Starting up my own accountancy practice
Discussion
I am in the process of setting my own Chartered Accountancy practice. I have worked in practice for many years, so I have good technical skills and experience and have thrown the last 3 months into preparing as much as I can.
Although it is going to be an experience performing all the roles myself, I'm really looking forward to it. Mixed, of course, with some nerves around going it alone and the disappearance of the monthly salary fairies.
Given the demographic of PH, it seemed the perfect place to ask the resident Company Directors a few questions around some areas, that will help me tailor my services.
As there is only one of me, I wanted to stay focused in the areas I can add value. So, my plan was not to do payroll and bookkeeping as this does seem more appropriately done, by the well titled, bookkeeper.
I am in contact with some local bookkeepers as we do have a natural handover, with me picking up statutory accounts, self assessment and VAT and corporation tax returns. Would you be happy with this arrangement from your accountant, or do you want them to cover the whole process from receipt to tax submission themselves?
Pricing. This is the other big question for me. I know that I would prefer to act on a monthly subscription model with clients, as this smooths out revenue for me and costs for them.
Rather than feel like this is a pile em high, sell em cheap service, I am including in my pricing a few hours for random questions from them and also at least two face to face meetings a year (quarterly for larger businesses).
That way clients feel free to pick up the phone, without worrying about additional billing and if they don't use it, I will give a 5% rebate at the end of the year.
I also need to try and avoid all of my work coming together at pinch points, like the tax year or statutory filing deadlines. So, my pricing model will also include a premium for work the client wants done at this time, or if they deliver information late and it ends up needing to be done then.
I am not sure whether this is best done as an increase in costs or a potential rebate again. I am thinking that it's easier, and more popular, to give back what's due than bill extra for what's needed.
Any feedback would be so gratefully received in terms of what you expect your accountant to do for you and the ideas I have around pricing. Plus, any other tips from the client side.
What would be really amazing, is if you wouldn't mind me providing you with a quote, in private of course. You tell me the services you would like, and I'll see whether I can make you fall off your chair or not!
Thanks for any advice received and I'll try and do the same. As that's good practice too
Although it is going to be an experience performing all the roles myself, I'm really looking forward to it. Mixed, of course, with some nerves around going it alone and the disappearance of the monthly salary fairies.
Given the demographic of PH, it seemed the perfect place to ask the resident Company Directors a few questions around some areas, that will help me tailor my services.
As there is only one of me, I wanted to stay focused in the areas I can add value. So, my plan was not to do payroll and bookkeeping as this does seem more appropriately done, by the well titled, bookkeeper.
I am in contact with some local bookkeepers as we do have a natural handover, with me picking up statutory accounts, self assessment and VAT and corporation tax returns. Would you be happy with this arrangement from your accountant, or do you want them to cover the whole process from receipt to tax submission themselves?
Pricing. This is the other big question for me. I know that I would prefer to act on a monthly subscription model with clients, as this smooths out revenue for me and costs for them.
Rather than feel like this is a pile em high, sell em cheap service, I am including in my pricing a few hours for random questions from them and also at least two face to face meetings a year (quarterly for larger businesses).
That way clients feel free to pick up the phone, without worrying about additional billing and if they don't use it, I will give a 5% rebate at the end of the year.
I also need to try and avoid all of my work coming together at pinch points, like the tax year or statutory filing deadlines. So, my pricing model will also include a premium for work the client wants done at this time, or if they deliver information late and it ends up needing to be done then.
I am not sure whether this is best done as an increase in costs or a potential rebate again. I am thinking that it's easier, and more popular, to give back what's due than bill extra for what's needed.
Any feedback would be so gratefully received in terms of what you expect your accountant to do for you and the ideas I have around pricing. Plus, any other tips from the client side.
What would be really amazing, is if you wouldn't mind me providing you with a quote, in private of course. You tell me the services you would like, and I'll see whether I can make you fall off your chair or not!
Thanks for any advice received and I'll try and do the same. As that's good practice too
Edited by duckers_26 on Saturday 13th April 13:21
One of the usual requirements when selecting such support is competency; i.e. how good are you at helping folk get things right first time so that they are paying what is due and no more.
How will you describe your competency to attract customers, other than through a pricing model (which may be a poor indicator of competency).
How will you describe your competency to attract customers, other than through a pricing model (which may be a poor indicator of competency).
