Accountant practice set-up from zero.

Discussion in 'Askaboutbusiness' started by papervalue, Dec 5, 2015.

  1. papervalue

    papervalue Frequent Poster

    Posts:
    716
    ACCOUNTANTS PRACTICE SET-UP
    I hope to set up a accounting practice in Dublin region in early half of 2016. I would welcome constructive advise from Accountant's who own practices and ones that have set up recently. I have listed a few items below and welcome your input and constructive advise as you have experience of this.

    BACKGROUND
    About to hit 40, am Working in Accountants/Auditor Practice, who are now downsizing and more than likely be made Statutory redundant in the next month or so. Have been working in practice approx 16 years over 3 different firms. Have done Sole-trader, Audit, non-Audit, company sec etc normal small practice work.

    PRACTICE.
    Plan to apply for a practice cert only.


    Don't plan to apply for Audit Cert- Reason mainly is personally feel too much regulation to adhere to, Audit Cert holder's may attract more attention from institute, Margin too tight on them, The Majority of Company's now gone Non-Audit. I know I lose out on some apartment management guarantee company's/charities but if had only few audits, could not really justify the risk of audit cert. Heard an example at CPD event where a firm just had 1 audit and the file was not right for that and in effect that was the only audit file institute could look at, so he failed a review over a single audit. ( Justifying reason's why not drawn to applying for audit cert as well)


    STRUCTURE( Legal Point of view as well)
    Be interested to see/hear what structure you feel more comfortable with
    SOLE-TRADER
    Not fully drawn to this structure. Not pushed to trade under own personal name( Trading as might get around that)
    Any reasons to do under Sole-trader?

    COMPANY
    Feel it would give me extra protection re limited liability.

    Plan to go with myself as Only Director and 100% shareholder and Maybe Company formation agent as Company Sec/Registered Office to start with.

    Loan to Company some start-up Money from statutory redundancy to cover initial costs.

    Turnover for first 12 months will be low- Plan to Vat register as if Vat register down the line some of smaller clients may see the Vat as price increase.
    More than likely makes sense to Vat register to get vat back on initial purchases

    Salary- Plan first to repay Director loan and vote tax efficient low salary( all depends on getting clients/ Cash flow)

    Re Close Company surcharge- is 100% of profit surchargable in future- Have firms divided income into different streams like bookkeeping/ Accounts preparation/Company sec and apportioned surcharge?

    May be easier to sell Company if selling down the line.

    CONTINUITY OF PRACTICE( Probably item most worried about0
    Does anyone know of anyone willing to offer this?
    Have you much difficulty getting it?

    Does the person giving continuity of practice expect anything in return?

    If someone is wiling to PM me a sample one without the names, I appreciate it.

    If person offering it has an audit licence- I be willing to refer Audit work there way.

    PROFESSIONAL INDEMNITY INSURANCE.
    If i set up a company who is PI insurance in - Is in my personal name or Company name?

    Any idea what initial cost would be for low turnover plus meet institute standards of insurance?


    ACCOUNTS PRODUCTION SOFTWARE

    The package i used in the past/now is sage accounts production.

    My understanding is I will have to buy a new licence so significant cost here( If go for 50 client pack approx 1,845 to start with).

    Would you continue with what you know or should I try Relate?

    What are your experiences?

    Also did you buy new versions of Microsoft Excel/word( Just want to keep all software legal)

    Plan to budget about 1k/1.5k to cover Lap-top and Excel/Word licence.

    So in effect software/computer's will come in around 3,500( A lot of these are one of costs with sage being renewal fee of approx 615 in future)

    How do you deal with photocopying- Do you have a copier or are you using scanner/copier/printer combined?

    COMPANY SEARCH
    What vehicle do you use for company searches and gives quality information at good price. Is it vision net, search for less or direct with Cro


    RENT/RATES
    Do need rental address as need to keep separate from personal rental address

    If I got serviced office desk for initial few months in a business centre, at least avoids rates.

    Storage is an issue I have to work out- Scan as much info a possible.


