I am considering setting up my own business as a book-keeper and preparing accounts for small to medium sized businesses. Of course, I
will need to start working towards gaining the appropriate qualifications and here lies the problem. There appears to be 2 main routes that I can choose from to pursue these qualifications, Institute of Certified Bookkeepers (ICB) and Association of Accounting Technicians (AAT).
Having done some internet research on both, I get the impression that ICB is aimed specifically at preparing people to run their own small bookkeeping and accounts business but not really for those who might want to work as an accountant for larger.
Conversely, I think that AAT is aimed at people who do want to pursue a high level career in accountancy but that some of the skills they teach along the way might be helpful in starting a small business.
So, if I am looking at operating as a sole trader providing a bookkeeping and accounts service to small or medium sized businesses, I think I should follow the ICB route. If I think I might want to operate as a sole trader to start with but then pursue a higher level career in accountancy later, I think I should follow the AAT route. I would be very grateful to anyone who could make things a bit clearer for me!
interesting question that's been the source of a lot of debate on the site in the past.
There are many other options besides the one's that you've identified.
Also at ICB level IV there's little difference between AAT and ICB except that the AAT qualification is recognised by the higher supervisory bodies for exemptions where ICB is not (and to a certain extent AAT is generally more recognised by employers).
I think that the best way to think of AAT is a half way house between bookkeeping and accountancy which can be quite a useful qualification for small company accounts.
Before signing up with anyone beware that the various supervisory bodies put restrictions on what those studying with them are allowed to do and some require practical experience gained in a supervised capacity in order to gain full membership.
Note also that this is going to be a major commitment of your time and available resources with no guarantee of finding either clients or a job at the end of it.
Just a couple of things to be wary of before moving forwards.
Right, you don't give any indication as to your previous experience in bookkeeping and accounts. Can you tell us a little more about your history and we'll endeavor to advise you on the various options geared towards your circumstances.
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.
I would say that you are broadly right. ICB for setting up your own bookkeeping business - AAT for employed roles, but after working for a certain period you can set up on your own as an AAT bookkeeper as well.
Trainee roles are hard to find and if you want to become a self employed bookkeeper then the ICB qualifications will allow you to go into business with no experience. Whether that is a good move, is a whole different discussion, though.
A third option is the IAB (www.iab.org.uk) which is similar to the ICB in many ways.
Hope that helps.
__________________
.................just an ICB student, at the moment.
Thanks for such a quick response Shaun.
As I am not entirely sure where I want to end up in 5 years plus, perhaps the AAT would be the best option. I say this because you point out that AAT attracts accreditation from some higher supervisory bodies for exemptions that ICB does not.
I assume that although you describe AAT as a half way house between book-keeping and accountancy, AAT would provide me with the skills to start my own business?
You're right! Just because I might get a qualification has no bearing on whether or not I might be able to secure clients. That is a risk in setting up any type of business and can only be mitigated by good marketing and making sure that you're good at what you do.
In terms of experience. I did work in accountancy 30 years ago so I'm really starting from the beginning. Once I get some basics under my belt from the course I intend to spend some time gaining experience from people who are already working in book-keeping accountancy. I am also in a fortunate position that I will not have to create a massive base of clients in a short period - just as well!!
Personally (having done both AAT and ICB) I felt that AAT was more "professional" but that is my own perception and the ICB course was quite thorough.
In terms of answering your question, I would also look into what their practising certificate covers you for. For example, the ICB doesn't cover any tax work so potentially you could end up in a sticky wicket if you get something wrong. This is where you really need to decide whether it is just bookkeeping you're going to offer or the full accounts work and then obviously get your license and insurance accordingly.
your previous experience won't help much in the short term although it may make the subject matter somewhat faster to pick up.
As touched upon by Dave, if you are working towards AAT it's also possible to take the exams of the ICB for very little extra cost then you end up in a situation of buy one qualification get one free (well, cheaper anyway).
