Hi, I am currently studying the ICB courses in bookkeeping and am looking to set my own business up. I am in that stage of business planning and would like to know a couple of things:
Is it best to become a self employed or a limited company? In terms of software I have read sage is the best?
Also has anyone taken a franchise? Having looked at a few they seem a bit much?
Many thanks for your thoughts, comments and suggestions.
Depends on what your expected profit level is whether more beneficial going as sole trader or ltd company. Personally would always go the ltd company route to limit personal liability, make use of tax advantages. You would need to get the appropriate insurance and MLR requirements in place.
The most important thing is generating the work rather than the vehicle you operate through.
Personally i would agree that SAGE is the best accounting software but it is pricey. Though as they say you only get what you pay for. Get to know whatever software you intend using inside/out so you can sell your credentials over someone who does similar. I think SAGE tends to be used by most small businesses.
Would avoid the franchise route. As you say can be pricey.
Many thanks for your comments. I think as well as limiting liability I aslo think it will protray a better image to the customer.
I have been looking at the different types of insurance and have found some quite competitive quotes.
I have found recently that while studying the ICB course that they have changed the goal posts in terms of associate membership and that you cannot complete payroll or self assessments until you have completed their exams.
The supervisory bodies regularly have shake ups with their qualifications. Both ICB and AAT had changes last year. ACCA had one in 2007.
The ICB shakeup was announced last January and implemented throughout last year.
A lot of people used to take the Level I manual, Level II computing and were then able to set up in business as bookkeepers. However the ICB squelched this and now you have to pass additional exams in order to be able to practice under the ICB umbrella, and even then, there are additional restrictions on being able to offer payroll and self assessments until you have passed additional exams.
If you think that's bad though you should take a look at the restrictions that the ACCA place on you!
It is a problem and the cause of numerous threads on here that being part of a supervisory body does seem to place restrictions on you. However, what you need to weigh up is that the restrictions were put in place because so many people were ending up getting out of their depth so the various bodies have set the hurdles a bit higher in order to enforce a higher standard of membership which in turn reflects better upon them.
Downside is that it costs us all more in exam fee's and takes longer before one can make a return on such investment.
On the Limited Company question I'm in agreement. However, note that the company is a totally seperate legal entity to you for which you have a duty of care similar to that of a parent. Also, in certain circumstances the veil of incorporation can be lifted.
On the software front, as well as SAGE take a look at VT Transaction+ which doesn't have the restrictions over the number of clients that you can have on it that SAGE does. It's nice software but not as pretty as SAGE.
All the best,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Also with taking Franchise route, the clients are the franchiser's clients and if you leave the franchise, you will be unable to work in public practice for a set period (stops you poaching their clients)
the plus side of franchise route, you belong to a community who will support one another, share costs of nationwide marketing and also will be quicker in gaining work than stricking it on your own.
Like all things in life, need to weigh the pros and cons and take route that is the most suitable for you.
I personally think the restrictions being imposed on regulation are a good thing. It means people with the right experience/ qualification are doing the work for clients. What is doesn't do however is stop people with no qualifications/ regulation from trading in the industry. It is getting better though with HMRC tightening up their regulations.
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Phil Hendy, The Accountancy Mentor
Are you thinking of setting up your own practice or have you set up and need some help?
If so a mentor may be the way forward - feel free to get in touch and see how I can assist you.
I know a lot of small businesses and not a single one uses sage - so I don't think anyone could definitely say Sage is used by most small businesses. There is lot of choice when it comes to software, so ideally you just need to learn to be flexible with software. I may be wrong, but I think ICB may be losing people to IAB because the IAB are not as rigid in what qualification people have to have to join. The IAB ask members to have a qualification at the appropriate level, but only one qualification. Every IAB member MUST do CPD every year to keep up to date, but the IAB does not make any restriction on in what form and how the CPD is done (except it should be relevant), and the IAB also give credit/exemptions for experience, and does not expect members to redo exams even if its years since they originally passed them, as long as the person kept themselves up to date through experience. Of course proof is required for both when a member applies for a practice certificate. The only exception is if a member applies for Fellow, then a member needs to either have both manual & computing qualifications, or can if they can prove they have extensive experience in both up to the appropriate level, they may also be accepted as a Fellow. (Plus I forgot to add - 2 years appropriate practical book-keeping experience etc)
-- Edited by YLB-HO on Thursday 24th of March 2011 02:41:40 PM
I agree with the changes (not just saying that because I'm with the ICB ). I have spoken to many ICB members who have come across non or part qualified bookkeepers/accountants who have made a mess of the accounts. Although the ICB can't stop it alone, it is the largest and is making a very good step in the right direction.
The ICB is moving to become the industry representative in bookkeeping, working with government and other industry leaders such as: HMRC, HM Treasury, Lloyds TSB, Moore Stephens, Reed Recruitment etc.
This months ICB newsletter has an article on one of the latest firm of accountants to support the ICB and its objectives: http://www.bookkeepers.org.uk/News/1255
In order to acheive this status the ICB needs the highest standards and the best bookkeepers.
The change happening this year does not affect the majority of ICB members. If you are affected, and you are working as a bookkeeper (and good at your work ) there will be no problem with the change. Speak to the ICB for advice.
). I have spoken to many ICB members who have come across non or part qualified bookkeepers/accountants who have made a mess of the accounts. Although the ICB can't stop it alone, it is the largest and is making a very good step in the right direction.
) there will be no problem with the change. Speak to the ICB for advice.