    CLIENTS/ETHICAL ISSUES
    Where did you get your initial clients from?

    A small number of my current firms(employer) client might join me under there own free will. My guess is some of them will leave anyway from firm and is there anything stopping me from acting for them going forward as if they leave the firm anyway the value of them is nil to the firm if gone anyway? Has anyone been through this process and was there any comeback on them? Be mostly people I dealt with exclusively as only point of contact in last few years and would they have no contact with partners in the firm.
    I don't have any non-compete clause signed.

    OTHER

    Have to do institute day exam and make application

    Any issue setting up a new TAIN with Revenue?

    The above is a bit long I know, but would appreciate constructive help and point out any other useful advise.

    Thank You

    Papervalue.
     
  2. cremeegg

    cremeegg Frequent Poster

    Posts:
    1,199
    You should look at the possibility of dropping your membership of the institute.

    I know it was hard won and seems a shame to walk away from it but thats a sunk cost now.

    The downside of membership is obvious, a huge burden of compliance and membership fees.

    If you are not going to be a registered auditor what is the advantage.

    If you feel that you want a practicing cert/registered auditor in the future you can rejoin relatively easily.

    Believe me your clients won't know or care.
     
    T McGibney likes this.
  3. capnhand

    capnhand Frequent Poster

    Posts:
    105
    ACCOUNTANTS PRACTICE SET-UP
    I hope to set up a accounting practice in Dublin region in early half of 2016. I would welcome constructive advise from Accountant's who own practices and ones that have set up recently. I have listed a few items below and welcome your input and constructive advise as you have experience of this.

    Set up on my own in 2009 from nothing!!! At the time it was literally no other choice having been made redundant and with no jobs available elsewhere. Some very dark days indeed. Today, still working on my own with no staff but growing year on year.

    BACKGROUND
    About to hit 40, am Working in Accountants/Auditor Practice, who are now downsizing and more than likely be made Statutory redundant in the next month or so. Have been working in practice approx 16 years over 3 different firms. Have done Sole-trader, Audit, non-Audit, company sec etc normal small practice work.

    PRACTICE.
    Plan to apply for a practice cert only.


    Don't plan to apply for Audit Cert- Reason mainly is personally feel too much regulation to adhere to, Audit Cert holder's may attract more attention from institute, Margin too tight on them, The Majority of Company's now gone Non-Audit. I know I lose out on some apartment management guarantee company's/charities but if had only few audits, could not really justify the risk of audit cert. Heard an example at CPD event where a firm just had 1 audit and the file was not right for that and in effect that was the only audit file institute could look at, so he failed a review over a single audit. ( Justifying reason's why not drawn to applying for audit cert as well)

    If you are starting out on your own you need to make use of all the sources of revenue that you can get. If there is a service that you can offer and you are able to do it competently, then you should offer it. I understand the level of risk involved however there are still some clients that will want the audit service especially if there are 3rd party investors involved. There is always still the issue of late fillng returns. A few audits will easily cover the membership costs as well as generate some revenue for you. Also if the company looses the audit exemption you will still be able to keep the work in house and not have to give some of the revenue away to another firm. I have picked up plenty of clients in this way. I have been through one monitoring visit so far which I passed. A bit nerve racking but not as difficult to reach the standard required for a pass as you would think. You just make sure you get your bank letters everytime etc and a repect for what you are signing off ie never ever sign off unless you are happy with what you have got in your file.


    STRUCTURE( Legal Point of view as well)
    Be interested to see/hear what structure you feel more comfortable with
    SOLE-TRADER
    Not fully drawn to this structure. Not pushed to trade under own personal name( Trading as might get around that)
    Any reasons to do under Sole-trader?

    COMPANY
    Feel it would give me extra protection re limited liability.

    Plan to go with myself as Only Director and 100% shareholder and Maybe Company formation agent as Company Sec/Registered Office to start with.

    Loan to Company some start-up Money from statutory redundancy to cover initial costs.