As you've already touched upon. The AAT qualification is geared towards employment and the ICB one towards self employment although that may change in the future as the ICB qualification becomes more widely accepted due to the work that people such as James are putting in at the moment.
The AAT syllabus pretty much covers everything in the ICB one then adds to it. Think of achieving AICB as the equivalent of AAT level II. MICB would be AAT level III with some level IV knowledge.
The advantage of having multiple allegiences are primarily :
More letters after your name (equals better perceived quality of service by clients)
More resources to call upon
More support from your professional bodies (two being better than one)
The main disadvantages are :
Additional cost
Restrictions as to what you are allowed to do as with many organisations the more Draconian rules take precedence (such as the conflict between the rules of the ICB and the ACCA meaning that someone fully qualified ICB would only be allowed to offer very basic bookkeeping services even though under their ICB banner alone they would have been able to produce final accounts).
Going down the AAT path you would need to get a years supervised experience post qualification before you were allowed to practice. You would need to confirm with the AAT whether they permit ICB rules to take precedence with their qualification.
Before making any decisions also take a look at CAT as an alternative to AAT and IAB as an alternative to ICB.
I'm not making comment on which qualifications I perceive as being better (although I have a natural leaning towards the ACCA's CAT qualification as I think a lot of the ACCA) but I feel that you should at least look at all comparable qualifications before making an informed choice.
You may find it more cost effective in the long run to read a good book before signing up with a professional body.
For people who are not absolute beginers I generally advise Business Accounts for book-keeping and Accountancy students by David Cox. An equally good book is Business Accounts by Frank Woods and Sheila Robinson although that one tends to come in a tad more expensive.
One final point worth bearing in mind is that your looking at around two years of pretty much solid study with little social life to get the qualifications (although you should be able to achieve AICB faster than that and you can offer limited services to the public from that level).
Good luck with whatever route you choose and hope to see you on here as a net contributor in the not too far distant future.
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.
As touched upon by Dave, if you are working towards AAT it's also possible to take the exams of the ICB for very little extra cost then you end up in a situation of buy one qualification get one free (well, cheaper anyway).
Not sure about the AAT but the ICB exams can be taken on demand. The manual exams are sat at the same place as you do the driving theory tests so you wouldn't have to wait for the exam sitting which may only take place twice or three times a year.
__________________
Never buy black socks from a normal shop. They shaft you every time.
Thanks to Shaun, Dave, Ray and Tony for your advice over the last couple of days. This has all been very useful to me as I try to work out whether to study ICB, AAT or one of the other routes available to qualify. It clearly is not a straight forward decision so I need a little time to digest everything you have told me before I take the plunge. regardless of which course I take, I will be seeking work experience at an early opportunity so that by the time I qualify on paper I also have the relevant experience to do the job. I look forward to exchanging ideas in this forum in the future - once I know what I'm talking about!
Jonathan, have you considered the IAB (International Association of Bookkeepers)? Not only are holders of IAB qualifications able to progress to become an IAB Registered Bookkeeper but they can use their IAB qualifications to gain credits or exemptions towards the qualifications from the following UK professional bodies: ACCA, CIMA, CIPFA, ICAEW and IFA.
They have qualifications in Manual & Computerised Bookkeeping, Manual & Computerised Payroll and Sage Certified Computerised Accounting for Business courses.
You can also obtain a practicing certificate as they are an Approved Supervisory Body (ASB). Their website is www.iab.org.uk if you are interested.
Hi Shaun
I picked up on your point about requiring a year's experience post AAT qualification (Levels 2 and 3) before being granted MIP and being allowed to practice on my own. Do you know if this is just AAT's perspective or is it a legal requirement?
