Considering starting a book-keeping business

Considering starting a book-keeping business

Author
Discussion

Subbuteo

Original Poster:

13 posts

93 months

Monday 27th June 2016
quotequote all
Hello Folks

Long time lurker of the forums here, only just signed up to post so please be kind!

I'm considering starting a very small home business to augment my full time earnings. I'm a qualified chartered accountant, have spent the last 8 years working as a financial/management accountant and I would say I am good at my job - hopefully my boss would agree biggrin

I'm really keen to start using my qualification to earn some additional income, and have been for some while (only casually until recently) pondering the idea of setting up a small bookkeeping enterprise as a sole trader just to top up my full time work earnings.

To that end I'd be really keen to hear from anyone working in a similar market. What I don't have any knowledge of at the moment is the market for the type of product/service in my area. Are book-kepeers even required these days in the world of 'all in one' software packages that are marketed as being so simple that even the most un-savvy person could pick them up and run with it? Short of my friend asking me to help him with his self assessment once a year, I've never done any kind of accountancy/bookkeeping work away from my actual day job.

I'm assuming (hoping) there is still a market for this kind of service, especially perhaps amongst sole traders who put every hour they have into their business and perhaps aren't so hot on the financial/admin side of things.

I'm very hard working and would be very proactive and conscientious in terms of putting the legwork in to try and get word 'out there' in terms of attracting business. I've always been taught that you get out of something what you put in, and I have no delusions of grandeur in terms of scale. Once I'm up to full speed with it, I'd be delighted to pocket £5k a year on top of my salary.

Overheads should be small for this kind of work, and I have the qualification and knowledge I need to offer the service, so I can't see why this shouldn't be a goer with a bit of hard work, but would be really pleased to hear from anyone in a similar position about your story smile

Thanks

Eric Mc

121,779 posts

264 months

Monday 27th June 2016
quotequote all
My experience is that sole traders are not actually big enough to warrant having external bookkeepers. Medium sized partnerships or limited companies are probably a better bet.

The trigger for the need for regular bookkeeping is VAT registration - and even that is not that onerous if the business is small enough to qualify for the Flat Rate Scheme.

s2kjock

1,677 posts

146 months

Tuesday 28th June 2016
quotequote all
If you are a half decent qualified CA you'll make more money sticking with that than moving into book-keeping.

There is a lot of work for decent bookkeepers but it is never likely to pay as well.

The only CAs I know who now do just bookkeeping are either those who were not cut out to be accountants or those for whom a more flexible lifestyle is preferable such as having child or other care commitments.

Subbuteo

Original Poster:

13 posts

93 months

Tuesday 28th June 2016
quotequote all
s2kjock said:
If you are a half decent qualified CA you'll make more money sticking with that than moving into book-keeping.

There is a lot of work for decent bookkeepers but it is never likely to pay as well.

The only CAs I know who now do just bookkeeping are either those who were not cut out to be accountants or those for whom a more flexible lifestyle is preferable such as having child or other care commitments.
Thanks for that - but to make it clear I'm not looking to change what I do for a full time living, I'm talking about something I can take on in my own time, from home, to supplement it - using the skills I already have from my full time profession. I have no desire to make this into a full time job at any point.

It's not that I'm badly paid for what I do or anything, and I enjoy my full time role, I just like the idea of doing a little something off my own back.

Also for clarity I was using the term bookkeeping as a very broad/lazy catch-all for basic financial admin - i.e. perhaps helping sole traders/those with slightly more complex (to non financial people) affairs (i.e. rental income/investment income/self employment) with self assessment for a small fee. The only real cost is my time and I'm willing to put plenty of that in to make something viable.

Whilst that sort of thing is no doubt not a challenge for many savvy business owners, I imagine there's still a market for it? There must be a lot of people who struggle to face doing their self assessments judging by how much money HMRC pull in with penalties?

LaurasOtherHalf

21,429 posts

195 months

Tuesday 28th June 2016
quotequote all
How would your current employer react to your "extra curricular" activities? Does your contract contain any no competition clauses?