    Turnover for first 12 months will be low- Plan to Vat register as if Vat register down the line some of smaller clients may see the Vat as price increase.
    More than likely makes sense to Vat register to get vat back on initial purchases

    Salary- Plan first to repay Director loan and vote tax efficient low salary( all depends on getting clients/ Cash flow)

    Re Close Company surcharge- is 100% of profit surchargable in future- Have firms divided income into different streams like bookkeeping/ Accounts preparation/Company sec and apportioned surcharge?

    May be easier to sell Company if selling down the line.

    I am still operating as a sole trader at the moment and will probably look to incorporate down the line. I would think if you can incorporate from the start this would be better. The option was not available to me when I started up originally.

    CONTINUITY OF PRACTICE( Probably item most worried about0
    Does anyone know of anyone willing to offer this?
    Have you much difficulty getting it?

    Does the person giving continuity of practice expect anything in return?

    If someone is wiling to PM me a sample one without the names, I appreciate it.

    If person offering it has an audit licence- I be willing to refer Audit work there way.

    Send me a PM if you want

    PROFESSIONAL INDEMNITY INSURANCE.
    If i set up a company who is PI insurance in - Is in my personal name or Company name?

    Any idea what initial cost would be for low turnover plus meet institute standards of insurance?

    Look to spend in the region of 300-500 pa. Shop around depending on the level of indemnity you require.


    ACCOUNTS PRODUCTION SOFTWARE

    The package i used in the past/now is sage accounts production.

    My understanding is I will have to buy a new licence so significant cost here( If go for 50 client pack approx 1,845 to start with).

    Would you continue with what you know or should I try Relate?

    What are your experiences?

    Also did you buy new versions of Microsoft Excel/word( Just want to keep all software legal)

    Plan to budget about 1k/1.5k to cover Lap-top and Excel/Word licence.

    So in effect software/computer's will come in around 3,500( A lot of these are one of costs with sage being renewal fee of approx 615 in future)

    How do you deal with photocopying- Do you have a copier or are you using scanner/copier/printer combined?

    My opinion.. Sage is a dead loss. Steer clear!!! €1845 is nuts. I originally went with CCH for a few years but it just wasnt being updated enough and when the updates came they were ludicrously wrong. Moved to Relate last June when CA 2014 came in and so far it is working out fine on the whole.

    You will need to get your own copy of excel/word. A printer/scanner and a decent laptop to run all of your software. Nothing high end just functional. Virus software and online backup such as mozy pro etc


    COMPANY SEARCH
    What vehicle do you use for company searches and gives quality information at good price. Is it vision net, search for less or direct with Cro

    I use seach for less. Have never used vision net but their sales team were very pushy last month in the middle of tax return season. I ended up having to tell them to xxxx off and stop bugging me. Otherwise there is not much to choose between either of them.

    RENT/RATES
    Do need rental address as need to keep separate from personal rental address

    I started off in a bedroom of the house. It was fine in the beginning but eventually I moved out into a small office which is where I have been ever since. It is very important that you cut your cloth to suit your measure and only take on an office if you can afford it.

    If I got serviced office desk for initial few months in a business centre, at least avoids rates.

    Storage is an issue I have to work out- Scan as much info a possible.

    Keep it simple... Filing cabinets are cheap. Dont print out anything if you can keep it on your laptop etc. Otherwise unless you have access to an expensive scanner, you will be spending a heck of a lot of time scanning everything. Then you will have to spend money on software to help you retrieve the information. Keep it simple and cost seffective from the start.


    CLIENTS/ETHICAL ISSUES
    Where did you get your initial clients from?

    Networking, website, referals, etc anywhere and everywhere. Always be on the look out for an opportunity to make new contacts and leads. Learn how to network effectively.

    A small number of my current firms(employer) client might join me under there own free will. My guess is some of them will leave anyway from firm and is there anything stopping me from acting for them going forward as if they leave the firm anyway the value of them is nil to the firm if gone anyway? Has anyone been through this process and was there any comeback on them? Be mostly people I dealt with exclusively as only point of contact in last few years and would they have no contact with partners in the firm.
    I don't have any non-compete clause signed.

