I wondered what everyones thoughts were on the amount and type of advice we should be offering as a bookkeeper?
While I understand the role should technically be limited to recording transactions I find myself regularly in a position where I am giving what would be deemed as tax advice.
-Deciding on the most suitable treatment of motoring expenses
-Suggesting allowable expenses that clients may have missed etc etc.
How is it even possible to complete Self Assessment or VAT returns without using some own judgement.
While I would always be careful to ensure advice I was giving was correct, I do worry about the legalities.
__________________
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.
I think it depends how you present it. I don't think there's anything wrong with presenting the options. Take mileage for instance, I am happy to provide all the information to allow clients to make an informed view on how to make the best of it for themselves.
I am happy to advise on the best way to record mileage, or help them maximise allowable expenses as I don't think this is tax advice but rather a good service.
I'd draw the line at tax planning - telling a client whether to operate as a ltd company or whether to buy or lease premises for example. I'm sure your motoring expense comparison is as good as anyone elses and as Kris says, allowable expenses suggestions is just providing a good service.
The fact that you're worried about it is probably a good sign that you know where to draw the line. State your opinion doesn't constitute advice, don't charge for it and if you think you've gone too far, write to the client afterwards advising him to discuss it with an accountant. Make yourself known to local accountants and if you begin passing business their way, then I'm sure they'll be glad to guide you here and there.
As you said Tim, I would know where to draw the line and I'm not afraid to ask for help.
I was just keen to know peoples views as the bookkeeper/accountant line seems such a grey area.
It must be immensely confusing for clients too.
It seems crazy that by definition I can produce a set of accounts, but It takes an accountant to interpret them.
I'm sure this must be a subject which is regularly raised
__________________
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 is something I feel strongly about. I never give advice (not just in bookeeping, but in any other part of life) but, to my clients, I give information, outlining the pros and cons and answering questions so that the client can make a decision. i also make sure I back up what I say with references when appropriate, especially if it's in writing or by email (I often link to the relevant HMRC website page).
this area's a complete minefield espechially when it comes to things like PII for which you will likely find that you are not covered for advice that you give.
Dependant upon your supervisory body you may even find that you are in breach of work that you are allowed to do for clients.
The issue for us though is that we are regarded by clients as cheaper accountants and are expected to offer the full spectrum of services to the same level... But for much less money.
Joe Public doesn't understand the difference between an accountant and a bookkeeper... To be honest, sometimes we have difficulty understanding it amongst ourselves... So they cannot know that these are matters that they should not be approaching us with.
Conversely though, how often do we see clients making the wrong choices and think, well that's not the most tax efficient approach.
How professional is it to not at least advise our clients that they should really seek professional advice before going down a certain path... And once you open that pandora's box then of course they expect you to expand upon that without seeking the advice from an accountant.
MAAT MIP and ICB/IAB level IV seem to be the optimal bookkeeping qualifications for this area as you can offer the advice even though it may not be as complete as if the client had gone to an accountant (not getting into the AAT being accountants debate here).
As you mention, this subject does come up a lot but usually buried in other threads rather than having a stage of it's own so nice one for giving it a bit of air space of it's own for once.
Interested to read alternate views when some more of the regulars get chance to contribute.
Talk soon,
Shaun.
__________________
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.
Interesting that you outline the qualifications where advice is permitted. I do hold IAB level IV but was not aware this was the case.
I agree that clients do see us as cheap accountants though. It would be nice to have some recognition in our own right for the job we do.
Valerie
__________________
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.
Interestingly enough, I was at a clients yesterday who lives on her own and runs a business with her son. She was extremely grateful to our discussion (not advice as I pointed out these were things to consider) on making the most of her bank interest as she had the money in a low interest paying account and also her concerns on leaving the business fairly to her family when she died. I am no legal expert but put some ideas to her so she could then discuss with her solicitor. Sometimes people like to ask questions to someone they can trust with confidentiality but who are outside the family or not direct business partners just to get a different perspective. Sometimes these conversations can be on a personal level and so often people are relieved just to have had a discussion with someone other than solicitor, accountant, etc. who sometimes can be intimidating.
I think you need to know the person you are dealing with as I must confess some clients I would not go down this line. After all, most of my clients are small partnerships or one man bands who I have been with for up to 30 years so one builds up a rapport.
Perhaps one day this will come back to bite me but as long as I am not telling them to do something illegal, I think a discussion about things is a good policy and then push them to the professional in the relevant field.
It would be nice to have some recognition in our own right for the job we do.
The ICB is having a bit of a drive for recognition of bookkeepers at the moment. Might take longer for the individual clients who are not part of the accounting industry though.
This is where having a good relationship with an accountant can help, so you can state where the line is (fussy as it might be) and suggest your accountant friend join in the discussion, or that they visit your accountant directly, to get the advice they need.
I think advice where you give facts and let the client make their own choice is different to telling a client which option to go for. For example, giving an example cash flow forcast for buying a van compared to renting it, and showing the difference in expense etc. That in my mind would not be advice, compared with telling the client to change their business model to save on taxes or something.
