I have recently qualified at AAT, and I am working full time as a Management Accountant, starting CIMA in August. For a while now I have been toying with the idea of quitting my 3 nights a week in a pub, to use that time working for my self as a bookkeeper if I could find the clients (which I am sure I can). I do however have a number of issues, questions and worries.
First of all, I can prepare accounts up to a TB, income statement and balance sheet for Sole Traders and Partnerships - would this be done monthly, quarterly, annually, or is it totally dependent on the size of the business.
What is expected of you as a Bookkeeper, and is the information handed back to the client to produce to the accountant, or would I send it to the accountant?
I see a lot about payroll and CIS. I don't have much experience with this, but I am more than up for learning this and all of the regulations but I find it very daunting. If somebody could briefly explain what this involves? I have been looking at payroll packages that can produce wage slips, p45's etc. Is NI and Income Tax paid to HMRC monthly, or calculated monthly and paid annually?
My aim is to gain a couple of "trial" clients, perhaps offering a very reduced fee as I try to gain the experience that I currently lack in the "real" world, any help and advice would be really appreciated from a total novice, having not had many dealing with HMRC / TAX /VAT/CIS.
Thanks
Sophie
p.s - I was thinking about purchasing a software, recommendations also welcome for this.
Have you applied for your Members In Practice registration with the AAT? If you get this, AAT will be your supervisory body under the Money Laundering Regulations, you will then need to buy professional indemnity insurance.
I'm not actually in practice myself, but I do know that you need to obtain agent registration with HMRC for the different taxes.
Regarding how often you prepare accounts, this depends on the client's requirements but I think most small businesses only want annual accounts.
If you are producing final accounts yourself, why work with an accountant? If the AAT will authorise this as part of your MIP registration then you can do this yourself.
Regarding your technical knowledge of tax, go back to your tax texts, use the resources on the AAT website and the HMRC site. This should form part of your AAT CPD.
As you have said, take it slowly and carefully with your first few clients to build up your confidence.
First of all, I can prepare accounts up to a TB, income statement and balance sheet for Sole Traders and Partnerships - would this be done monthly, quarterly, annually, or is it totally dependent on the size of the business.
- it is entirely up to you! I find it's easier to do it monthly, this helps you to spread your workload so that you don't get a huge box of random stuff at the year end. I also produce simple monthly management accounts for my clients so they can see their progress and set budgets etc. It also depends on your client's tax periods - you're not going to do it annually for example if they're sales tax periods are quarterly. So it's client specific, but I find monthly works best!
What is expected of you as a Bookkeeper, and is the information handed back to the client to produce to the accountant, or would I send it to the accountant?
- you need to keep all of the financial records of the business and you're responsible for making sure everything is included. For sole traders and simple partnerships you can file the tax returns yourself, or if you don't feel comfortable doing it you can outsource to an accountant you know, or your client might already have an accountant. This is also client specific and something you'll have to talk about when you first sign the client up.
I see a lot about payroll and CIS. I don't have much experience with this, but I am more than up for learning this and all of the regulations but I find it very daunting. If somebody could briefly explain what this involves? I have been looking at payroll packages that can produce wage slips, p45's etc. Is NI and Income Tax paid to HMRC monthly, or calculated monthly and paid annually?
- again this depends on the client too. I hate CIS and it's a pain in the backside, but you can't find everything you need to know about it on the HMRC website or elsewhere online, payroll is straightforward with the right software and training. You should run your reports monthly for entry to the books and PAYE/NI is paid by the 22nd I believe for all payments up to the last day of the previous month... may want to double check that though. I recommend sage payroll software, while expensive, it has every feature you need and files PAYE/NI automatically and all you have to do is put the company details in. Again you may want to get some training on whatever software you're on.
My aim is to gain a couple of "trial" clients, perhaps offering a very reduced fee as I try to gain the experience that I currently lack in the "real" world, any help and advice would be really appreciated from a total novice, having not had many dealing with HMRC / TAX /VAT/CIS.
I think that's the best way to do things, I find whatever I don't know I can always figure out along the way :)
Thanks
Sophie
p.s - I was thinking about purchasing a software, recommendations also welcome for this.
I would recommend quickbooks pro - not simplestart or premier. This has everything you need, is straightforward and is a one off license - not a subscription. I've used quickbooks for years and it's great for small to medium business accounting. Also it's very easy to set up and very easy to create reports, which you can export to excel, fomrat and give to your clients (who are usually pretty impressed). You can also buy payroll for quickbooks and do it all within the same software and it posts automatically - great for companies like cleaning contractors with lots of changing part time staff.