Thanks for the response.
Competency wise, I have 20+ years experience as a chartered accountant, continuous professional development to stay up to date with changes and also the oversight of the institute of chartered accountants.
I have also invested in the latest software for tax and preparation of accounts. It includes lots of checks to make sure submissions are accurate and also does scenario analysis and prompts for missed allowances in terms of self assessment and CT.
Pricing wise I am using Sage (who have been great) software called GoProposal. It generates pricing that is consistent across pieces of work but scaled for factors like client revenue, quality of information they deliver, number of tax returns or sets of accounts etc.
So I can generate a price but short of phoning other accountants and wasting their time, I don’t know where the market sits as no-one advertises their prices.
If I go in too low I saddle myself with unprofitable work going forward and too high and I’ll be immediately discounted or have to cut the price which I need to avoid.
I don’t want to market myself on price as I am offering my availability for when a client has any question and also the software mentioned above is as good as anywhere. As well as compliance work I am also able to do what if analysis, management reporting, forecasting etc.
Having also just been through the formation of a business myself, I can see the complexity of it and the bureaucracy of anything to do with HMRC. This is a section of the market I can definitely relate to and they might be the next big thing.
Competency wise, I have 20+ years experience as a chartered accountant, continuous professional development to stay up to date with changes and also the oversight of the institute of chartered accountants.
I have also invested in the latest software for tax and preparation of accounts. It includes lots of checks to make sure submissions are accurate and also does scenario analysis and prompts for missed allowances in terms of self assessment and CT.
Pricing wise I am using Sage (who have been great) software called GoProposal. It generates pricing that is consistent across pieces of work but scaled for factors like client revenue, quality of information they deliver, number of tax returns or sets of accounts etc.
So I can generate a price but short of phoning other accountants and wasting their time, I don’t know where the market sits as no-one advertises their prices.
If I go in too low I saddle myself with unprofitable work going forward and too high and I’ll be immediately discounted or have to cut the price which I need to avoid.
I don’t want to market myself on price as I am offering my availability for when a client has any question and also the software mentioned above is as good as anywhere. As well as compliance work I am also able to do what if analysis, management reporting, forecasting etc.
Having also just been through the formation of a business myself, I can see the complexity of it and the bureaucracy of anything to do with HMRC. This is a section of the market I can definitely relate to and they might be the next big thing.
‘…too high and I’ll be immediately discounted’.
I’m not sure this is as absolute as you imply.
As you have indicated, costs aren’t as transparent as one would wish, so when taking a query for business, it’s sometimes not the price that is the overriding factor. It can be how responsive you have been to that initial inquiry. It could be that you’ve come via a recommendation. It may be that you are reassuringly expensive; it’s not always a race to the floor.
I’m not sure this is as absolute as you imply.
As you have indicated, costs aren’t as transparent as one would wish, so when taking a query for business, it’s sometimes not the price that is the overriding factor. It can be how responsive you have been to that initial inquiry. It could be that you’ve come via a recommendation. It may be that you are reassuringly expensive; it’s not always a race to the floor.
Isn't handling small business accounts a dying business model?
I use Freeagent (similar to Quickbooks etc) and it's exemplary at handling VAT, payroll, annual accounts, corporation tax amongst others. They also provide good support, I once asked a pension quesion (iirc how to categorise a SIPP payment) and had an answer within the hour.
I use Freeagent (similar to Quickbooks etc) and it's exemplary at handling VAT, payroll, annual accounts, corporation tax amongst others. They also provide good support, I once asked a pension quesion (iirc how to categorise a SIPP payment) and had an answer within the hour.
Freeagent sounds suspiciously cheap, is it really 300 quid for the software and the filing?
Who's check the filing is correct?
I'm not saying your always get what you pay for, I've used very expensive firms cheap firms, expensive one band bands, and cheap ones, and haven't noticed any correlation between quality and price anywhere along the line.
However free agent sounds dodgy
I pay 40 quid a month for Xero then 800 quid to an accountant and it still feels like I'm ripping her off for what she brings to the table.
I can' imagine this is an area you want to shave money off?
Who's check the filing is correct?
I'm not saying your always get what you pay for, I've used very expensive firms cheap firms, expensive one band bands, and cheap ones, and haven't noticed any correlation between quality and price anywhere along the line.