There's a difference between providing information and giving advice. If you simply make someone aware of options, give them a government pamphlet (or explain the gyst of it) and ask them to make up their own mind, is that providing information or giving advice? If you identify an issue you think is quite serious, you can always point it out and advise your client to seek the advice of someone who knows more about tax planning/investing/family law or whatever other specialty you're not qualifed to consult on. That's better than simply ignoring an issue you don't feel qualified to deal with.
A line I like is "It's not my role to tell you how to run your business. I heard one accountant say something like "A consultant can help you plan your battles. I'm more like the guy who shows up afterward and counts the bodies." I'm not sure most clients would appreciate the humour of that.
Did someone mention AAT? well is it a Bookkeeping qualification or an Accountancy qualification? your not getting out of this one that easily. As for giving information, i always liked the line " i could tell you, but then i'd have to kill you" but you could change it to " i could tell you, but then i'd have to bill you"
Did someone mention AAT? well is it a Bookkeeping qualification or an Accountancy qualification?
Hi Neil,
playing devils advocate again I see
Ok, I'll be contentious (totally out of character of course). I think that it's a bookkeeping qualification.
My reasoning.
Doing the entire AAT qualification will get you exemptions only from the fundamentals level papers of the accountancy qualifications (ACCA, CIMA, etc.). Thats a similar level of exemption to coming from IAB or the Open University Certificate in accounting.
The BPP and Kaplan study texts for AAT are often very cut down versions of the ACCA ones for fundamental papers F1 through F3 (there are another 11 from 14 papers to take after those before you've passed the qualification to become an accountant).
MAAT MIPs cannot be auditors or insolvency practicioners.
Now the opposit arguement.
MAAT MIPs are in all practical terms considered accountants. (Can produce and file final accounts and perform most accountancy tasks without further qualification).
They are referred to as accountants and think of themselves as accountants.
They are very well regarded espechially by the ICAEW/ICAS/ICAI who have a fasttrack program for accountants coming into the profession via this route.
Traditionally people would do AAT before moving onto one of the higher bodies but that link seems to have been severed with many happy to settle on AAT and not aspire to further qualifications that they very likely do not need.
Conclusion.
I think that AAT is an advanced bookkeeping level qualification that is an excellent stepping stone into accountancy or a finishing point in it's own right.
If it's considered an accountancy qualification then that's bringing in second division qualifications.
Would you put AAT ahead or behind IFA? Personally I think the heirarchy is :
Unqualified
IAB/ICB
AAT/CAT
IFA/AIA/ATT
ACCA/CIMA
ICAEW/ICAS/ICAI/CTA
I know that there are lots of other bodies out there but those to my mind are the main players.
No insult intended to anyone on that list no matter where they appear as to achieve any qualification is a major achievement and thougherly deserving of praise for sucessful membership of one of the bodies.
My belief is that accountant level qualifications start at IFA level and those below that are bookkeepers.
Back to you for your views Neil.
__________________
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.
An Accountant shows up afterward and counts the bodies.
Hi Timothy,
absolutely love that analogy.
One that I've heard to describe a consultant is :
A consultant is someone who you pay to borrow your watch in order to tell you the time.
__________________
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.
Huh you can call me what you like as long as you pay for it. But really Shaun i think the AAT is a Bookkeeping qualification although i'm sure it says Diploma in Accounting on the certificate. If the sponsoring bodies can't make up their minds what chance do we have? I will just be overjoyed at achieving a level 3 qualification in something i enjoy and it being a recognised one too. Funny though i haven't seen any vacancies advertising for an AAT qualified Bookkeeper, seen lots of AAT qualified Accountant positions, who's in charge of making this stuff up?
I've been reading this thread with interest, as am thinking about trying to develop a career in this area.
My level of knowledge is very limited as things stand.
I have a very basic question that I'd be grateful for some help with:
Is there a legal obligation to be qualified in some particular way before giving advice on tax, or before filling out someone's "self-assessment" for them? If so, what is the qualification required? I'm aware of the Money Laundering Regulations.
Just a flying visit so appologies that this is very brief.
Welcome to the forum patrick.
The answer to this one is both no and yes.
No you don't need to be qualified and to a certain extent you are more restricted by your supervisory bodies if you do qualify.
However (sorry, there's invariably one of those). Amongst other applicaple laws the quality of your work is specifically governed by the supply of goods and services act 1982. Even competent experienced bookkeepers and accountants sometimes make mistakes and they have Professional Indemnity insurance in place to protect them from such instances.
Someone without qualifications or experience may still be able to get PII but there will be a catch all phrase in there stating that it will only cover you for work that you are considered competent to perform.
Competence is judged by at least two years relevant previous experience and/or qualifications in the field where a supervvisory body has, by examination determined that you are competent enough to bear their credentials.
To be sued for mistakes can be very, very expensive which is why many bodies set the minimum cover at £50k to £100k as you will be expected to put the client back into the position that they would have been in had you not made the mistake.... Imagine a mistake where your error causes a bank to withdraw funding from a client!
Even if you have some previous experience in this field I would highly recommend training for membership of one of the bookkeeping bodies (ICB or IAB) if you are looking to go self employed in this field as no matter what you think that you know now, when you start training you will realise how much more there is to this and how easy it is to make a mistake.
In a nutshell, that's it. You don't legally have to be qualified but if your not you're playing a huge game of Kerplunk with the rest of your life.
kind regards,
Shaun.
__________________
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.
