it seems obvious that book-keeping alone is not what you are looking for as you talk about starting your own business (not just starting a book-keeping business). Bookkeeping is good for keeping proper records but you need to be able to consider costing and management accounting which only really starts at AAT.
Before spending lots of money (will end up in thousands) going down this route really get a feel for whether this is for you.
A good book for starters is Business Accounts for Book-keeping and Financial accounting courses by David Cox plus the BPP Course Companion for AAT units 1-4.
If you buy them from Amazon resellers they can be pretty inexpensive.
Work though those and then decide whether you want to progress to study AAT. You can do a skills check which after studying the above books will probably tell you that its ok to start at level III.
For AAT speak with Nick Craggs at Premier Training and / or Sonya at Eagle.
Bookkeeping and accountancy are quite incestuous in that its difficult to work out where one stops and the other begins.
I think that the best definition of what a bookkeeper is comes in ACCA regulation 8 in that a bookkeeper can perform all tasks to trail balance, VAT and Payroll work. Everything else is accountancy.
AAT is very much a crossover qualification in that you will learn absolutely everything that is part of bookkeeping as taught by the IAB and ICB plus you get onto the first rung of the ladder of a carreer in accountancy.
At the highest levels of AAT (MAAT) you can offer a well rounded accountancy service to small businesses.
It is also an excellent stepping stone to higher accountancy qualifications such as ACCA and CIMA which are still quite accessible qualifications although quite time consuming to achieve (5+ years).
You mention talking numbers and I fear that you may be under a slight misconception about accountancy as whilst the numbers are an important part, you will find that you spend much of your time studying Law, accounting standards and ethical standards. There are several accountancy exams that you do not even need to take a calculator into as there are no calculations at all.
As for at what point do you really need to use an accountant... I would say the moment that you want to turn your idea into a reality. Even if you train AAT it is still worth using the services of a good quality accountant to advise you on getting your business off the ground.
The good thing is that if they know that you are AAT and you keep good records your fee's are likely to be much lower than the person who turns up with a shoe box full of bank statements and receipts once a year.
So, as for what to do next.
Read the books, decide whether to take this forwards, if you do speak with Nick and / or Sonya, get qualified, employ an accountant, start your business.
Game plan, circa 18 month to 2 years. Quicker if you are totally commited to the project.
Sure that there is lots that I've missed but that will do for starters,
all the best,
Shaun.
-- Edited by Shamus on Thursday 31st of October 2013 12:31:24 AM
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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.
ive been reading around the forum for a week or so and find some useful stuff here; if not confusing at times especially qualifying routes.
i have a couple of questions; or is it dilemmas ?
i have no real experience of bookkeeping or accounting apart from using someone to do my self assessments over the years (construction cis)
i'm currently not working but thinking of my next move, either start my own business(not sure what),or re-train into another field(possibly bookkeeping or accountancy).
my wife has been telling me for years that i should, as i'm constantly talking numbers at her.
i'm 43yo with a desire to be able to understand how my business functions in real time if i were to get it off the ground; possibly completing as much of the bk and admin myself.
so the real questions are i suppose ...
1; should i take bk course with or without examination accreditation, is there any difference in content supplied by online institutions? what are the limitations of bookkeeping before needing an accountant? at what point do you really need to use an accountant? how much could or should i do myself?
2; if i take accredited route is it worth taking the aat way and go the whole hog so to speak? where would this leave me in terms of competency
would just like to say thanks for such a clear reply.
am just heading to bed; but the learning curve confusion is definitely shorter than it was earlier.
just one thing though
you say;
"Work though those and then decide whether you want to progress to study AAT. You can do a skills check which after studying the above books will probably tell you that its ok to start at level III."
would this mean not taking the previous levels or certs?? but being qualified after passing level III; silly Q i suppose!
i'm sure i'll be back with more..
Not a silly question at all, the qualifications are an absolute minefield. One wrong turn and it all becomes incredibly expensive and restrictive as to what you are and are not allowed to do.
if you pass the skills check (or training provider specific test) after doing the books yourself (maybe add the BPP units 1-4 revision companion to that books list) then you wouldn't have to do level II and by taking levels III and IV you would be just as qualified as someone who had taken levels II, III and IV.
Level II is important in that is the level where you study double entry bookkeeping, after that the qualification moves more towards accountancy building on the foundations that were set at level II.
If you work better with structured learning than home study then it would be worth doing the level II as well, otherwise, self study and fingers crossed if you take to it and can pass a competence test then you should be able to start at level III without any detriment to your qualification.
For more information Nicks will probably pick this up in the morning. Fear not, He's like the others here and just wants people to get the best possible start in the business so there won't be any hard sell, just plain unbiased advice.
HTH,
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.
just looking at amazon at the suggested reading list.
does it matter that publication dates on them go back a few years or not?
find it interesting that from what you say about accountancy, in that most work undertaken by them not involving calculations; that most services that i've used in the past are more than likely bk or aat or similar.
saying that i suppose you never get to deal with 'the accountant' unless seeking specialist advice or complex matters and alike.
