I think I am almost there with all the paperwork to sort out beforestarting trading, however, despite hours searching and finding a lot of conflicting information, I am still unsure about a few thngs and it'd be great to have the opinion of seasoned book-keepers!
I haven't qualified/passed exams with the official book-keeping bodies yet and I have been approach by one prospective client to do quite basic book-keeping for him (he has a certified chartered accountant who deals with his returns etc).
1)My first question is re PII, I think my income should be 20k tops for the first year (in reality, more likely to be around 10k), would indemnity to 250k be too low?
2)Maybe more crucially,do I need a practice certificate or any official qualification at the moment? And if not, are there certain things I cannot do/shouldn't do?
3)I found out today (!) that his company doesn't actually have any book-keeping system in place (they merely file stuff away and give everything to their accountant at the end of the year). I had been told initially that they were using excel but hadn't been told they were not handling any book-keeping at all.Am I legally allowed to put these systems in place (knowing that I am not qualified)?
I have handled my own book-keeping for years (my accountant has always been very pleased with the presentation of my accounts and never mentioned any mistake) and before that, have dealt with the accounts to trial balance of a small company (I was on their payroll) si I feel quite confident I could put the right system in place for this new client, however, I do want to keep things legal.
And of course, would I be reasonable for me to renegociate my rates for this task?
4)Today also, he did mention he might like me to process his vat returns and do some analysing for him...he knows I am not certified/qualified and although it's something I am confident I could take on, I am unsure I can do this legally without qualifications.
I am so sorry this is so long.
Thank you in advance to whomever will have the kindness to give me their take on my issues.
For a negligence claim to be successful there must be an enforcable duty of care, that duty must have been breached and loss must have resulted.
The negligence claim is to put the person back n the position that they would have been in had the breach not occured.
For the clients that you are looking at can you see your actions causing them to be in a position of loss greater than your PII cover (which you indicate is £250k).
I think that all in all £250k is more than sufficient for your needs (£100k would probably have sufficed but if it's not that much more going for the higher amount doesn't hurt).
2) You are restrictd only by the supervisory bodies that you are a member of. People with no qualifications can quite merrily call themselves accountants! This causes all sorts of problems for the profession and I do not think that it is a situation that will continue indefinitely.
At the moment provided that you are not even a student of a body then you can do as you please.
Once you become a student you are restricted to the most draconian set of rules of a body that you are a member of. So, for example, I was an associate memebr of the ICB and a PQ student with the ACCA. Under my ICB membership I was allowed to do far more than under the ACCA qualification but the ACCA requirements being the stricter took precedence.
3) We do it all the time. Many times people turn up on our doorsteps with a bag / shoebox of receipts and from there turning it into something that the accountant can get there teeth into is more often than not down to us.
If the client has a preference for a specific system make them aware that if software is to be purchased specifically for their business then this will increase your charge to cover the price of the software.
A better approach is to try and coax clients onto your companies standard package that you use for your other businesses. Good options are things such asVT Transaction+ or Quickbooks or one of many cloud offerings (I'm not a big fan of those but many bookkeepers use them).
Sage is the industry standard but for people in our line of business where we have multiple clients the multi client licence can prove ridiculously expensive.
4) See (2) above. VAT is nothing to be frightened of provided that you get it right. Make sure that the client understands that it is their responsibility to supply you with all of the records that you need in a timely manner and that payment on time is purely down to them!
5) The question that you didn't ask! Try and get the client onto standing order to help with your cashflow.
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.
Thank you so much for coming to the rescue once again. This is putting my mind at rest. Sounds like your ICB vs ACCA must have been incredibly frustrating and restricting! I'll make sure I am very clear on what his responsabilities and mine are on my letter of engagement - he's the arty type so I think getting everything black on white is the way forward with him! And I guess we have to thank the fact that some clients are like that (otherwise there wouldn't be work for us)! I used to work with Sage Line 50 and although it was a very comprehensive accountancy software, it was soooo expensive (and boy, when things go wrong, they do go wrong!) so I am not even dreaming of purchasing it at that stage. I think I'll ask him to speak to his accountant directly to make sure what I'd like to implement would work at their end as well. Thans for the standing order tip. I think I'll mention I'd like to be paid that way after the trial period and we have a better idea of how many hours per month he needs of me...fingers crossed but it looks like his financial position and his cash-flow are pretty healthy!
Hope you are doing something nice tonight, Cornflake
