New Accountancy Firm Help

[Gogler]

Hi everyone,

I'm looking for help / advice. I've been running my own marketing business for 2 years and now want to invest in a new venture.

I want to open an accountancy practise for small businesses and the self employed. I have no experience whatsoever in accounting and wondered if I'm still allowed to start a practise? I will employ accountants to do the number crunching and I will tout for business. This is similar to the tax assist franchise model - however, I want to start on my own and invest money into the company rather than a franchise scheme.

I'd appreciate any help on a) if it's legal for me to do this, b) do I need to register with any accounting bodies before trading c) has this been done before?

Only looking for advice on the accounting side, not new business start up advice.

Look forward to reading your replies.

 

[teddys]

I'm not aware of any law that prevents you from setting up an accountancy practice given that the term 'accountant' is not protected. Your idea, basically the 'tesco law' equivalent of the accountancy practice, looks interesting. The only downside is that you will be dependant on the hire accountants for the technical quality of the services that the firm offers.

 

[InPrintImaging]

Let me ask the question, how exactly are you going to sell benefits to clients if you don't know anything about tax law, company law, UK GAAP, IFRS, Corporate finance.............

The vital point is you don't know anything about these subjects, so how can you sell benefits (which an accountant should know about) if you don't know what they are?

Do you know anything about how the accounting industry works? Do you understand the cost structure?

 

[Gogler]

Let me ask the question, how exactly are you going to sell benefits to clients if you don't know anything about tax law, company law, UK GAAP, IFRS, Corporate finance.............

The vital point is you don't know anything about these subjects, so how can you sell benefits (which an accountant should know about) if you don't know what they are?

Do you know anything about how the accounting industry works? Do you understand the cost structure?

No I don't, but a receptionist at any accountancy firm doesn't either - its the accountants who have this knowledge, hence the reason I will be employing them to carry out this work.

All I'll be doing is approaching new clients, getting them booked in and the accountants will do the rest.

 

[InPrintImaging]

Look at this from the point of view of the accountant.

From the point of view of an existing practice, essentially you are a salesman, and one with no experience in finance. Why would they want to give you a share of their profits? They do much of their sales already as the primary strength of their businesses is their/their firm's personal reputation, and if they do need addittional help, tehy can either hire a contractor, or if they are large enough, put a member of staff on the payroll.

From the point of view of the employed accountants/trainees who typically source their jobs through recruitment agencies, why would they want to go for a job like this? The fully qualified will take the same view as a practice owner would (above), and the trainees won't touch you because you won't be able to sign off on their training records/CPD. That is critical, because trainees (who cost less per hour) are used to keep jobs within budget. Managers (who cost more per hour) then review the jobs and do the more complex work at the end.


The other issue here is legal liability, and this is perhapse critical. When an set of accounts are signed off, the partner who signs them takes legal responsibility if they are subsequently proved to be negligently produced. Junior members of staff ie employees are protected by their terms of employment and the practice's PI insurance. What you are trying to arrange is that you own the practice, but your employees are personally liable if something goes wrong. I don't know anyone who would be willing to sign up to those terms, and I very much doubt that any recruitment consultants would want to do business with you either due to the risk of legal ramifications.


I've seen things like this come and go.

 

[Big Pete]

I have no experience whatsoever in accounting

Your halfway there then mind you just get sage software and its all push buttons anyways .. so you should be ok , and accountants just stick a disclaimer at the end anyways, saying on info given supplied etc etc so a win win ..

 

[Gogler]

Look at this from the point of view of the accountant.


I've seen things like this come and go.

So what about TaxAssist accountants? Plenty of accountants work for them without having / wanting their own practise.

 

[Gogler]

Your halfway there then mind you just get sage software and its all push buttons anyways .. so you should be ok , and accountants just stick a disclaimer at the end anyways, saying on info given supplied etc etc so a win win ..

I'm glad someone on here has some positive encouragement, cheers mate!

 

[elaine@cheapaccounting]

You are right - anyone can call themselves an accountant and set up an accountancy practice.

Of course the key to success is marketing, knowing what you are selling, how much to charge etc etc.

Good luck

 

[MyAccountantOnline]

No I don't, but a receptionist at any accountancy firm doesn't either - its the accountants who have this knowledge, hence the reason I will be employing them to carry out this work.

All I'll be doing is approaching new clients, getting them booked in and the accountants will do the rest.

How would you answer clients questions?

When you meet with a new client they will nearly always ask some technical questions.

How will you compete with qualified professionals who can?

Freely admit I'm bias but just cant see how you can sell a service you dont know anything about?

