Following a couple of topics in relation to this i thought I would start a discussion as to what people have experienced.
As I am slowly building my practice from scratch I am finding that too often I need to educate potential clients / networking groups about the difference between the two trades. Obviously there is a lot of cross-over and most Accountants offer bookkeeping though most don't tell the client that they outsource to people like us. Bookkeepers also have different levels of skills and range from 'data input' through to people with qualifications ranging from ICB to AAT, ACCA, CIMA etc etc.
I lost a job a month ago to a £1M t/o Hotel because my rate of £15 per hour was too expensive. She hired someone at minimum wage. I received a call last week asking if I could go and look at the mess this person has caused on her Sage program - which I duly did. A complete mess it is too.
Banks always ask for an 'Accountant' to verify figures to support borrowing requests - but do they really mean that?
So the question to all is how do you find the 'worlds' perception of us?
many clients don't know the difference and just assume that we are cheaper accountants or accountants for smaller businesses.
I've actually had the blank stare from a client where you have prepared eveything ready for the accountant to take over only to be met eventually with the revelation that "But I let her go when I hired you!".
Clients want advice from bookkeepers that accountants spend years acquiring the knowledge to give. I'm in the fortunate position that I know when to tell a client that they really need to talk to their accountant about a situation and my local accountants now don't get upset when I phone them and tell them about a situation and how it needs to be treated.
That was not always the case as before they got used to me some of them had a real chip on their shoulder about a bookkeeper having the audacity of telling them their job. Espechially as for a long while I didn't see fit to tell them that I'm actually a PQ myself.
This leads on to another debate of course. What do we think of ourselves!
I've sat through an hour of an ACA having a condescending rant about certified accountants yet I wonder how many ACA's could pass ACCA paper P2? (officially known as the beast and widely regarded as the most difficult of any accountancy bodies papers.... and I'm not just saying that because of my inability to pass it!).
I think that the same is true with AAT as opposed to ICB/IAB.
It's just human nature though, you would not follow a path if you didn't think that it was a good one and so you will view it favorably against it's competitors. The reality is that there are some excellent AICB's and some rubbish ACA's. Exams are an indication that you can pass exams but the real tests wait out there in the real world.
And of course where we can't even agree on a pecking order amongst ourselves how on earth is Joe Public going to know what's what and who's who in the accountancy profession.
Pretty sure that Phil Hendy posted something similar to this thread some time back. I'll have a dig around and see if I can find it.
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.
This keeps coming up and I keep saying the same thing like Shaun says, until all bookkeepers are at the same level as eachother (or understand the pecking order), there will be too much of a fuzzyness around the profession for Joe Public to understand.
When the ICB has its new membership system in place it is going to start (or increase) its advertising and pushing the difference between an ICB bookkeeper and an un-registered bookkeeper. Obviously this would be easier if everyone was registered.
I have been attending a couple of ICB members meetings, and oddly enough it would seem that those members who charge around £15 per hour or less have this problem of not being recognised more than those who charge over £20. This also kind of matches the feedback I get from members who ring in for support.
It's probably human nature, if something is more expensive it must be better???
If you are an ICB member make sure you use the crest, even if they have never seen it before, the two lions holding the shield, the unicorn, the words 'Institute' and 'Certified' have to mean something.
Then point out that you are qualified, a member of a professional body, you have a code of conduct and eithics you are bound to, you have insurance, you attend meetings/CPD etc etc
An un-registered bookkeeper might be cheaper, but they have non of this. (not saying all un-registered bookkeepers are bad, but to distinguish yourself from the person who has a calculator and thinks they are a bookkeeper)
I have waffled quite a bit sorry, and could probably waffle some more. It does annoy me when I see someone who applies to the ICB, fails misserably, but then goes out and uses the term bookkeeper anyway.
You call that a waffle James! Your an amateur! (lol)
I agree totally on the under pricing yourself comment. For the relaunch of the bookkeeping side of the business (due around the start of August) my new rates start at £20 ph. (more for bespoke Excel development work). Last time admittedly the market was a bit more difficult but I was competing based on price against people as you say that have a calculator and call themselves bookkeepers!
