chartered accountants or Non chartered

[andy*smartcleaning]

Hi All, really need some good advice!

Need to make saves to my business and at the moment I use a chartered accountant! Which is costing my business about 1.5k a year (Ltd Company 60k turn over)

Now I have heard non chartered accountants are a LOT cheaper, now my question is! Would it be wise to use a non chartered accountant for a Ltd company and what is the different between them!

Andy

 

[CassioAcc]

A Chartered Accountant would have had years of training and will also be bound by rules of their institute, this would include maintaining a record of continued professional development so they should always be up to date. That does not mean that a non chartered accountant does not maintain similar standards.

Have you looked around for another qualified accountant. Usually a smaller practice would not charge as much as a larger firm, but obviously this depends on the full suite of services you require.

 

[Jenni384]

A Chartered Accountant would have had years of training and will also be bound by rules of their institute, this would include maintaining a record of continued professional development so they should always be up to date. That does not mean that a non chartered accountant does not maintain similar standards.

Agreed, there are other non chartered bodies such as the AAT who still require their members to undertake CPD, hold professional indemnity insurance, and only allow them to qualify after both exams and experience.

I'm not sure so much whether its the chartered/non chartered that drives the price - often I think it's the size of practice and business model used. Eg many larger high street chartered firms charge by 6 minute intervals, with different charge out rates for the class off staff undertaking the work. Often accounts preparation will be done by a junior assistant, with the qualified accountant only signing off the work at the end.

Contrast that with a smaller practice like many of us on here who undertake all or most of the work ourselves, and charge fixed fees.

Then look at Elaine (CheapAccounting) who is a chartered accountant and it not expensive at all

The bottom line is to find someone you like, trust, and can work well with.

Good luck

 

[CassioAcc]

Jenni is correct - don't let the qualification be the focus.

 

[Basement_Studios_Ltd]

chartered accountants are very good....but you're paying for the knowledge you will probably never use. We run accounts/tax for similar sized companies that we paying the same and more, they now pay £150-£200+VAT a year....massive saving and I'm sure all sound agree they get a better service.

Thanks,

Rob.

p.s. good luck finding someone - remember you need to get on with this person, as they will be able to help you no-end, but you need to feel like you can talk to them! :

 

[profitxchange]

Have you actually discussed your accountant's charges? Have a chat before jumping ship - they may just be able to adjust their fees rather than loose you.

 

[andy*smartcleaning]

Thats great advice many thanks, are keep on looking for a local company to me, I have just emailed 5 accountants from the AAT I really aim looking to save over 1k a year on this side of the business and with savings made from the free banking from the co op (member of fed of small business) I should survive the economic down turn

Andy

 

[elaine@cheapaccounting]

I think businesses will start to review all costs over the next little while so it may be that your current accountant will be willing to review their fees given the current market. I should have thought that this would not be an uncommon occurence in the next little while

 

[David Griffiths]

One of the key things that will affect your fees is the quality of the books that you provide. If you keep good records, and in most cases this does not mean a pile of unlinked spreadsheets, which are reconciled to the bank account you can leave your accountant to concentrate on the accounting side, not the bookkeeping side.

I'd suggest that you discuss this with your existing accountant, and also make it a key point with any potential replacement that you speak to. The better your records, the better the quality of the information available to you to run your business - the annual accounts are pretty well useless for this!

As others have said, the costs look quite high to me (but not £1,000 too high!) so you might be dealing with a firm in the wrong area of the market. As somebody has pointed out, you may be paying for knowledge that you won't use, but an alternative firm with a different qualification may not have all of the knowledge that you do actually need.

 

[Gillie]

chartered accountants are very good....but you're paying for the knowledge you will probably never use. We run accounts/tax for similar sized companies that we paying the same and more, they now pay £150-£200+VAT a year....massive saving and I'm sure all sound agree they get a better service.

Thanks,

Rob.

p.s. good luck finding someone - remember you need to get on with this person, as they will be able to help you no-end, but you need to feel like you can talk to them! :

Slight generalisation there Rob .... you pay an Accountant for his knowledge in that he can help/get you out of the problem. For instance mine is FCA and more but I am not paying for the qualification, just the service!