Yes, I agree with Shaun, before you invest a lot of time and money in a course, i would do as much reading around the subject. It will also help you out if you do decide to study further so don't think of this as wasted time.
This is obviously a large decision for you, and it needs to be right. If you want to dip your toe in the water, you could do the AAT level 2 certificate in bookkeeping, which is shorter and cheaper than the whole level 2. As for if you do it on your own, in a class room or via distance learning that is another question. Afterwards you could go straight into level 3 if you wish.
At this stage you are looking at double entry nothing has changed for donkey years so you can pick up some books from ebay really cheap.
The AAT is good as it is very wide reaching and you can go into practice, (be it your own or for someone else), industry even public sector, as one of my AAT class mates did, and is now CIPFA qualified and doing really well.
Anyway in answer to your specific questions:
1, I my opinion bookkeeping is anything up to trial balance, once you start putting in provisions (even if it is just depreciation) you are in accountants territory.
2, If you are going to do a qualification and they pretty much all cover the same thing, why would you choose a qualification which isn't accredited over one that is?
Any further questions just post on here, you will find we are a friendly lot!
Kind regards
Nick
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Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
at this level its just bookkeeping and introductory management accounting. Neither have those have changed much in the past 40 years so texts slightly out of date.
When you get further into your studies there will be mention of accounting standards and legislation both of which change regularly so you will need up to date texts. Also for tax studies you will always need the very latest materials.
The one thing that has changed for the books mentioned is the rate of VAT so to calculate the VAT inherent in a VAT inclusive figure has changed from *7/47 (@ 17.5%) to *1/6 (@ 20%).
If you can live with that for now then older texts are fine.
Mine are Business Accounts, David Cox, 3rd edition (2005) ISBN-13: 978-1872962634
With the David cox book it might be worth buying the latest version ISBN-13: 978-1905777921 to save any confusion over VAT
The closer to current that you can get the better of course but I appreciate that you are just dipping your toe at the moment and need to be sure that this is for you before investing a lot of money.
For starters, if you just bought a copy of the Cox book that would be fine.
Might be worth mentioning here that I have seven full size bookcases full of accountancy books and the Cox book is still reffered to so it was definitely one of my better acquisitions over the years (looks over sholder to the Frank Woods and Alan Sangster Business accounting books, still with pristine spines after 12 years... four times the price, fraction of the usage).
Got to pop out to a clients, will talk about the non numeric knowledge base of accountants on my return,
Talk later,
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.
we crossed in the post but don't think that I've written anything that disagree's with what you've said.
Got to rush,
talk in a bit,
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.
just to answer the accredited/non accredited route.
while looking around the site and going to a few training providers,one of them offer their own in house basic ,inter,adv bk cert cheaper than accredited route; was thinking this might be a way of gaining the skillset and then doing examinations to get accredited after. not sure if my thinking is right here.
but from whats been explained here, by self study from the mentioned reading list and skill tests, then maybe it is similar in nature??but at aat level; thereby getting a more encompassing qualification.
just a brief question; what do you consider a small business? e.g turnover; staffing etc.
On the first point, I could go out and buy myself an unrecognised accounting qualification and a couple of degree's whilst I'm about it but such would be worth didly squat in the market place.
A qualifaction from a recognised supervisory body such as AAT says something about the person holding it.
For one, you will find when dealing with accountants you will get treated with more respect in that many of them came through the same route.
For another you will have the pride of having attained a quality recognised qualification that was created by the higher professional bodies (ICAEW, ACCA, etc).
And not to forget that the knowledge that it will instill in you is priceless.
Only by quality qualifiactions with set, timed, invigilated exams can you hope for knowledge to become ingrained.
Many of the unrecognised bookkeeping courses expect you to get through them then give you a certificate to say that you have.... They are like chinese meals. great for a while but two hours later you need another one.
To be honest you are much better off spending your money self studying than taking one of the unrecognised courses in the market place.
On the second question that one is pretty much how long is a piece of string.
A business is any enterprise capable of making a profit. Maybe not in the first year, maybe not in the second but it must have the potential to make a profit.
A one person company can be a business... Or it can be a hobby... The difference is the profit motive.
The official line is that a small business is anything up to £6.5m turnover with less than 50 employee's and a balance sheet of less than £3.26m
The idea of a micro business is not strictly defined in statute but personally I regard anything less than £30k turnover as a micro business.
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.
The advice provided here by Sean and Nick is excellent and, as usual on this forum, very comprehensive. In your original email you hinted at the fact that you may consider starting your own bookkeeping business and with this in mind you may also wish to consider the ICB or, indeed the IAB route. Either of these would allow you to set up in practice as soon as you are qualified, whereas the AAT require you to gain experience first.
Your original post indicates that you need the knowledge to gain the base skillset for running a business which may turn out to be a bookkeeping business.