On the bookkeeper line personally I regard myself as an accountant but I'm not allowed to be one (ACCA rules) so I call myself a bookkeeper even though I am not now affiliated with any bookkeeping organisation. (as you know, I was ICB but stepped down due to not being able perform tasks that other ICB people could because of my ACCA affiliation).
In my case I wouldn't fit with the ICB view of a bookkeeper and I don't fit with the ACCA view of being an accountant. But I do fit with the ACCA view of a bookkeeper.
Goes back to the original point of this thrread methinks. It's all down to the perceptions of the person or organisation doing the viewing. And we just can't agree amongst ourselves as there are so many organisations with quite diverse viewpoints on the matter.
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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.
The perception I come across is that all accountants are qualified - in fact Chartered. This is, of course, not the case, anyone can set themselves up as an accountant. I'm pretty sure that bookkeepers experience a similar thing, in respect of expectation of qualification.
It is ironic that the reason why all clients need our expertise is also the stick they measure us with - money. Unfortunately, Ken's hotel found out that this is wrong the hard way.
Most clients will play down the level of work required. If I quote £300 + VAT for a couple of hours work for accounts and tax returns (and of course advice and expertise which can save hundreds of pounds), it is sometimes met with "that's great" or "really, as much as that? It's really dead easy". If it's so easy, why are they seeing me? Why not do it yourself? They can get it cheaper, of course, and sometimes it works out and sometimes it doesn't. Exactly the same can apply to bookkeeping, see Ken's struggle against someone prepared to do it (badly) for minimum wage.
I wouldn't be surprised if the bookkeeper in Ken's case wasn't even MLR compliant.
Maybe that we need to emphasise that point, and HMRC need to enforce it.
My experience, is that for the vast majority of client's and potential clients, is that their primary reason for engaging a bookkeeper (or an accountant as a bookkeeper), is for tax purposes. If there wasn't a need to file a tax return, I don't think that they would bother.
They are not bothered about return on capital employed, or liquidity ratios. Most aren't interested in the financial statements, except the one that tells them how much tax they have to pay. Start talking accruals, or debtors, they tend to glaze over, and struggle to see the relevance to their business. They have two business concerns, money in and money out.
The only people that have an interest in the financial aspect of their business, are those people i would class as having an entrepreneurial flare. In every day bookkeeping life you don't come across too many of these (well I haven't) Most are just happy to plod along in their corner shop, chippy, or white van, making a modest living.
The more I think about this issue, the more I believe it wont be resolved without statutory intervention. Imho, the provision of accounting services is a 3 tiered profession, consisting of:
1. Data Inputters 2. Bookkeepers 3. Accountants
While there's a natural overlap, each is significantly different.
Until either HMRC or Parliament defines 2 and 3, then the general public will never "get it" and unregulated practices will continue to use the system to their advantage.
In general, James is spot on, but "qualified" bookkeepers have just as much responsibility to constantly push the difference. Since becoming a member of the ICB, I've suggested to every new client that they call ICB to verify my abilities and qualifications, but I bet no-one ever has.
imho
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Wella wrote:The only people that have an interest in the financial aspect of their business, are those people i would class as having an entrepreneurial flare. In every day bookkeeping life you don't come across too many of these (well I haven't) Most are just happy to plod along in their corner shop, chippy, or white van, making a modest living.
Going off subject a bit here Bill but whilst I agree with what you are saying, I would say that HMRC's attitude of guilty until proven innocent has very much beaten the entrepeneurial spirit out of a lot of people.
Back this up with the banks stance of only loaning money to those who can prove that they don't actually need a loan.
And also a tax system that gives no assistance at all to those attempting to learn something new in order to better themselves and go on to create wealth and Its a surprise that anyone bothers to try and do anything more than just get by.
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.
You would be supprised Tony, although I cannot talk about any specific member (and I haven't looked up your record) we receive a lot of potential clients checking membership.
The number has dropped a bit now we have the directory, but not everyone is on there so the client rings us afterwards.
On the subject of HMRC recognising, the ICB is hard hitting this case, including that the ICB has rejected/expelled bookkeepers for things including not having a clue about accountancy, committing fraud, theft, even pedophilia! The HMRC are starting to realise that these bookkeepers are just registering with HMRC and that something has to be done about it.
