my name is Gemma, I've been an accounts assistant for over 11 years and now that I have 2 small children I have decided to go alone and to do bookkeeping from home.
I have a couple of questions really as I've already got a couple of people wanting me to do their books.
They currently have an accountant submit their VAT but charge too much, how do I go about changing this?
Hi Gemma
You can add your first name via edit profile, signature option, so that it appears under the signature bar of your posts.
A bit more on the background would be useful for us - eg where have you been an Accounts Assistant - in a practice or with businesses (variety or just one, sector specific, legal status), where up to in your studies-what exams passed/with what body? What software are you used to using?
Are these potential clients Limited/sole traders and do you know what vat schemes they use (and have you got the knowledge of the different VAT schemes).
Also - are you planning on stopping at TB?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi,
I have been working within the accountancy trade and have experience in:
Farmers
Contractors
Pubs/restaurants
I have more experience in sole traders/partnerships as Ltd companies are beyond my experience and I'd rather do those under the guidance of an accountant.
I use Sage and Iris within my day job.
I never completed my AAT due to family commitments and have all my experience behind me.
They currently have an accountant submit their VAT but charge too much, how do I go about changing this?
Hi Gemma,
welcome to the forum.
define too much?
Are there comlications associated with the VAT?
How easy is it for the accountant to get to the right information?
How timely is the client in providing it (chasing paperwork also needs to be paid for).
Whatever you do don't fall for the age old line from the clients that there affairs are really simple... They never are. I had one who swore that they just did a couple of hundred transactions through PayPal and didn't understand why they were being charged so much by their incumbant... Once I had checked it all out I had to inform them that I would charge more as it was a nightmare of foreign currency transactions, reversals, bounced payments, lack of understanding as to what the transactions actually represented, etc.
Always check the clients books, never believe what they tell you which is always the best possible version of how they would have liked things to look in a perfect world.
If you're not cynicle yet just give it a few weeks and you'll get there. lol.
all the best,
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.
Hi shaun
I've been completing VATs for over 11 years and I have seen everything so I know to be cynicle.
One client of mine (that I do through the accountants) doesn't open any post and dumps it all in a box from the supermarket and drops it off in the office. I then spend a whole day opening it all and of course it's charged to the client.
Yet some of my VAT clients are really good and everything is in some kind of order.
Hi again Gemma First of all I would check your contract of employment to see if it has a non compete/any restrictive covenants in it as it is very usual for Accountants to include such with their workers. You may find that you cannot set up in competition within x miles of the practice or some such, within x period of leaving or whilst still working for them. This may be ok based on where you live but you will need to carefully consider where your clients are based as any work you undertake that breaches that clause can end up in a legal case against you. Also - take great care if the potential clients are ones you deal with now as can be viewed as poaching and can be very costly.
You do not need to complete you AAT to be a bookkeeper BUT it would be a good idea if you do. Having the AAT will get you more work from Accountants as a subbie, unless of course you are contracted to work alongside those who know your work already (assuming you havent upset them as mentioned above) and who are happy to contract out to you because they rate you personally. Other reason is that most clients will be looking for a one stop shop in terms of bookkeeping rather than just the VAT to be done from debtor/creditor schedules. On that, with your plans, you will find the market as an external bookkeeper very restricted and making money from it very hard.
You do not need to be part of a prof body to practice, but you may consider it helpful for support and at least in the first year to keep your MLR costs down. Perhaps look at the IAB, although you may need to do some exams to become a member, but those should be easy enough with your background.
MLR is an absolute must! Legally you have to have it - either via a prof body or via HMRC. First year is more expensive as alluded to above, just because they take an admin fee in year one. Failure to have MLR in place can be punished by a massive fine or imprisonment (see the moderator's comments on today's payroll post!!)
Other thing to get is PII cover. Not illegal, this one, if you dont have it, but you would be bonkers not too - who wants to lose the roof over their family's head if sued by a client!
Oher biggie is the software - have you any thoughts about what you will choose? Iris will be well out of your league cost wise. Sage could well be, given the target market you have chosen. Have a look round the site for comments about software. There is a desktop camp v the cloudy folk. Care re cloudy on speed of input (usually rubbish with high volume), costs rising and lack of full data protection (read up on Safe Harbour!). An option that might help - VT. Not sexy looking, looks postively old fashioned but a great but of kit for hardly any dosh!
Pricing - a biggie if you are only choosing to act for ST and partnerships and NOT doing the full bookkeeping work. They may find they are paying more for their complete package between the two as the Accountant will need to recreate what you have done to complete the books, whereas if you offer full bookkeeping up to TB they will only need to overview and correct any errors/provide for any adjustments. Plus remember businesses such as restaurants have most of their VAT outside of debtor/creditor schedules. Remember also - you need to be earning a decent amount to move away from payrolled staff to self employed and please do not sell us bookkeepers short!!
To get information from Accountants to be able to do said work there is normally a process whereby client pays what is o/s with them, you get an engagement letter between you and new client, you write to existing Accountant called a professional clearance letter and asking for what you need, client authorises existing Accountant to respond and they then send everything (and will comment on the client if there is anything adverse that you should know).
Hope Ive covered everything to give you a bit of a start - the rest you can get from doing a bit of digging round the site as this question has been asked in several forms a million times, then perhaps come back with any additional info you might need. Care - re setting up you can go back as far as you like on the site, but for technical stuff I would keep it within the last finance act generally or it could be out of date.