 

[elaine@cheapaccounting]

How would you answer clients questions?

When you meet with a new client they will nearly always ask some technical questions.

How will you compete with qualified professionals who can?

The OP wouldn't be doing these things - the employed accountants would be.

This is the model that Tax Assist work to from what I understand.

Of course for day one the salary of the owner has to be covered by the profits from the work of the accountants - so building significant client numbers fast is the key but a robust business plan will show that.

 

[MyAccountantOnline]

The OP wouldn't be doing these things - the employed accountants would be.

This is the model that Tax Assist work to from what I understand.

Of course for day one the salary of the owner has to be covered by the profits from the work of the accountants - so building significant client numbers fast is the key but a robust business plan will show that.

Ahh right - I assumed the OP would have an initial meeting with the potential new client.

All I can say is ''good luck''

 

[elaine@cheapaccounting]

Ah well - you know what assume does.

I am sure that the OPs business plan sets out how the business will operate, who does what etc.

This model is of course higher risk as the overheads cannot be built up gradually - so much more pull on cash from day one but then I guess the OP knows that.

 

[David Griffiths]

You don't have to register with any professional bodies. However you do have to register with HMRC in connection with the Money Laundering Regulations

 

[MyAccountantOnline]

Your halfway there then mind you just get sage software and its all push buttons anyways .. so you should be ok , and accountants just stick a disclaimer at the end anyways, saying on info given supplied etc etc so a win win ..

I wish

And no I dont use Sage

 

[MyAccountantOnline]

You don't have to register with any professional bodies. However you do have to register with HMRC in connection with the Money Laundering Regulations

Gogler you may wish to look into getting some training to enable you to ensure you comply with your Money Laundering obligations - lots of accountancy tuition providers offer ML support/training.

 

[Strontium Dog]

A lower risk way of approaching this might be to partner with an accountant who is good at the technical stuff but crap at marketing.

That way the risk is spread, otherwise you are going to have a big overhead to cover from day one.

How much money have you set aside to get this off the ground. £50K - £100K should do it.

 

[elaine@cheapaccounting]

I would say the amount needed for set up depends on area of country, market being targeted, client acquisition strategy, accountant recruitment etc. £50k will not go very far! - office costs, systems, salaries etc etc

 

[Strontium Dog]

I would say the amount needed for set up depends on area of country, market being targeted, client acquisition strategy, accountant recruitment etc. £50k will not go very far! - office costs, systems, salaries etc etc

I stand by my original guesstimate

One of the problems with the practice of accountancy as a business is that the barriers to entry have always been pretty low.

Try setting up a dental surgery, for example, on the fly with a few quid in your back pocket , an old computer, and a £75 "licence" from HMRC.

 

[elaine@cheapaccounting]

Yes many try to set up an Accountancy Practice and many fail because they know nothing about it or how the business model works

 

[MyAccountantOnline]

I would say the amount needed for set up depends on area of country, market being targeted, client acquisition strategy, accountant recruitment etc. £50k will not go very far! - office costs, systems, salaries etc etc

I agree entirely £50k wont go far with the type of set up Gogler is considering.

 

[TaxAssist]

So what about TaxAssist accountants? Plenty of accountants work for them without having / wanting their own practise.

This is because we are established and have extensive training and CPD facilities in place. Most people who join our network as a franchisee are qualified accountants and those that are not come from a strong financial background.

Each Practice owner has to take the free initial meetings but where we have up and coming accountants who want to run the practice then they are trained to take the meetings with clients also.

There are many accountants out there who want to run a practice as they don't currently have the financial backing to do it themselves and some of these staff members end up buying shares in the practice and become partners.

 

[elaine@cheapaccounting]

Each Practice owner has to take the free initial meetings .

May I ask why that is the case?

Surely if they have accountants in their team, one of them would be just as or more than qualified to do the meeting?

 

[TaxAssist]

Well the employed accountants are great at answering technical questions but have been employed from the outset to produce accounts and tax returns. The practice owner is trained to sign clients up in the free initial meeting.

It's difficult to generalise because we have over 200 offices and there are differences across the board.

I don't think it's realistic to go it alone without being a qualified accountant (unless QBE of course). It's tough enough going it alone as a qualified accountant let alone without any background in accountancy.

 

[elaine@cheapaccounting]

I don't think it's realistic to go it alone without being a qualified accountant (unless QBE of course). It's tough enough going it alone as a qualified accountant let alone without any background in accountancy.

I would agree but then I am a qualified accountant. However it does seem funny you saying that

 

[BookMarkLee]

Sounds like a thoroughly UNresearched plan. I suggest checking out the books and articles on starting up in practice as an accountant.