Garry Carter CEO of ICB has been meeting with HMRC and MPs for years, change is slow but we have seen it speed up over the last 3 or 4 years. (http://www.bookkeepers.org.uk/News/1319)
See this current thread that a real person has just posted a reply to for a perfect example of what we are talking about. Note his reply was after I started this topic
I've been thinking about James posts whilst sat at the school gates and he problem that I can see with James approach is that it might come back to bite the ICB. At the moment bookkeepers can offer a wide variety of services including, when they reach sufficient level of qualification, filing of books and tax returns.
If the ICB push ahead with getting bookkeeping legally recognised I can see accountants doing the same in which case there is likely to be legally defined conflict between one profession ends and the other begins and bookkeepers will end up being the losers as accountants will want all filing of books and tax returns firmly in their ball court.
Would not a better sollution be having it legally defined in law that bookkeepers (and accountants) must give EITHER their MLR registration number OR supervisory body registration number on all correspondence in the same way that we have to give company and VAT registration numbers.
I know that internal to the ICB this is already the case but I'm thinking more industry wide so at least that way we know that at least it's a more level playing field.
The problem that I can see with the above though is who would petition the government for such as unlike the ICB's suggestion the ICB would not benefit directly from a general law that does not require membership of a supervisory body. However it would benefit from the added confidence in a profession that regulated itself in a more controlled manner than at present.
Just a few thoughts,
what do you think?
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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.
If the ICB push ahead with getting bookkeeping legally recognised I can see accountants doing the same in which case there is likely to be legally defined conflict between one profession ends and the other begins and bookkeepers will end up being the losers as accountants will want all filing of books and tax returns firmly in their ball court.
Perhaps thresholds could come into play in the way it does with Audit requirements.
I can see something happening in the not to distant future, given the rumblings from HMRC which I think James has linked (not had a chance to read them yet).
Regards
Tony
-- Edited by ADAS on Wednesday 29th of June 2011 04:27:09 PM
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
If the ICB push ahead with getting bookkeeping legally recognised I can see accountants doing the same in which case there is likely to be legally defined conflict between one profession ends and the other begins and bookkeepers will end up being the losers as accountants will want all filing of books and tax returns firmly in their ball court.
Shaun,
There is no need for the government to legally define exactly what an accountant is. They could just say that if you are a member of ACCA/ACA/CIMA then you are legally an accountant, and if you are a member of ICB/AAT/IAB then you are legally a bookkeeper. Simple.
But, my view is that there is too much overlap for there to be a true distinction anymore. Also, the term bookkeeper does the profession no good at all as the public don't see bookkeepers as accountants. I think the industry should be pushinga new term to describe bookkeepers like accountancy executive or para-accountant or something like that.
Ray
-- Edited by Ray2000 on Wednesday 29th of June 2011 08:21:36 PM
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.................just an ICB student, at the moment.
I'm not sure that to state one legally a book-keeper by belonging to ICB/AAT/IAB is simple or a cover all. It is not necessary to be a member of any body to be a good book-keeper nor it is a given that all members of a regulatory body are competent as self-employed book-keepers. Experience always comes into the equation.
Personally, amongst other things, I have been involved in book-keeping for over 40 years, however, I only joined a regulatory body when MRL came along because I'd rather pay a regulatory body than HMRC!
By being a member of this forum and looking at some of the questions asked by book-keepers who have undertaken the training (either at college or from home) and then straight after the qualifications become self-employed, it is obvious that they have a lot to learn. Please don't take this as any criticism of members here who by asking questions prove that they are responsible people who want to do the best job they can for their clients. However, what about the ones who struggle along maybe with the best intentions but take on more than they are capable of and the resulting mess that is left behind for someone else to pick up?
but the issue that I raised is that if there is an attempt to define what a bookkeeper is then by definition it will also be defined what a bookkeeper can do (so that there would be a true distinction which there cannot be whilst there is no control over who can call themselves bookkeepers or accountants).