 

[yorkshirejames]

Agreed, there are other non chartered bodies such as the AAT who still require their members to undertake CPD, hold professional indemnity insurance, and only allow them to qualify after both exams and experience.

Maybe I'm being harsh, but I think of AAT as the qualification that someone who hasn't been to university does prior to CIMA/ACCA. At a headline level, I would be wary of an AAT person offering their services as an accountant. A bookkeeper yes, but surely not an accountant.

I would suggest you either look for someone who is a member of one of the chartered institutes: ICAEW (or Scottish/Irish), ACCA or CIMA. If CIMA, ensure they have the small company experience (and practising certificate) needed to effectively help you, and I would respectfully suggest avoiding anyone chartered with a country outside the British isles (for the same reason).

HOWEVER I would be happy to use someone non-qualified, or technician, etc IF I was comfortable with their experience and skills. That is perhaps hard for a non-accountant to gauge.

 

[elaine@cheapaccounting]

I think that is a little harsh on AAT - it is a perfectly acceptable accounting qualifications for those who wish to practice.

As with everything the golden rule (whether qualified, not qualified AAT, ACCA, ACA etc) is to do what you are capable of. The hard trick is finding a person who opeartes within these boundaries

 

[KidsBeeHappy]

I think it's a case of knowing what you need.

Is it just straight forward preparation of accounts and returns for a ltd company turning over a small profit.

Or is the company looking at growing, are your profits growing, and you need to be thinking about tax planning and profit extraction a bit better? Do you operate in an industry which is subject to additional legislation, or particular rules or schemes? Do you just have a few basic employees, or are you operating share option schemes or other employee benefits. Are you looking to refinance? Do you have outside shareholders? Are there significant tax losses, brought forward, or likely, that you need to think about.

If the answers to questions like this are all a resounding No, then an unqualified accountant should be fine, but make sure that they are part of a professional network to ensure that they are having regular training and keeping up to date of all legislative changes.

If the answers are yes, then a Chartered/Certified accountant is probably the way to go.

I don't think anyone can make blanket statements about is best for you without knowing what kind of complexities are involved.

Hope this helps.

 

[Jenni384]

Maybe I'm being harsh, but I think of AAT as the qualification that someone who hasn't been to university does prior to CIMA/ACCA. At a headline level, I would be wary of an AAT person offering their services as an accountant. A bookkeeper yes, but surely not an accountant.

Just to clarify I am an AAT member in practice (and went to uni before that), and I would hope my contributions to UKBF demonstrate that MAATs are perfectly capable accountants. Plenty of MAATs are bookkeepers, plenty use it as a stepping stone to chartered, but plenty of us are accountants in practice. By the time you have a few years under your belt and maintain CPD, I don't see the problem. Try telling the FMAAT who's run their own practice for 20 years they aren't (or shouldn't be) an accountant!

Thank you Elaine for your support

 

[KidsBeeHappy]

In response to Jennie;

I can also say that i have come across Chartered Accountants, usually gentlemen, working from home, or on their own from a small office, approaching retirement age, who don't have a full practising certificate, and therefore don't keep as up to date as maybe they should, and who just do "a bit to keep their finger in". Some of the most ill-advised advice can come from such sources.

 

[elaine@cheapaccounting]

Thank you Elaine for your support

No problem - I knew you would respond anyway but I thought I would add my views.

To be quote honest though I think the quality of your posts speak for themselves

 

[Jenni384]

No problem - I knew you would respond anyway but I thought I would add my views.

To be quote honest though I think the quality of your posts speak for themselves

Cheers me dear

 

[Jenni384]

In response to Jennie;

I can also say that i have come across Chartered Accountants, usually gentlemen, working from home, or on their own from a small office, approaching retirement age, who don't have a full practising certificate, and therefore don't keep as up to date as maybe they should, and who just do "a bit to keep their finger in". Some of the most ill-advised advice can come from such sources.

Thanks Sandra.
As has been said many many many times on the qualified vs unqualified debate, you can get great unqualifieds and rubbish qualifieds, and vice versa.
It all boils down to the calibre of the person, and not the association of which they are a member, or not, as the case may be

 

[elaine@cheapaccounting]

Thanks Sandra.
As has been said many many many times on the qualified vs unqualified debate, you can get great unqualifieds and rubbish qualifieds, and vice versa.
It all boils down to the calibre of the person, and not the association of which they are a member, or not, as the case may be

Can we fight about which association is best though

 

[Jenni384]

Can we fight about which association is best though

NO!!!

