what was the point in a client coming to me if they could have afforded a chartered practice. Where is my margin in this?
The question seems a little like someone hiring a Volkswagon and then the hire company putting them in an E class Merc instead. (for ACCA rather than chartered knock that down to a C class).
__________________
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.
Competence/knowledge ... If you need the chartered accountant's competence, should you have instead referred the client? Those of us belonging to a bookkeeping/accounting technicians' institute are prevented from accepting work we aren't competent to carry out - no?
Moreover, where does responsibility lie?
Affordability ... Are you offereing a "chartered" service on the cheap. Won't your clients be those who have turned away from/been turned away by chartered firms?
Margin ... if there is a margin for you, you must be overcharging?
Competence/knowledge ... If you need the chartered accountant's competence, should you have instead referred the client? Those of us belonging to a bookkeeping/accounting technicians' institute are prevented from accepting work we aren't competent to carry out - no?
Moreover, where does responsibility lie?
Affordability ... Are you offereing a "chartered" service on the cheap. Won't your clients be those who have turned away from/been turned away by chartered firms?
Margin ... if there is a margin for you, you must be overcharging?
Right, I'm totally confused.
Are you answering your own question or my reply? Your answer is as though I had asked the question rather than yourself????
You asked why would you outsource to a chartered.
I basically gave the benefits of a chartered and then said why that it isn't going to happen as the accountant would charge more than the person subcontracting the work to them (so no margin in it for me).
Maybe you misunderstood my reply.
Can you do your reply again imagining that you are talking to someone who really doesn't understand your last reply.
kind regards,
Shaun.
p.s. I won't be on the site again until late tomorrow so no rush.
__________________
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 assume you are asking the questions "should a bookkeeper outsource to a chartered practice"
The question would be why would a chartered practice look to take on the outsourcing work of a bookkeeper. I would be surprised if any chartered practice would want to do this. The margin in a chartered practice is in the accounts prep work, tax advice and add on work. Not in the bookkeeping.
If anything chartered practices would look to outsource their bookkeeping as from their viewpoint the margin isnt made there.
Leads me on to another query but will open up a separate post.
can't help but feel that the question is like a dental hygenist oursourcing to a dental surgeon.
This arrangement is only ever going to be one way around and thats the chartered outsourcing to a bookkeeper.
I suppose that the exception to that might be a bookkeeping practice offshoring work to a chartered practice in a different economic climate.
__________________
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 question was prompted by a discussion on another website where a Chartered Accountant had been asked by a bookkeeping service to prepare final accounts for a company on behalf of the bookkeeper, and he wondered what the implications of accepting the work would be. (The bookkeeper did not want the client to be aware of the chartered practice's involvement, by the way.) There seemed a certain amount of disdain for the perceived impudence of the bookkeeper to try to subcontract work "upwards" (hypercontracting, one poster called it), whereas other, more pragmatic, people thought, work is work, and if you need it, why not take it where you can get it. KPMG, for example, would accept work from smaller firms that needed sspecialist expertise.
Questions about whose client the company would be, responsibility for signing-off, and whether the ICAEW rules allowed it were raised, including what would happen if problems arose with the accounts later on.
I wondered how the folks on this site would see the problem. I tried to find the thread again to post the link, but I couldn't find it ... think it was AccountingWeb.
So ... to rephrase: if a client asked his bookkeeping firm to do work it was not capable of, or not licenced/permitted to do ... or, perhaps, just too busy to do, would it be appropriate for the bookkeeping firm to ask a chartered practice to do the work on its behalf?
This was discussed a bit on the ICB forum a while back. There are some fears around that if you is no qualified then the work should be refused. This seems to stem from the fact that to take on work then you are responsible and the client can sue you for costs. Obviously this is why we have insurance, and if you are taking on work you are not qualified for then the insurance wont cover it.
I'm a bit more pragmatic. Surely if your client has a contract with you, then you in turn have a contract with the accountant you subcontract to. The client sues you for any breach in your contract with them, you in turn sue the accountant for any breach in their contract with you.