    If they do they do.. Many may say they will but when it comes to the crunch they may not move. Many may come because they think you will do more for less and because you are cheap. Even at this early stage you need to vet your new clients and resist the urge to take on another firms dross. They will take up huge amounts of your time and for little reward. Non compete clauses are usually very hard to enforce and a client is free to move if they wish.

    OTHER

    Have to do institute day exam and make application

    Any issue setting up a new TAIN with Revenue?.

    Nope dont remember that being a problem.

    The above is a bit long I know, but would appreciate constructive help and point out any other useful advise.

    Thank You

    Papervalue

    Dont give up your membership to your institute!! While it is probably true that the very small clients will not care whether or not you are qualified or not. They are not important. Your aim is to pick up a few decent clients who will pay you a decent fee for a decent amount of work. They will certainly care if you are qualified or not.

    So in summary, the road that you have chosen is not a easy one. You will need to work very hard to bring in new work, managing your own time and resources, making sure that you are paid as well as managing your own cashflow. This can be very rewarding when things are going well but can be very stressful and not to mention lonely when things are going not so well. There will be ups and downs and generally it will take you 3-4 years before you can say for sure that you will be able to survive and make a good living.

    You play to your strengths, you do what you need to do to grow your practice. If that means doing audits, payroll, bookkeeping etc and you are capable of doing that work then so be it. You should only close off work that you are not capable of doing.

    Bets of luck with it and welcome to the wonderful world of the self employed. Some days you are the dog, but other days you are the lamppost.

    Capnhand
     
  4. kennyb3

    kennyb3 Frequent Poster

    Posts:
    268
    Are you going down the self employed route as your choices are limited employment wise or because you want to?

    How are things coming along?
     
  5. thedaddyman

    thedaddyman Frequent Poster

    Posts:
    609
    Go and talk to your Local Enterprise Office. They can give very good advice on starting your own business, they do some good courses and worst case if you go to some of their courses and classes, you'll make contacts with other start ups who may be looking for an accountant. There can also be grant aid for things like a website

    Re the person who suggested you save everything to a laptop. Firstly ensure you have proper encryption in place and secondly, ensure you have it all backed up and do so at least daily. Otherwise if it packs up or gets stolen or hacked, you're out of business
     
    capnhand likes this.
  6. Black_Adder

    Black_Adder Frequent Poster

    Posts:
    158
    I thought capnhand gave a very extensive reply - I just don't see any response from papervalue.
    I hope they have been in contact.

    Folks its important to people that take time and effort to reply that it gets acknowledged. Maybe it has.
     
  7. papervalue

    papervalue Frequent Poster

    Posts:
    716
    Just seem the extra replies now-

    Going the Self Employed Route as feel now as will be made redundant soon, feel like giving Self Employment a go. Feel do need to try no matter the outcome. It does not lock me out of Paye employment opportunities in future but at present don't feel like going straight to another Job if I got one tomorrow as do need new goals to achieve for myself.

    Starting the application process at present and getting the different items together for that.

    Will look at any grants/enterprise board offering's but re back up will be very careful re this

    Carpnhand gave a excellent reply and I have thanked him back in Dec via Private message.

    Thanks for all replies to date

    Papervalue
     
    kennyb3 likes this.
  8. GabbyTheKing

    GabbyTheKing Registered User

    Posts:
    11
    Hi Papervalue, did you go ahead with it? How did you get on in your first year. Did you break 50k odd if you don't mind me asking in the first year in new clients? I'm thinking of the same type of enterprise but view 50k as the point where I have enough drawings to feed ourselves. I'm setting up now at the moment and I'd be very interested in talking to any of ye. Capnhand has a brilliant opinion. If I could add I'm going with Sole trade however so I can sell to a company in a few years and capitalize the Client list when the CGT Rate comes down again. In relation to Audit Certificate how hard is it to get somebody to stand for you in relation to time of death? In relation to client account any feed back in relation to this. Does having a Client account require a client account audit? I have never hear of it but want to know what I'm signing up for.