There is so much MORE to it than getting meetings and completing accounts and tax returns.

AccountingWeb have a whole section devoted to Starting in Practice. It's clearly a popular part of the site - with good reason. The purpose is to help people avoid all making the same mistakes and to learn from experience.

Good luck!

 

[MyAccountantOnline]

I don't think it's realistic to go it alone without being a qualified accountant (unless QBE of course). It's tough enough going it alone as a qualified accountant let alone without any background in accountancy.

I agree entirely.

 

[Maslins]

Why don't you go down the route of getting leads for existing accountants instead? That way you do what you're good at, the marketing, get the person interested then sell the "hot lead" to someone who can answer the technical questions and deal with the formalities.

PS you wouldn't be the first person to do the above, but it seems much lower risk and easier/cheaper to do.

 

[TaxAssist]

I would agree but then I am a qualified accountant. However it does seem funny you saying that

Why does it seem funny to you? Our accountants don't go it alone, they have training, support, audit and back up. The beauty of a franchise. I assumed you of all people would know that!

 

[elaine@cheapaccounting]

Why does it seem funny to you? Our accountants don't go it alone, they have training, support, audit and back up. The beauty of a franchise. I assumed you of all people would know that!

I was laughing at the bit where you said "I don't think it's realistic to go it alone without being a qualified accountant" - which is why we (CheapAccounting.co.uk) only take on qualified accountants

 

[TaxAssist]

I was laughing at the bit where you said "I don't think it's realistic to go it alone without being a qualified accountant" - which is why we (CheapAccounting.co.uk) only take on qualified accountants

So what do you have against QBE's then?

 

[elaine@cheapaccounting]

So what do you have against QBE's then?

Not being regulated by a professional body and exactly what does QBE mean?

Whilst it is no guarantee add into the mix our own QA processes and application process then I think we have as many bases covered as we can for ensuring the best of service to a client and, at the end of the day, that is what is important

 

[TaxAssist]

QBE = Qualfied By Experience

I can't talk for those outside of TaxAssist (because I've never met them!) but a QBE with support, CPD etc that we provide is perfectly capable of delivering the best service to the client. Not only that, our accountants support one another with advice and experience so there's nothing we cannot help the client with. Our target market is clients with a turnover of less than £2m for clarity.

 

[elaine@cheapaccounting]

LOL so funny - when I said what does QBE I meant ...

Just how do you get the E in QBE?
http://www.cheapaccounting.co.uk/blog/index.php/just-how-do-you-get-the-e-in-qbe/

 

[TaxAssist]

LOL so funny - when I said what does QBE I meant ...

Just how do you get the E in QBE?
http://www.cheapaccounting.co.uk/blog/index.php/just-how-do-you-get-the-e-in-qbe/

Well it wasn't clear was it! LOL

The question of how you get the E in QBE is not really answered. Shouldn't the title of your blog post be "I've decided to only take on only qualified accountants. What do you think about my decision?"

Accountants who are experienced have worked in practice usually for many years and been given the responsibility to handle clients and look after them. They are capable people but yes as I've eluded to previously CPD and support are a question mark.

How many Cheap Accountants are there in total?

 

[David Griffiths]

but yes as I've eluded to previously CPD and support are a question mark.

Is being elusive part of the plan?

 

[elaine@cheapaccounting]

The question of how you get the E in QBE is not really answered. Shouldn't the title of your blog post be "I've decided to only take on only qualified accountants. What do you think about my decision?"

LOL - love your dig there

Accountants who are experienced have worked in practice usually for many years and been given the responsibility to handle clients and look after them. They are capable people but yes as I've eluded to previously CPD and support are a question mark.

Accountants come in many shapes, sizes and backgrounds. I tend not to generalise but do have the strategy of recruiting qualified accountants. For us this works - it is one way of doing things. But business is 'never a one size fits all' place. I guess the important thing is that we respect each others choices and views!

How many Cheap Accountants are there in total?

You'll have to ask Cheap Accountants that - we provide cheap accounting services as well as giving free good quality advice on here of course

 

[TaxAssist]

Is being elusive part of the plan?

*alluded

 

[TaxAssist]

OK how many Cheap Accounting Associates are there?

P.S. Can you correct our business name on your blog please? It should be TaxAssist Accountants not Tax Assist

 

[elaine@cheapaccounting]

fyi A great article on franchising is in this month's ACCA mag - will post it up soon as it appears on line. A mention for TaxAssist Accountants and CheapAccounting.co.uk