HTH
edited re typo
-- Edited by Cheshire on Monday 17th of April 2017 05:37:42 PM
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
But back to my original questions please if possible as I would like to get anything sorted before I take on any personal clients
I may be mis-reading this, but it comes across as a wee bit cheeky/demanding, so I will assume it was said tongue in cheek.
I think it is only correct that the points raised by Shaun were raised and part of the reason we ask for background. Besides you did mention pricing - yours v Accountant. Please give us chance to then come back to all points. Bear in mind that we see a lot of people on here who consider that self employed is so much easier than it is - you will spend more hours working that you currently do if you go down the self employed route.
-- Edited by Cheshire on Monday 17th of April 2017 02:09:13 PM
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Cheshire thank you for your reply.
I'm on my phone so will have a good look in length in the laptop this evening. I can't see previous posts whilst writing my reply.
A woman I work with already does similar to me and does bookkeeping alongside her employed position. I would never dream of poaching clients and of course any work I bring to myself could potentially be new clients for the firm I work for.
I will look at engagement letters and membership costs and insurances and go from there.
Many thanks for your help
Apologies Cheshire as I said I am on my phone and can't preview my posts that well, I'm used to using Tapatalk for forums but will use the laptop for here.
I will look at all the points you've mentioned.
Thank you for helping me.
You will see our real names when you log in via other means (as well as what I meant earlier about your name under the signature bar). Im Joanne and Shamus is Shaun (our forum moderator). Think the apology is more for Shaun.
-- Edited by Cheshire on Monday 17th of April 2017 02:16:14 PM
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi shaun I've been completing VATs for over 11 years and I have seen everything so I know to be cynicle. One client of mine (that I do through the accountants) doesn't open any post and dumps it all in a box from the supermarket and drops it off in the office. I then spend a whole day opening it all and of course it's charged to the client. Yet some of my VAT clients are really good and everything is in some kind of order.
Hi Gemma,
I've been doing VAT returns for 27 and they still manage to surprise the hell out of me, lol.
you say that the accountant does their VAT and you want to change this? The accountant though will surely do all of the other processing as well including their end of year. Doing VAT returns divides the knowledge acquisition of the clients affairs up into four chunks rather than all at once so if you took the VAT thats unlikely to have any substantial effect upon what the accountant charges as they will still need to do the same work anyway. The client will just end up paying pretty much the same to the accountant plus your fee as well.
Always attempt to sell your services based on quality of personal service and helping to reduce errors in the books which "may" (never use the word will) reduce the fee's paid to the accountant.
In direct response to the question, you need an agent id with HMRC before you do anything. When you complete the 64-8 (can also be completed online) with the client you state the basic services you will require. get the 64-8 sorted out when your MLR is complete and at the same time as getting your engagement letter signed. Your registered services with HMRC can be altered once the client is in your agent area. You should then be able to file VAT returns on behalf of the client.
From a professional ettiquette side the accountant must be informed that you are doing this. They will not be permitted to talk to you until the client has given them permission to. Uncomfable as it may seem to your client they need to tell their accountant that they are bringing a bookkeeper on board. They will then find out if there will be any saving by you taking the VAT which may of course change the clients mind as to whether they want to use two professionals.
You don't say how big this client is? There is a definite size where they are not big enough for a full time on site bookkeeper but too big to not have their bookkeeping performed by a professional. Those one's are the holy grail for freelance bookkeepers.
Then there are those not big enough for an accountant where a bookkeeper is able to offer the full service. Those one's are our bread and butter.
Where does this client fit?
On the memberships question. No. But you do need to be registered for MLR (though HMRC if you do not have a professional body).And you should take out PII. That one's not a legal requirement but if you don't have it you could end up losing your house. In the absence of formal qualification, provided that you can prove QBE it should be available to you. Be wary of the small print though as you will only be covered for work in which you are qualified and/or experienced.
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.
A woman I work with already does similar to me and does bookkeeping alongside her employed position
I can see you have been back on Gemma. Any more thoughts? Including to Shaun's last comments?
Good points there Shaun and thanks for that, especially the 64-8 - knew I had forgotten something!!)
Does this woman do the full bookkeeping or just the data input from debtor/creditor schedules as you were suggesting you might do? Just wondered what her hourly charge out rate is if its the latter? Also things like - how many customers/what kind of volume of work and how she got such business? Would that rate allow you to give up work?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
A woman I work with already does similar to me and does bookkeeping alongside her employed position
I can see you have been back on Gemma. Any more thoughts? Including to Shaun's last comments?
Good points there Shaun and thanks for that, especially the 64-8 - knew I had forgotten something!!)
Does this woman do the full bookkeeping or just the data input from debtor/creditor schedules as you were suggesting you might do? Just wondered what her hourly charge out rate is if its the latter? Also things like - how many customers/what kind of volume of work and how she got such business? Would that rate allow you to give up work?
Hi,
sorry I didn't come back to this thread, I have been looking for threads to help me with the start up process rather than keep bombarding you all with questions.
Thank you Shaun for the pointer about 64-8 too. I will register as an agent this week too. I really do appreciate all your advice on this. It seems so daunting starting out on your own.
I do not know my colleague's charge out rate, she does full bookkeeping and management accounts. I do think I will do bookkeeping to TB after reading your responses.
Exciting times Gemma! Can imagine your to do list but you will surprised how quickly you can get most things done. Good luck and look forward to chatting more on here as you go.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