I used an example of DVD players before. I have no idea how to build these, nor would I have the skill. Does this prevent me from selling them? No. What if I sell one and it goes wrong. The customers contract is with me, so I need to remedy it. In turn I have a contract with my supplier, or the manufacturer and they need to remedy it for me.
Personally, I don't see the big issue, but I'm sure someone will correct me.
... but if I were the company I might feel the chartered accountant had the deeper pockets, and that some kind of relationship had been created whereby I could rely on his skill and judgement, and, moreover, that I had become his client; or, even if I couldn't claim breach of contract, I could claim damages in negligence.
I would loved to help if I could understand the question.
Hi Julie,
I think that the key to this one is that it was the continuation of a debate on another site and my impression is that you needed to be party to the original debate in order to put the posts here in context.
Maybe it needs a link to the original debate to try and get to the bottom of the arguements.
Anyway, for now I'm out of this one as when I answered the actually question asked I got a response as though it was me that had asked the original question with an answer that sounded as though I was stupid for asking it... which of course I hadn't.
All in all I think that this is just one of those threads to back away from and just pretend that we were never here.
__________________
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 think the point here was that the bookkeeper outsources the accounts and tax work, not the bookkeeping.
Why would a client not go direct to the CA for the service - CA's normally charge more for bookkeeping (My last firm charged me out at £45 an hour, regardless of what I was doing). Also, for those business that don't have a great accounting knowledge, how great is it, that the bookkeeper does all the work relating to the accounts directly with the CA, and the client doesn't have to worry, but simply sign and pay at the end.
It works for the CA as most prefer to be spending their time doing Accounts and Tax work, over bookkeeping. If the bookkeeper has 50 clients, that's 50 new clients for the CA.
I do work for bookkeepers and other professionals who don't have the certificate to do the work themselves. I sign the accounts as me, and the owness is with me if there is a mistake, and its covered under my insurance - I invoice the bookkeepers client direct, showing a special discount that their bookkeeper has gained them. It works for me, as I still make money, and the bookkeeper brings me x number of clients. The bookkeeper wins because their client doesn't go looking for an all-in-one service somewhere else.
I think the issue with the situation Ian mentioned, is that the bookkeeper doesn't want the CA to sign the accounts. As Kris states Contact Law determines that the business would sue the bookkeeper, and the bookkeeper would sue the CA.
The question of the PI insurance, is an interesting one. I imagine the insurance terms has something relating to the use of contractors. I am sure there is also something in each governing body's rules, that relates to the use of subcontractors too. (I will look at mine)
All in all, I think this was a really interesting question to post on a bookkeepers website. I think the first post was maybe a little short, and Iain's second response was trying to further discuss Shaun's points, but perhaps got a little misunderstood.... But forums are about exploration as much as they are about answers, so lets embrace that, instead of picking holes :)
So.... does any body know how governing bodys feel about the work of a subcontractor being sold on by someone who cant offer the service? Has anyone got a clause in their insurance?
-- Edited by FoxAccountancyServices on Sunday 9th of June 2013 11:42:11 AM
Officially the ICB line is that you can't take on work which you are not qualified for. This means you can't outsource work you cant do. Sounds clear enough, right? Well, no. They often turn a blind eye to this in certain cases. They know of instances where bookkeepers outsource payroll when they don't hold a payroll certificate. My personal view is that it is a bit of a silly rule, as long as the person carrying out the work is qualified and insured where is the big problem?
Good point Kris. That's very bizarre. I'll look into what the AAT states... Not now tho... The sun is still shining and my garden beckons ;) got to take it while can get it!
I thought it was a very reasonable price, that was slightly below the local average. Some client's still complained though! I have never been charged out at higher than £55 not even when I was working in Cheshire (more affluent down here) I am AAT, not CA though, so it may be that which determined my charge out. I am sure my ICAEW bosses where charge out at around that price.
I think the first post was maybe a little short, and Iain's second response was trying to further discuss Shaun's points, but perhaps got a little misunderstood.... But forums are about exploration as much as they are about answers, so lets embrace that, instead of picking holes :)
lol,
flirt with Iain as much as you like but he's still married.
__________________
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.
