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How much practical experience do I need to do small business accounts?

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matt101

I am studying AAT level 2. I am looking to get a paid job, whilst studying levels 3 & 4. After a year, or so of experience in an accounting practice, I want to start working for myself. I will look for someone with experience, who I can go to for advice, in return for being paid. Is this practical?
 
I don't think the AAT equips you to be let loose on paying clients without first obtaining a good few years of experience.

I would focus your energy on securing employment that will give you this experience.
 
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When you start working for somebody with no practical experience beforehand I'd be surprised if they let you anywhere near a tax return within the first year or even two. Providing a service for small businesses is about dealing with the tax as well as accounts
 
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matt101 said:
I am studying AAT level 2. I am looking to get a paid job, whilst studying levels 3 & 4. After a year, or so of experience in an accounting practice, I want to start working for myself. I will look for someone with experience, who I can go to for advice, in return for being paid. Is this practical?
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Have you considered further studies after the AAT eg ACCA?
 
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MyAccountantOnline said:
Have you considered further studies after the AAT eg ACCA?
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Hi Nicola, I don't really see how studying ACCA (or any of the other chartered qualifications) would benefit me? As far as I understand, these are for larger companies, & I want to do accounts for small businesses.
 
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Scalloway said:
Chartered (in the wide sense) accountants do accounts for all sizes of businesses.
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Hi Scalloway. 90% of businesses are small, so most accountants don't need to be chartered? I hope you don't mind, but I just googled your company's name, & I see that you are MAAT. How much experience do you think I need before I can work for myself? (if you don't mind me asking). I am a self taught web developer, so am highly motivated. Is it possible to study the AAT qualification, & then get a year of experience with an accountancy company, then work for myself? Thanks for your time, it is very much appreciated :)
 
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David already mentioned the experience you will need.

I would say three years as an absolute minimum.

I have worked in practice and industry roles (mostly industry) for 10 years. I still feel like I'm still learning and don't have the experience to take the plunge in to self employment!
 
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... and I've got 40 years and still learning :eek: Mind you doesn't help that they keep changing the rules :rolleyes:
 
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john1989 said:
David already mentioned the experience you will need.

I would say three years as an absolute minimum.

I have worked in practice and industry roles (mostly industry) for 10 years. I still feel like I'm still learning and don't have the experience to take the plunge in to self employment!
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Thanks John, I was just looking for a few more opinions :)
 
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Bob said:
... and I've got 40 years and still learning :eek: Mind you doesn't help that they keep changing the rules :rolleyes:
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You should try being a coder then.You have to learn new coding languages/ frameworks every year. Within a 5 year period EVERYTHING has changed.
 
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matt101 said:
You should try being a coder then.You have to learn new coding languages/ frameworks every year. Within a 5 year period EVERYTHING has changed.
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Just remember that 40 years ago coders were just a gleam in their mother's eyes :)
 
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matt101 said:
Hi Scalloway. 90% of businesses are small, so most accountants don't need to be chartered? I hope you don't mind, but I just googled your company's name, & I see that you are MAAT. How much experience do you think I need before I can work for myself? (if you don't mind me asking). I am a self taught web developer, so am highly motivated. Is it possible to study the AAT qualification, & then get a year of experience with an accountancy company, then work for myself? Thanks for your time, it is very much appreciated :)
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To give you a summary of my experience

3 years at college passing exams that allowed me to me to become an MAAT.
3 years working for chartered accountants doing accounts for sole traders and partnerships.
After 15 years working as a financial accountant (and qualifying with CIPFA) with a local authority I started doing sole trader accounts as a sideline. My role at work ended up being administering a large loan scheme that invested in small local businesses so I always had a handle on that sector.

My clients had very simple businesses. However that did not stop one having an investigation due to my mistaken handling of a balance sheet item. The client was completely clean but it gave me pause for thought.

I have always stuck to taking on very simple businesses and small charities. The amount of knowledge you need to keep up with doesn't make it worth my while to take on anything more complicated, such as limited companies. So even after 40 years in the game I stick to what I know.
 