I intended to pursue the AAT qualifications and at the same time do work experience. That way, once I get the AAT qualification, I will have the experience to set up my own business. Clearly, I would never start a business on the strength of a paper qualification only! However, I do not want to be tied in to working full time for a company for 12 months post qualification
If it is a legal requirement to work for a year post AAT qualifiation, then I may have to pursue the ICB route, as I understand that ICB is happy for me to get the experience alongside my study.
Jonathan
it's an AAT requirement that if you want to use their letters and be an AAT member in practice you must first have one year experience signed off.
My understanding is that they are more flexible than some institutions as to who does the actual signing off but you would need to check directly with them as to who could be deemed suitable.
The AAT actually allow you to practice in a limited capacity but not mention them anywhere unless you are a MIP.
Here's a quote taken from the AAT website :
While you are studying for your AAT qualification, you can set up in practice. However, certain restrictions apply until you become a full member:
You may not advertise in connection with the AAT.
You must only undertake work within your competence and seek professional advice where necessary.
You must abide by the our Guidelines on Professional Ethics.
You are strongly advised to take out professional indemnity insurance.
If you're an AAT full or fellow member offering accountancy, taxation or related consultancy services to the public in the UK or Channel Islands, you must become an AAT member in practice.
To me, that sounds as though you are a student or student equivalent until you've got MIP status
HTH,
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.
That does not mention MLR cover, bit of a fussy area as HMRC don't like registering people who are with a professional body, even as a student, and I assume AAT don't cover students?
refer to the AAT article below which basically states that if the AAT cannot cover you then you must go via HMRC.
From HMRC's perspective that means that there is no alternate cover through a supervisory body available so they are the only option and hence surely cannot turn away the applicant (similar to my situation with the ACCA who have a similar line in their documentation).
here's the AAT article :
http://www.aat.org.uk/content/item14450/
kind regards,
Shaun.
p.s. Oops, amended because I should have quoted this bit from the article (the underlined bits come from the article, not me) :
Student members are not eligible for supervision by AAT and, if not supervised by another body, must be supervised by HM Revenue & Customs (HMRC). If you have completed level 4 of the AAT Accounting Qualification youll need to apply for full membership before joining the scheme for members in practice.
-- Edited by Shamus on Monday 12th of December 2011 11:18:13 AM
__________________
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.
Ah, I guess the AAT were not expecting you to run your own business then, but rather work in an accountants office. Which would make sense as they were setup by accountant bodies.
Does the year experience not have to be with a registered firm or company? I remember reading that somewhere but could be confused
Of course what Johnathan could do is after completing the AAT join the ICB (some extra test may be required) who would help him setup, if the experience is not required with a registered firm that is.
I do think that the ICB should review that position with the AAT (similar to the review that led to passing ACCA F3 within two years is now acceptible where previously it was not).
Someone who has passed AAT level IV will have done everything necessary (plus some) for passing AICB. I think that it's only after that stage that there is a parting of ways with the syllabuses.
ICB wouldn't lose anything as you could just charge the exam fee for exemptions in the form of a guaranteed pass (similar to the ACCA approach to exemptions).
Being more appreciative of the AAT qualification could only swell the ICB membership without any associated risk of detracting from the professional image of the ICB (AAT being a very well respected qualification).
For anyone else reading this, it is not in any way intended as an attack on the ICB and should not be considered as such. It's merely a suggestion from an impartial observer as to an inconsistency as to the cross recognition of some qualifications.
kind regards and hoping that this reaches you in the constructive manner in which it was intended,
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.
Yes I think they might, the AAT have updated some of their content I believe so this would happen normally.
The problem in the past was VAT, AAT did not cover it in as much detail as the ICB would have liked, and ended up with many AAT trained confusing VAT calucations. (most common being to work out a figure ex VAT: e.g. £100 inc VAT = 100-20%).
I believe the AAT tried taking VAT out of a bookkeeping role under the qualifications framework.
The AAT is probably the most common qualification for ICB applications via exemption so you are right in saying the ICB need to keep a good eye and make sure they are not making it too hard, but at the same time keeping standards.