 

[elaine@cheapaccounting]

NO!!!

Such a spoil sport

 

[Jenni384]

Such a spoil sport

Most likely! Feel free to go ahead though, if you really want to

 

[elaine@cheapaccounting]

Most likely! Feel free to go ahead though, if you really want to

Far too much of a wimp :redface:

 

[yorkshirejames]

okay I've really put my foot in it now. My apologies if any offence was caused. However, I genuinely did not believe that then intention of the AAT qualification was to enable someone to function as an accountant in their own right.

I know very little about the course, so will simply shut up before I dig deeper.

Jenny, I thought/assumed you were chartered - so that in itself speaks volumes.

 

[Jenni384]

okay I've really put my foot in it now. My apologies if any offence was caused. However, I genuinely did not believe that then intention of the AAT qualification was to enable someone to function as an accountant in their own right.

I know very little about the course, so will simply shut up before I dig deeper.

Jenny, I thought/assumed you were chartered - so that in itself speaks volumes.

Thank you James
No hard feelings at all, I don't think the AAT push our status hard enough so I'm not surprised those who don't know enough assume we're 'just technicians' (I can't stand that word!). I know the chartered courses must be more in depth than the AAT, but it's definitely enough (plus experience and proper CPD) for general practice if that's the way you want to go.

 

[elaine@cheapaccounting]

Thank you James
No hard feelings at all, I don't think the AAT push our status hard enough so I'm not surprised those who don't know enough assume we're 'just technicians' (I can't stand that word!). I know the chartered courses must be more in depth than the AAT, but it's definitely enough (plus experience and proper CPD) for general practice if that's the way you want to go.

totally agree - on the chartered course I studied things like CAPM plus other stuff which of course I have well forgotten and never use now anyway.

I also seem to remember spending a lot of time playing cards in between lectures and exams

 

[Vicky.Rogers]

Hi Andy

I agree with many of the replies about the qualification not necessarily meaning a high fee. There are many small firms or individuals out there who are just as qualified but are much cheaper as they don't have the overheads of a larger practice.

There are benefits in using a qualified accountant. For instance, bank and building society references seem to want the qualification.

For what it's worth, my personal experience as a qualified accountant working in a midium size practice meant that those of us who had qualified were given the more challenging and educational work. Those staff members who trained up to AAT level or were considered 'QBE - qualified by experience' were not sufficiently trained to advise clients on all aspects of general practice.

After 17 years I decided to set up on my own as it fits in with my work/life balance with two young daughters. I think if you ask around your area, you will find similar accountants as myself who are qualified and experienced and won't charge you the earth.

Good luck in your search.

Vicky

 

[Wild Goose]

Of course, a chartered accountant would do nicely. But I think you may be doing AAT qualifieds a disservice by lumping them in with QBE's, Vicky. The AAT exams are quite rigorous and wide-ranging. I believe most leading banks and building societies are happy to accept references from their members in practice.

My personal experience of AAT was that it allowed me to spend the bulk of ACCA levels 1 and 2 on auto-pilot due to the huge overlap in subject matter. Sure, there were some heavier areas in ACCA (for me, auditing, consolidated accounts, foreign taxation) but the reverse was also true, where AAT ran deeper (in my particular case, business law, IT, and economics).

You can see the extent of that overlap, and gauge for yourself the depth and breadth of AAT study, by virtue of Elaine's assumption that Jenni is a chartered accountant. QBEs, by contrast, are pot luck for any business taking one on because, as I expect you know, any old Gary Glitter can call himself an accountant.

 

[Jenni384]

Thanks Wild Goose

I think in some ways Vicky may be right, in the sense that I would guess an AAT used as mid-level staff in a chartered practice might not get to do the stuff the top-end accountants in the practice do, and therefore would not get the experience in that job to be able to advise on all areas of general practice. However, it all depends what the MAAT wants to do with the qualification as it is very versatile.