I think there must be plenty of money to be made doing the services you say, someone needs to do it and a lot of small business owners do as you say like to focus on the business rather than tedious admin. My concern would be how you could achieve a level of service "out of hours" so to speak.

The small admin jobs you describe can be done on an ad hoc basis but if you're not doing full CA services your clients will always need to use another CA for the important stuff. Why would they bother?

This is ignoring the fact that you're establishing a business on only the mundane and boring part of your trade-would this be an exciting business to run? Only you can decide if this is for you I guess.


s2kjock

1,677 posts

146 months

Tuesday 28th June 2016
quotequote all
Subbuteo said:
Thanks for that - but to make it clear I'm not looking to change what I do for a full time living, I'm talking about something I can take on in my own time, from home, to supplement it - using the skills I already have from my full time profession. I have no desire to make this into a full time job at any point.

It's not that I'm badly paid for what I do or anything, and I enjoy my full time role, I just like the idea of doing a little something off my own back.

Also for clarity I was using the term bookkeeping as a very broad/lazy catch-all for basic financial admin - i.e. perhaps helping sole traders/those with slightly more complex (to non financial people) affairs (i.e. rental income/investment income/self employment) with self assessment for a small fee. The only real cost is my time and I'm willing to put plenty of that in to make something viable.

Whilst that sort of thing is no doubt not a challenge for many savvy business owners, I imagine there's still a market for it? There must be a lot of people who struggle to face doing their self assessments judging by how much money HMRC pull in with penalties?
There certainly is demand, but you do need to deliver on time for book-keeping to meet deadlines, and that might not fit well with something you might wish to perform flexibly in your free time.

If you make an extra £5k gross from this, then you may well be cutting that in half after tax, it is not pensionable, and doesn't give you paid holidays. If I thought I could earn £5k extra gross doing the day job it would be more appealing.

Another thing to consider is whether you would need a practising certificate as a CA earning money from providing financial related services? I don't know the answer, but it would be something I would want to check first.

Eric Mc

121,779 posts

264 months

Tuesday 28th June 2016
quotequote all
I'm sure you would need a Practising Certificate and Professional Indemnity Insurance too.

Also, bear in mind that the whole landscape regarding tax returns and Self Assessment is changing from 2018/19 onwards and this will have a major effect on how accountants provide services to their clients.

Beetnik

502 posts

183 months

Tuesday 28th June 2016
quotequote all
...and MLA registration...

...and DPA registration...

Subbuteo

Original Poster:

13 posts

93 months

Wednesday 29th June 2016
quotequote all
Thanks guys, seems like I need to do a bit more homework and find out if it's something that's ever really going to be do-able given my full time commitments. Points noted re level of service etc.

Countdown

39,690 posts

195 months

Wednesday 29th June 2016
quotequote all
s2kjock said:
Another thing to consider is whether you would need a practising certificate as a CA earning money from providing financial related services? I don't know the answer, but it would be something I would want to check first.
Depending on which CCAB body you're registered with you may need to have worked X years for an accountancy practice before they would issue you with a practising certificate.

ninja-lewis

4,226 posts

189 months

Monday 25th July 2016
quotequote all
Belated suggestion - if you can forgo the money, you could look at mentoring schemes instead. Sitting down with small businesses/start ups, helping them to identify the next step and giving them a nudge in the right direction. Mentoring rather than advising or doing the work for them.

Simpo Two

85,149 posts

264 months

Monday 25th July 2016
quotequote all
I've been a sole trader for 25 years and always used a bookeeper to do my tax returns. I have no idea how it all works and don't have the right shape brain to learn it. It is all desperately dull and 'does me 'ed in'. Many of my friends and suppliers are also sole traders (or very small Ltd Cos), so I'd say if you get into the right niche (mine was video production and photography) you could hoover up quite a bit of work. The hard part for you will be how you find it.

Edited by Simpo Two on Tuesday 26th July 09:22