is more practical knowledge now.
So the complete Level 2 would be a total cost of £170.
If you wanted to do Ltds you should be Level 3 qualified, so same as above plus Level 3 Computerised (£40) and Level 3 Manual (£80), so an overall total of £290 for all Levels.
The Level 1 is an online assessment, the Level 2 and 3 computerised are home assignments, the Level 2 and 3 Manual are centre computer based tests (available monday to friday, some late nights and some weekends, depending on availability)
The Self assessment examination is £40, you could also do Payroll which would also be £40.
Thanks James for that post on costs etc. All information in one small post, very clear and helpful. I may consider doing to L2 as a result. (I know I could have just gone to your website and found out, but thought I'd let you know your posting here has value in my instance)
I was looking at the questions of the original post a few months back. Being qualified can give you confidence and as mentioned result in being able to use a body's logo on marketing material etc. In chatting to various sole traders it doesn't seem to be too much of a problem to them whether qualified or not, more experience and the option to chat to other existing clients is enough for them. It's all in the rapport built in chatting. Many business owners spend so much time working that they don't really have or want to spend the time comparing service providers. Trust seems enough for them. Ltd Co's, even small will most likely be a different story.
So yes MLR is a must.
Professional Indemnity Insurance isn't, but is a good idea. If you're a sole trader and make a mistake on someone's return that can be proven to be your fault and costing the client money, and this can be proven, then without insurance cover your pocket may suffer. (Obviously on the off chance the client was to actually find out and take the route of legal action) (Also ensure you're aware of what the insurance excludes. Insurance exclusions = plentiful!) Hiscox were willing to insure my risk despite lack of qualification (and experience!)
Public Liability Insurance. Again not mandatory. If clients are never going to come into the house on business or for a cuppa then there's no real issue. If you're going to their premises, unless you plan on creating health and safety hazards for their staff, there is no need for PL insurance.
If you work from home your Home Insurance company may well want to know that business goings on are ... going on.! (Leave that to you!)
If you don't go for the accredited/qualified route, pay HMRC; http://www.hmrc.gov.uk/mlr/ . Set yourself up as an agent; http://www.hmrc.gov.uk/agents/ . They then give you access to an agent dedicated line where they will clarify queries.
Go accredited = confidence, phone support, included PI insurance and more.
I have no experience of the benefits of the ICB helpline. Although I have not yet pressed forward in this venture personally, I have rang HMRC and got through to what I know is the 'agent dedicated line'. The clarification is always helpful. They generally confirm what is available in the Business Income Manual. They are no doubt exceptionally busy, so the ICB (and other similar organisations) helplines might be less rushed and mindful of the fact you may be new in practice and willing to give you more support.
I haven't moved forward yet because I wanted the security of employment, but my CV is not at the top of the 1000's that apply for each vacancy! As far as self employed is concerned, I feel I could do tax returns for people with simple affairs! Not tons of investments etc. When someone has much more complicated affairs I would almost definitely lose a potential tax saving somewhere. And I'm not that much of a blagger, even though I could learn on the job. The recession issue now is that smaller business owners (sole traders, partnerships) want real value for money. They probably don't want to pay a bookkeeper, to then pass over to and pay an accountant to do the tax return. They want an all in one. It's this and the fact that I daily realise how much there really is to learn to get it truly correct that has put me off. There's so much software around now that allows the interested/money saving owner to do their own books, that the market for bookkeeping/returns really seems saturated. Qualifieds, unqualifieds, bookkeepers, accountants, software etc. It really is about taking the whole worry off the client's mind. Because I feel like I can't do that, I don't think I'll take the plunge, instead trying to gain work in an accounts team. And this of course, is what Accountants feel should be the situation...leaving the work, even the simpler affairs client, to the qualified. And I believe somewhat rightly so. There is I feel however, a market of smaller business owners for the unqualified experienced one. If you find a client who doesn't mind paying for a bookkeeper AND then an end year accountant, then wahey! But then it's somewhat more likely they'll want you on site, rather than taking their work to your home.
So yes, this is some of what I learnt when looking into it all. But no, I've not done anything about it.
Maybe I'm what they call 'risk averse'. Or maybe I just don't feel right gaining trust from clients, when really I'm inexperienced.
I've waffled, but hopefully there's some decent information/clarification in there for the original poster, or any future readers. Please, freely clarify any incorrect statements I may have made! And Ibrahim... good luck and success to you. (OCT last year original post, hope things are going well)
and I forgot about the ICO, Information Commissioners Office. Registering with them for Data Protection. Depending on the information to be stored, there is a yearly registration to them too.