Having never worked in a chartered practice (I trained with an experienced sole practitioner MAAT) this is only my impression.

However yes, Wild Goose, banks and mortgage lenders do rightly recognise the qualification. It's also very interesting to hear how AAT compares with ACCA, and indeed that in some areas it is more in depth.

It surprises me how many non-accountants don't realise that anyone can call themselves an accountant. Many people assume anyone calling themselves an accountant is qualified.

 

[Wild Goose]

Hello Jenny,

Well my experience of two medium sized independents was that generally the challenging work was issued to the chartereds, who would then re-issue it to the trainees and part qualled. Delegation!

I'm not so sure about the other matter of advising clients either - plenty of part-qualled among our number were let directly loose on clients. Conversely, one or two of the qualifieds were not trusted to be alone with a client unsupervised (one nervous guy would turn into Gareth Gates if left unchaperoned).

Before I have the ACCA on my case, I should add that the deeper rivers that just happened to be law, economics, and IT were so far as I could tell due not only to the syllabus as to especially keen lecturers at my AAT establishment, versus not so bothered at my ACCA seat of learning. I guess that would vary according to time and venue - but yes, I picked up far more law and economics at AAT.

I know about the anyone can call themselves an accountant thing. I saw a nice old comedy on channel 10 in which a guy was telling the girl he was chatting up that he was an accountant. "Chartered or Certified?" she asked. "Turf" he replied.

 

[Mark Lee]

The key factors are:
a) What services do YOU require? Different people need different services and each accountant, qualified or not, will have different areas of specialisation - which leads to second key factor:
b) What level of experience does the accountant have of providing the services that YOU want to other people LIKE YOU? For example, providing VAT completion services to much bigger or, indeed, much smaller clients can require different degrees of experience; and
c) What services does the accountant know, from their experience of dealing with OTHER clients LIKE YOU, that you will require - over and above those that you think you want. And can they help you to appreciate this without seeming to be a pushy salesman?

You're welcome to download my free ebook on Finding and Choosing accountants and tax advisers. There's a link to it on the home page of the Tax Advice Network website.

 

[Hotboxbert]

I have a colleague who works for an Indian based, UK qualified, chartered accountant and scans books for other UK accountants at that accountants customers premises, sends them to India on a CD, all the work is done there, then they come back to a UK based acountants who then sign them off for their clients. The clients have no idea where the work is done. As the work is done in India by staff that probably only cost 50p an hour the saving doesn't show in the quality of the books. The cost to the UK accountancy firm is about 40% of what they have to pay the guy in India. I can get more info' if you want, let me know!
Bert

 

[David Griffiths]

Lots of accountants outsource work like that, including us. I was originally against the concept because I thought that it meant exporting jobs, but experience shows that firms who use this actually create jobs.

Some differences from the example given, in that ALL of our clients know where the work is done, and if any objected we wouldn't send it. Sending CDs is a bit low tech as well - all of our work goes up secure file transfer links (not by email) and our partners have security that is every bit as good as ours.

I do it because it is difficult to find trained staff at the right level and to have enough work to stop them being bored and moving on. It enables us to meet our turnround targets. If anybody thinks this work is done in sweat shops, they are well off target - it's done in modern, well equipped offices and the systems and controls are second to none. I thought that we were well organized, but their systems are far, far superior.

It also costs lots more than 50p per hour. I've seen people on here charging less, but that's not the point. The work is done well, promptly and releases us to do higher level work which is more interesting and more profitable.

 

[Vicky.Rogers]

Sorry Jenni, if you think I do AAT a disservice - honestly not intended. It sounds like you were lucky to get good training in a small practice. A lot of chartered practices are very hierarchical with a bit of snob value thrown in. You made a good choice. It's amazing what different experience accountants get depending on where they train. Indeed, I agree with Wild Goose that the qualification won't necessarily get you the experience or exposure to clients.

It's got a lot more to do with personality, because lets face it, anyone with average intelligence who can apply themselves, can pass the exams but not anyone can deal with clients effectively. Certainly there were qualifieds where I worked that were not necessarily good accountants.

It's good to hear that banks etc are accepting references from AAT (and presumably ATT) as I haven't had this yet. I have a friend who wants to set up on her own who is ATT so I'll definitely pass this along.