I think that the best way to see how accountancy bodies view the work of a bookkeeper is to view what the ACCA allow PQ's to do which is perceieved to be the work of a bookkeeper and anything beyond that is perceieved to be the work of an accountant.
So, bookkeeping to trial balance, VAT and Payroll.
No advice
No tax returns
No filing accounts
No Management reports
I'm with Shiela in believing that things are nowhere near as cut and dried as you suggest. An MAAT MIP is considered an accountant (but don't mention that to anyone who is an accountant under one of the other bodies!). What about IFA's and AIA's? What about CTA and ATT? The division has to be generic rather than specific and the only way to divide down the difference between them is in the work that each party is expected to perform.
I can see what the ICB are going for with trying to formalise the title bookkeeper but If accountancy and bookkeeping get formalised I can see a lot of bookkeepers who are members of supervisory bodies being upset about where demarcation lines fall.
This is similar in so many ways to the IASB trying to define what an Asset actually is. To anyone on the outside it seems so obvious but try putting it into words that nobody can argue with! Same with defining a bookkeeper. It's not viable because the cutover to some area's considered accountancy are so close and to attempt to define such might just destroy more than it fixes.
Right, off my soapbox and wait for the fireworks.
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.
Hi Everyone, I don't much time at the moment to visit this forum, but thought I'd make a comment.
As some of you know I look after a "branch" network of bookkeepers, and every so often we get an enquiry from someone who thinks that if they use a bookkeeper to do everything, they can get the work done for far less money. We don't get them as clients, as bookkeepers who can do final accounts, tax returns etc., charge for these items at a higher rate than they would just for bookkeeping, so don't actually charge for that type of work any less than an accountant would. Charges are for knowledge and expertise, not necessarly for what you call yourself. However a title of Bookkeeper or Accountant, should a least give clients and idea of the type of work you prodominately do. Of course not all bookkeepers are happy to do final accounts etc and tell potential clients this. It is important to always do the work you are happy and confident to do at a realistic rate based on your knowledge and expertise for the work asked to provide.
If I have to do some technical research for a client, I don't charge for the time spent doing the research - but I do charge a higher rate for doing the actual work the specialist research is for as they are paying for the knowledge I have gain which is for their benefit. Otherwise why should I bother have the technical expertise - if I have to give it away for peanuts or free!
I have clients who think they can do their own bookkeeping. But what they actually do is input data. I still have to reconcile their accounts, as they do make mistakes. They have no idea how to do complicated transactions, and often input data to the wrong account or in the wrong way. Its not just about the figures, but where it goes! A professional bookkeeper would know which is the correct account to post it to and why. Also they would know what not to post it to! An example of this I came accross over 10 year ago, when when a company moved from their own leased premises to serviced offices. The part qualified "management accountant" posted all the transations to do with the move to an account called "New Office Lease costs" on the P/L. The auditors (Big 4!) disallowed it for CT purposes. When a year later I took over and reveiwed the records while I filed everything away - I realised these costs were the Removal costs when they moved offices. If they had been costs for the lease of a new office, then it would have been correct, but it was not, as the company did not take out a lease for a new office! I'd like to think a professional bookkeeper would know the difference between office move/removal costs, and new office lease costs!
I sent the copy of the (2) invoics to HMRC and confirmed they should not have been disallowed for CT Purposes and the company received a rebate of over £4k straight away.
Too many people see bookkeepers as "data input clerks". This is because too many bookkeepers are not registered with any professional body, and do not act like professional people. The ones with a really low hourly rate tend to be data input clerks, but professional bookkeeprs can and do command better hourly rates. A professional bookkeeper who can prepare accounts to trial balance so the Acccountant only has a minimum amount of jnls to do and also knows and understands what to do with the jnls can command a higher hourly rate than one who can't. This keep the Accountant happy as they are confident that the figures they have are correct and keeps the Client happy because the Accountants fees will be more reasonable as they haven't had to do a lot of extra work just to get the figures correct to use to produce final accounts and computations.
-- Edited by YLB-HO on Thursday 30th of June 2011 04:16:22 PM
like Shaun says, until all bookkeepers are at the same level as eachother (or understand the pecking order), there will be too much of a fuzzyness around the profession for Joe Public to understand.