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i am not an accountant but i do my very own book keeping using freeagent which is a no brainer really. but the y/e stuff i pay an accountant to do for me. The trouble is as a junior MAAT you're not going to have breadth of knowledge that a client is going to expect you to have. So much of accounting is about informing your clienting about things they they don't dont know that they didn't know. Even for my small straight forward business I didn't know a lot of stuff and I asked on this forum and another bookkeepers forum to help get the knowledge I needed. It's really slow going but it's my own time and my own business so I can work through this very slowly.

If you're doing this for a client and inexperienced it's going to transpire very easily and you'll potentially end up costing your client a lot in avoidable taxes or worse. they may have an urgency with an issue and if you cant provide an answer for them off the top of your head they're not going to be impressed.
 
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matt101 said:
Hi Nicola, I don't really see how studying ACCA (or any of the other chartered qualifications) would benefit me? As far as I understand, these are for larger companies, & I want to do accounts for small businesses.
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The reason I asked is that a lot of students in your position are keen to work for themselves ASAP (I was too MANY years ago) but you need to bear in mind you cant prepare business accounts for someone on a self employed basis as an ACCA student.

Whether/how much a Chartered qualification will be of benefit to you depends on many factors. Despite resenting paying my annual sub now I'm certainly still very glad I did AAT, ATT and then ACCA - it gave me a lot of choices in my career which I wouldn't have had otherwise.
 
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matt101 said:
No I was looking for opinions. I would suggest that after 10 years experience, if you don't feel able to become self employed, you never will.
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Plenty of time in my life for that. Not many people start an accountancy practice in their mid twenties.
I wouldn't consider 10 years experience to be a lot in this profession either.
 
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matt101 said:
I suggest you read John's earlier post to me, before criticising. He suggested that I am not looking for opinions, but for just someone to agree with me, which was rather rude :)
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You had a minimum of three comments saying that you should obtain experience. You asked for more opinions. I thought my comment was fair, not rude.
 
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matt101 said:
No I was looking for opinions. I would suggest that after 10 years experience, if you don't feel able to become self employed, you never will.
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Starting your own accountancy firm becomes as much about running a business as it is about accountancy. It requires sales & management skill as well as your core accountancy skill. Not everyone has the desire to do that anything apart from pure accountancy. Not everyone wants to juggle all of that, I think a lot of accountants are happy working for a larger firm which provides them with a consistent stream of work for big accounts which requires a team of specialists to work on.

I have a friend whose part qualified ACCA and does corporate accounts (inhouse). He doesn't want to do any small business accounts let alone set up a small practice.
 
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matt101 said:
No I was looking for opinions. I would suggest that after 10 years experience, if you don't feel able to become self employed, you never will.
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I did three years at a big 4 firm and qualified there before I left to start my business. So I got to meet a wide variety of people, both colleagues and clients. What I would say is that the vast majority of my colleagues/superiors/even people below me were probably very able at running their own business and doing very well. Not everyone wants to run a business and there are some great jobs out there that keep people well paid and happy. I've met people who are absolute superstars at their jobs and can only imagine they would be excellent at running a business but they have great careers so why change when you're already happy?

Another point is that I believe the more experience you have before you start your business (any business) the better. This is even more true for an accounting firm because you are selling yourself as an expert on a pretty complicated subject that is continually changing. As well as being an excellent accountant, you will need to be excellent at all round business (winning clients, communicating with them etc). Sometimes I wonder how small accountancy firms even find the time to win clients. All of these skills take time to learn.

So to answer your question, I would agree with the others - get as much experience as you can. Don't feel rushed, it takes time to go through the process and learn. How long should you work before you go on your own? Impossible to say I'm afraid but definitely longer than 1 year in my opinion. If you look at it from a client perspective...if I am recruiting an accountancy firm for my company right now, I don't think I would hire anyone who has only had 3/4 years work experience. I'd be looking for 10 years + with a good track record.

Not saying you HAVE to have 10 years experience to start your own firm but the competition will be fierce and someone with 10 years experience will be more attractive to a client than someone with 3 years experience
 
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I did 6 years of book keeping, then qualified with a firm, then left to work for one of their clients and took a few homers with me
then I temped for a while and built up my homers list, entirely by recommendation, I've never advertised.
17 years ago I was handed a particular niche on a plate
and its been my rut ever since

If a client has a business that is outside my comfort zone, I let them go to somebody else

and I've still got shed loads to learn
 
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