However free agent sounds dodgy
I pay 40 quid a month for Xero then 800 quid to an accountant and it still feels like I'm ripping her off for what she brings to the table.
I can' imagine this is an area you want to shave money off?
lizardbrain said:
However free agent sounds dodgy
It's a well established solution, so it's not dodgy. Just checked pricing, £330+VAT per annum, or £33+VAT per month. In fact it costs zero if you have a Natwest/RBS business account.Edit: Natwest now owns Freeagent, so that's about a reputable as it gets: https://www.natwestgroup.com/who-we-are/our-brands...
Edited by Olivera on Saturday 13th April 16:43
Potentially worth specialising in particular verticals. I used to run a financial services lead generation business, for example. The VAT treatment was complex and it would have really helped to use an accountant from the get-go who understood intermediaries, financial product VAT exemptions and HMRC. In our business we had 7 figures riding on it and the VAT specialist we used to negotiate with HMRC was £500p/h. Our accountant at the time was Mazars. We'd have left them if someone had the competency of our specialist and offered general accounting on top.
Olivera said:
Isn't handling small business accounts a dying business model?
I use Freeagent (similar to Quickbooks etc) and it's exemplary at handling VAT, payroll, annual accounts, corporation tax amongst others. They also provide good support, I once asked a pension quesion (iirc how to categorise a SIPP payment) and had an answer within the hour.
Yes, I do agree that in the long term the market is going to get eaten away by AI and technology generally, but I think this will start at the bookkeeper side if things. There is software that will scan a receipt or invoice and turn it into an accounting post with 99% accuracy.I use Freeagent (similar to Quickbooks etc) and it's exemplary at handling VAT, payroll, annual accounts, corporation tax amongst others. They also provide good support, I once asked a pension quesion (iirc how to categorise a SIPP payment) and had an answer within the hour.
For me this is a maximum 15 year career and I reckon that in that time, there will still be enough people who are great at running their business but hate or are intimidated by the accounts side of things. Or just can’t be bothered and it doesn’t interest them.
Plus areas such as tax legislation are a minefield of strange rules, where HMRC have over time, tacked strange little rules on to try and close off loopholes.
So while there are people like you who are proficient and happy to do it themselves, I know from friends that people don’t even know the basics and are wasting simple things like tax deduction for utilities on their home office.
And don’t get them started on a set of accounts and what half the disclosures actually mean. One, who runs a successful multi-location retailer had her mind blown by the concept of accrual accounting.
So, I’m hoping that in this period I need the business to provide for me, there will be enough going on to make me a reasonable living.
Eric Mc said:
Go for it.
Apart from the technical aspects, the main requirement is good people skills.
And don’t be too concerned about AI. We’re not going to be replaced by automation just yet.
And I’m hoping that’s what I can bring to the table. Apart from the technical aspects, the main requirement is good people skills.
And don’t be too concerned about AI. We’re not going to be replaced by automation just yet.
I’ve just come out of a big four accountancy practice on the back of a constructive dismissal claim which was settled out of court in the end.
One day, my boss decided they wanted me out, but made it so obvious that the goal was left wide open for this claim.
I won’t go into details but the undermining and generally vindictive treatment has massively undermined myconfidence, to the extent that I was contemplating going from being sufficiently senior to sign in the firm’s name to being a delivery driver.
This is no offence meant to delivery drivers, just that it was hardly the best use of almost 25 years experience as a chartered accountant.
To clarify, what I meant is that I’m by no means your traditional stuffy accountant with a superiority complex. I’ve decided that whatever happens I’m going to be myself and not some nightmare vision of what I think people want to see.
I’m perfectly happy to go from handling the account for a US investment bank and having 100 people report into me, to working with Tracy the local florist to see whether she can reduce her tax bill by making use of the Annual Investment Allowance to get a 100% deduction on her new laptop.
Off topic but one of the more bizarre offers of help when I left work came from a mate who makes his money doing onlyfans. He offered to create some material with me. No charge man, I just don’t wanna see you lose your place 😂😂😂
I’m perfectly happy to go from handling the account for a US investment bank and having 100 people report into me, to working with Tracy the local florist to see whether she can reduce her tax bill by making use of the Annual Investment Allowance to get a 100% deduction on her new laptop.