As for the old calling yourself an 'Accountant' - I totally agree with your comments. I have had so many clients that I have had to sort out because they used someone calling themselves an accountant with no qualification and quite clearly barely able to do the bookkeeping let alone anything else. I know that the accounting bodies are lobbying against this so maybe one day.....

 

[Jenni384]

Sorry Jenni, if you think I do AAT a disservice - honestly not intended.

Wasn't me that said it actually But no it's fine

A lot of chartered practices are very hierarchical with a bit of snob value thrown in.

Another reason I am happy to work for myself and am not fussed about taking a chartered qualification, I wouldn't like to work somewhere like that!

It's got a lot more to do with personality, because lets face it, anyone with average intelligence who can apply themselves, can pass the exams but not anyone can deal with clients effectively. Certainly there were qualifieds where I worked that were not necessarily good accountants.

Absolutely!

It's good to hear that banks etc are accepting references from AAT (and presumably ATT)

I'm not sure about ATT. I don't know of many people who are ATT without having got an accountancy qualification first. I'd be interested to know.

 

[Hotboxbert]

You're right David, my info' is out of date, data is transferred by secure file transfer. It seems they also have fairly heavy duty contracts which prohibit using the information in clients accounts for their own purposes.

 

[andy*smartcleaning]

WOW big response!

Many thanks for your replies

I have sent out emails to lots of accountants local to me and waiting on replies this is what I have sent!

.....................................


Dear
I am the managing director of an Ltd window cleaning company (Smart Cleaning Ltd) our turnover is about 70k per year and I would like to take this opportunity to ask for your accounting company for a quotation of your professional services, are requirements are...
Profit & loss accounts
Tax Returns (submit to H.M Inspector of taxes)
Abbreviated Accounts, Annual return & minutes of AGM (submit to companies' house)
PAYE annual return, and payslips (two employees)
Vat annual return (calculate and submit)
We provide bank statements, cheque books, paying in books, receipts in a monthly envelope, all purchase's are on one statement, as we use a bank card and the same with fuel (fuel card) and invoices are provided in a binder folder (35 invoices a month) we then give a turn over figure, and the accounts get started and if there is any questions about the accounts, we return very quickly! The accounts get done in one go at the end of each year, to coincide with annual VAT return, but happy to shorten this! I hope this helps with providing a quotation by email
I would be looking for a competitive quotation, as I feel our accounting fees are to high!
Andrew Cheney
MD of Smart Cleaning Ltd

 

[andy*smartcleaning]

Just had a email and the account company is a lot more and he says...However it should be remembered that budget accounts are inevitably produced by cutting corners. Time is not spent time looking at ways to reduce your Corporation Tax bill!

 

[Wild Goose]

Hi Andy,

To be truthful, if you are paying £1,500 at the moment for all that then that's not a bad deal. Reason: you're asking for the bookkeeping, PAYE and VAT return thrown in - that has a value which I'm going to guess at least £500 based simply on the going rate for bookkeepers being £20 per hr.

You don't say how many tax returns you want - you'll have to clarify that. The company needs one annually, as will each director. Going rate anything around £100 apiece. To give you an idea with accounts alone, I have a pdf of one of the discount web internet accountants out in the provinces - cheap and cheerful prices - and to give you some idea they charge for £50k to £100k turnover £595 if your books are complete, balanced, on Sage or any other similar package; £725 to £895 for a manual or Excel set of books; and £1,145 for a box of records with no books. Yours fall into the latter category, Andy. See the difference? Up to double the price if you don't supply balanced books. (btw all prices are net of VAT).

On the plus side, saying you're responsive has a value - accountants don't like unresponsive clients because they create artificial jams in their workflows.

But Andy, amongst your list you have made no mention of dividend paperwork - don't tell me you've nailed your accountant to the cross so badly that there's nothing left in the tank for arranging low salary and dividends, which could save you personally many thousands a year in income tax? I'll rattle on in a separate post about that one.

 

[Jenni384]

Andy what Wild Goose says about the bookkeeping is true - it's good bookkeeping that keeps the year end accountant's bill lower. Have you thought about a cheap/free software package (run a search on here, so many discussions on them!)