Starting an Accountancy Practice

[Liquidity1]

Hi there

I am an exam away from becoming a qualified accountant with CIMA. All my work experience (4 years) to date has been in the public sector and I have been working predominantly as a management accountant (budget management, service developments, business planning etc).

CIMA doesn't cover tax in great detail, so I am planning to do take some masterclasses and maybe even sit the AAT exams to fill this gap in knowledge.

I want to set up my own accountancy practice specialising in small businesses. I am lucky to have jobs waiting from friends and friends of friends in business, but I recognise that practice isn't something I can just launch into.

My biggest concern is the gap in my practice experience, i.e. not knowing how to go about annual returns, corporation tax, quarterly VAT returns. So of course I would never consider taking on any jobs until I am 100% competent in all areas.

I have a 9-5/Mon-Fri job which I can't leave and I assume no practices offer work on evenings and weekends so I feel stuck! :|

I am keen to know what accountants established in practice would advise me?

Many thanks

Liquidity

 

[Mitchells Bristol]

Hello there

The best, and only, advice in my view is to start applying for jobs in practice. Work in practice for a number of years until you build up the skills you need to run your own practice.

If you do not know how to complete an annual return, a corporation tax return or a VAT return then you will be struggling to operate your own practice. I'm not entirely sure why your friends, or friends of friends, would suggest that they would be willing to use your services when you have no experience in these areas? Your clients will be expecting to meet with you to discuss their tax affairs, and you will need to draw upon your past experience in order to advise.

You may also need to look at whether CIMA require you to apply for a practising certificate in order to run your own practice. I don't know the answer as I have no involvement with CIMA, but most other Institutes do - which will mean you need to demonstrate and document your practical experience in order to be allowed to practise.

Hope this helps

 

[MyAccountantOnline]

I think you've got some very good advice above.

 

[Chris S]

The gap in your practical experience will mean that you will not be able to obtain a practising certificate for your practice. Unless you would be working in the business with someone who has the requisite experience and is able to obtain a certificate in his own right for the firm, I would not encourage you to start your own practice at this point.

 

[Liquidity1]

Chris / Nicola / Taxonomy

Thanks for highlighting the above.

I'm not in a rush start a practice but keen to set off in the right direction.

One problem is I will need to take a pay cut if I am to get a job in practice. It will be a back to basics learning approach to acquire these skills, which I assume are learnt mainly at assistant accountant level?

 

[Mitchells Bristol]

I think it very much depends what your skill-set is, and how well you are able to put that information across on your CV.

If you are able to take a set of client records and knock together a set of accounts, free from error, then you should aim to go into an organisation at above assistant level, in my opinion. But as a potential employer will be assessing your ability, in the first instance, from your CV and covering email, then you need to make it clear that although CIMA qualified and working in industry you do still have accounts preparation experience and are looking for some tax exposure in your next role.

If you don't have this basic level of accounts prep practical experience then you will probably be looking at ground level entry.

 

[Chris S]

You could also consider writing to smaller practices in your area who may be willing to take you on, give you vital practical experience, and may welcome the fact that they can shape you to a certain extent as from their point of view you will be like a blank canvas and hopefully receptive to their ways of working. It's worth a try, you've got nothing to lose.

 

[David Griffiths]

You could also consider writing to smaller practices in your area who may be willing to take you on, give you vital practical experience, and may welcome the fact that they can shape you to a certain extent as from their point of view you will be like a blank canvas and hopefully receptive to their ways of working. It's worth a try, you've got nothing to lose.

I don't think that you'll find smaller practices are exactly queing up to train people who are going to run off and start their own business as soon as they can.

 

[Chris S]

I don't think that you'll find smaller practices are exactly queing up to train people who are going to run off and start their own business as soon as they can.

Agreed from the employer's point of view but it's a good way of getting valuable experience for the employee. Alternative is an entry-level position in a larger firm probably. There's pro's and con's to both.

 

[JonnyCarter]

Hi Liquidity,

How are you getting on with your thoughts about working in practice?

You would need to prove that taxation was your passion, and you'd do that by passing exams.

Finish off your CIMA, then study ATT (not AAT) - this would give you an excellent grounding in tax, you'd have proved that you wanted to work in practice, you would have the theoretical skills and would then just need a little experience before you became a very useful person in a firm.

I'd like to offer to help you as much as I can. I've made the transition from Industry to Practice.

JC

 

[Liquidity1]

Hi Liquidity,

How are you getting on with your thoughts about working in practice?

You would need to prove that taxation was your passion, and you'd do that by passing exams.

Finish off your CIMA, then study ATT (not AAT) - this would give you an excellent grounding in tax, you'd have proved that you wanted to work in practice, you would have the theoretical skills and would then just need a little experience before you became a very useful person in a firm.

I'd like to offer to help you as much as I can. I've made the transition from Industry to Practice.

JC

Hi Jonny

Thanks for your offer to help, I will certainly be taking that up. Will PM you shortly.

The plan is in progress. I am currently studying for my final exam, which I will be sitting in November. Should all go well I hope to be studying for ATT after this. However, this is a pricey option and some people have recommended sitting the business compliance and corporate tax modules and just reading over the other subject areas. I'm undecided at the moment.

I downloaded the VT+ trial and have been playing around with the software using a dummy company. It doesn't seem that big a learning curve. The area I don't know much about is compliance, ie knowing which forms are required to be filled eg ct600... I am told ATT will cover this area.

I contacted three small accountancy practices but none were willing to offer experience. I will try others.

I plan only to work with SMEs - shops, restaurants, small clothing boutiques etc. Small scale, not too complicated!!!