If you do AAT you stand some chance (still small without prior experience) of getting a lower level role in practice or industry and that foot in the door is what you really need.
Also, until you go MAAT as an AAT student provided that you make no mention of any affiliation to the AAT you are allowed to practice. Once you go MAAT things become a little more restrictive, but...
You could also get straight exemption from MAAT to MIAB so if you wanted to start your own bookkeeping business that route is open to you. (ICB also give some exemptions for those approaching it from an Accountancy qualification but you have to pay for the exemptions the same as if you had taken the exam where IAB is just £25 to check your qualifications).
ICB and IAB are cheaper to take in the first place than AAT but open less doors. They are good for those wanting to set up self employed but there are issues over acknowledgement for the qualifications by accountants.
IAB do have a slight advantage on that score as IFA accountants (Institute of Financial Accountants, not independant Finacial advisors) traditionally start as IAB bookkeepers and the networking is very much both organisations working together.
However, I would still put AAT at the top of your wish list.
lol, told you that this was a minefield!... Good thing about this site is that whilst it doesn't stop it being a minefield at least we take the blindfold off and give you a map... Of course, even with a map there are always several different routes to where you want to go and the final decision is very much your own... AAT, IAB, ICB... Decisions, decisions.
__________________
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.
Read Cox cover to cover for starters then do the BPP course cover to cover and then attempt to do the entire Revision text in a weekend.
Cox will be the hardest and take the longest as its the first. Pencil in about six weeks for that text.
Aim for one chapter per day (there are 32 of them) but ensure that you take one day per week off study.
Try not to study for any more than three hours per day as after that you stop being able to process new information.
Build up a deck of index points with important points on. (Question on one side, answer on the other), for example, what is the accounting equation, Capital = Assets - liabilities (or one of the other variants of that).
Within 13 weeks you should not just have got through the books and be able to do the BPP revision guide cover to cover but you will have relearnt how to learn.
Bookkeeping and accountancy are areas where it reprograms the way that you think and it is difficult to compartmentalise the learning.
To some extent you will pretty much need to study every day in order to pass the qualification... Finding the time is not as difficult as it sounds... For example, when I do the school run each day I will pick up one of six random decks of 112 cards each and then go through those in the car to ensure that the knowledge is ingrained. There's 30 mins study straight away.
Bathroom breaks are accompanied by professional body technical articles (generally 4-6 pages).
For background sound I play Mike Little lectures from Opentuition on repeat (Open tuition is a free resource, whilst aimed at ACCA many of the lectures are equally applicable to AAT).
The 10 mins here, 30 mins there, constant lectures on loop soon add up to a lot of study time that you probably never even thought that you had available.
Of course, such is no substitute for sitting down for 2-3 hours in silence with a study text and working through it slowly doing all of the examples and pondering real life scenarios related to the material.
Many moons ago I did the OU course B680 Certificate in Accounting which was about the equivalent of levels II and III of AAT. The course lasted a year and took you from nothing to a found basic knowledge.
The course materials stated that the expected study time would be 12 hours per week for 53 weeks. The reality was closer to 20 hours per week and I think that would be a good benchmark for not just attaining level III in a year but also really knowing the underlying material.
Level IV will be much more intense... BUT... Studying Level II and doing level III will have changed your learning style and whilst its difficult as there is a lot to it the ground work that you have put in at level II and III will pay dividends at the higher level making it quite achievable in 6-12 months.
Then two years down the line you can proudly look at the awarded bit of paper knowing exactly what it has taken to achieve... And those further up the food chain know what it took as well which is why AAT is the lowest level professional qualification that you stand even a chance of finding employment (employment is needed at some stage if you want to open your own practice under the MAAT MIP banner).
Its worth noting here that no single area of bookeeping or accountancy at this level taken in isolation is particularly difficult. The difficulty is inherent in the volume of information that you need to hold which is huge.
If you pursue this then it will take over your life in that many do not appreciate quite how much there is to this career path until they are a few months into it (which explains the high drop out rate).
So basically, in answer to the last question I would say that the study will be pretty much daily rather weekly.
Just realised, I didn't sugar coat that at all, sorry. AAT is hard but anything worth achieving is not going to be easy.
Good luck in your studies, sure that we are going to be talking a lot over the next couple of years.... Which was also the worrying parting line that my dentist said to me yesterday!
__________________
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.
without wanting to get too far ahead of myself (though it seems you need to in this profession) ...
Looking to the future and i did go to start my own practice; the period of employment for aat experience requirement you talk about, even though it may be quite broad in nature ,could conversely be quite narrow.
with this in mind would everything you have studied for at this point be capable of carrying you through most if not all situations that arise in practice, if the period of employment experience was the bare minimum. (I'm sure consulting here and other peers would be a help too of course.)
that being.. i'd like to get going for myself as soon as possible.
sounds like i'm really throwing the gauntlet down to myself on here, but i'm going to need a plan that will work (failure to prepare and all that...!)