Off topic but one of the more bizarre offers of help when I left work came from a mate who makes his money doing onlyfans. He offered to create some material with me. No charge man, I just don’t wanna see you lose your place 😂😂😂
Edited by duckers_26 on Saturday 13th April 21:14
Think it is right in regards to the industry nit dying off anytime soon, QuickBooks etc make it look very easy for you to do your own book when in reality it’s anything but and generally anyone we see doing their own books well tends to have a finance or accounts background or is quite high on the general intelligence scale.
Sounds like you’ve worked with higher level businesses than the accountant in the high street though, I wouldn’t worry yo much about offering rebates though.
Most new clients coming from other accountants tend to complain of lack or clarity and responsiveness rather than price
Sounds like you’ve worked with higher level businesses than the accountant in the high street though, I wouldn’t worry yo much about offering rebates though.
Most new clients coming from other accountants tend to complain of lack or clarity and responsiveness rather than price
My experience of clients trying to use computerised book keeping systems is extremely mixed.
By and large, it's not very positive. In my view, if an individual does not have at least a basic grounding in accounting techniques and practices, they are going to make a bit of a pig's ear of their record keeping.
The fundamental things they need to know sonmething about are -
double entry
revenue v' capital
control accounts
reconciliations
Yes, much of the postings can be automated but in all but the simplest of businesses, knowing the way the system is performing the entries helps a huge deal in understanding how the postings are being handled. And, no matter how automated most transactions are, there will still be many transactions that need to be sorted manually or, at the very least, checked and corrected if the system hasn't done exactly what you thought it should have done.
And I can guarantee that hardly anyone I know who uses such systems ever gets such things as hire purchase or lease transactions correctly.
When I get my hands on a clients computerised records, I spend just as much time (sometimes more) sorting out the mess they have made as I would have if they had used something more basic.
By and large, it's not very positive. In my view, if an individual does not have at least a basic grounding in accounting techniques and practices, they are going to make a bit of a pig's ear of their record keeping.
The fundamental things they need to know sonmething about are -
double entry
revenue v' capital
control accounts
reconciliations
Yes, much of the postings can be automated but in all but the simplest of businesses, knowing the way the system is performing the entries helps a huge deal in understanding how the postings are being handled. And, no matter how automated most transactions are, there will still be many transactions that need to be sorted manually or, at the very least, checked and corrected if the system hasn't done exactly what you thought it should have done.
And I can guarantee that hardly anyone I know who uses such systems ever gets such things as hire purchase or lease transactions correctly.
When I get my hands on a clients computerised records, I spend just as much time (sometimes more) sorting out the mess they have made as I would have if they had used something more basic.
Best of luck. I made the leap and started my own practise about 2 years ago now.
Its not easy, but nothing ever is - growing at an alarming rate (good thing), and as has been mentioned before, I think the most important thing is good people skills (apart from the obvious, this is PH after all).
Its not easy, but nothing ever is - growing at an alarming rate (good thing), and as has been mentioned before, I think the most important thing is good people skills (apart from the obvious, this is PH after all).
Abc321 said:
Best of luck. I made the leap and started my own practise about 2 years ago now.
Its not easy, but nothing ever is - growing at an alarming rate (good thing), and as has been mentioned before, I think the most important thing is good people skills (apart from the obvious, this is PH after all).
Would it be OK for me to DM you and ask a few questions?Its not easy, but nothing ever is - growing at an alarming rate (good thing), and as has been mentioned before, I think the most important thing is good people skills (apart from the obvious, this is PH after all).
Countdown said:
Duckers, I'm surprised you don't already have a pool of clients. I'm not in practice but I constantly get asked by family and friends to help out with their self assessment returns (fortunately fairly uncomplicated basic stuff)
I’ve got a couple of friends I have helped out with self assessment but I’m generally trying to get work separate from family and friends as I think it has the possibility of ending badly.Eric Mc said:
And I can guarantee that hardly anyone I know who uses such systems ever gets such things as hire purchase or lease transactions correctly.
When I get my hands on a clients computerised records, I spend just as much time (sometimes more) sorting out the mess they have made as I would have if they had used something more basic.
Same here, especially when the client thinks they've done all the work for you!When I get my hands on a clients computerised records, I spend just as much time (sometimes more) sorting out the mess they have made as I would have if they had used something more basic.
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