Partnerships Archives

Starting your own business after redundancy

Posted on August 3, 2022 | by admin

Facing redundancy can be incredibly challenging, but it could also be the perfect time to start a brand new career based on your interests, your lifestyle and your aspirations.
Does this sound too good to be true?
With these five steps, we can help you transform your redundancy package into your very own startup:

1) Take advantage of your notice period

Typically, you’ll need to work a notice period. Instead of worrying about what comes next, use this time to start planning your new venture!
Dive into research, enrol in training and network as much as possible. The sooner you can start, the better! After all, wouldn’t you prefer to plan for your future whilst you’re still on the payroll?

2) Develop a business plan

Success is all about strategy, so it is important to develop a business plan.
Every business plan will look slightly different, but the main areas you want to focus on are the:

Executive summary – create a brief overview of your business detailing what services you offer and what you intend to achieve.
Management bio – this is your opportunity to introduce yourself, your values and your professional experience.
Marketing plan – identify your target audience, USP and market competitors before explaining how you intend to attract your desired audience.
Financial plan – because you’re just starting out, your financial plan will be primarily made up of projections (sales projections, expensive projections, cash flow projections etc.). Make sure you’re thorough with your research if you intend to achieve accurate estimates.

Your business plan will become the blueprint for your company, so the more information you can include, the better – particularly if you want to attract investors!

3) Address any legalities

To establish a legitimate business, you need to fulfil certain legal requirements. Now, these requirements may vary depending on your business model and industry, so it’s always worth checking whether you need to obtain a specific type of permit or insurance.
You can find these answers by visiting the government website or checking with your relevant industry bodies.
It is also worth hiring an accountant early on to advise you on the financial aspect of your business.

4) Open a business bank account

This next point is directed specifically to our sole traders. Although you don’t have to open a business account, we strongly suggest you do. It will make your bookkeeping 10x easier! So unless you want to waste your time separating your expenses and risk receiving a penalty, you should seriously consider setting up a business bank account.
If you are starting a limited company this is also something you will need to do, however it is essential rather than it just being strongly advised.

5) Set yourself boundaries

Starting a business is an exciting endeavour. However, it can become all-consuming. So for our final point we wanted to discuss the importance of setting yourself boundaries and practising self-care.
Firstly, give yourself some grace. Redundancy is incredibly difficult to navigate, so try not to be too hard on yourself – especially during those early days.
And secondly, start as you mean to go on. Give yourself lunch breaks, take time off and allow yourself opportunities to relax. Only then can you avoid burnout and achieve sustainable growth.

When life hands you lemons, make lemonade

No one wants to be made redundant – but that doesn’t mean it has to be all doom and gloom. Instead, this could be the start of your exciting adventure into entrepreneurship! So take the chance, pursue your passion and totally transform your career. You may just find redundancy works in your favour.

Why do we ask for your bank statements?

Posted on April 1, 2022 | by admin

Depending on which service you are on, you will find that you receive requests from members of our team asking for copies of your bank statements. You may receive different emails from different team members depending on the work they are undertaking for you. Whilst we try to eliminate asking for the same information on multiple jobs sometimes there are instances where information is requested more than once. This may be sent as part of an auto request from our system, then again manually by an individual looking at your records in real-time.
We would like to clarify why you are asked for these and why it is so important they are provided to us when asked.

Why do we request copies of your bank statements?

We request copies of your bank statements to check the balances in your accounting software are correct and that all transactions have been correctly accounted for. Many of you will have ‘bank feeds’ from your bank accounts which feed transactions directly into your accounting software. Whilst bank feeds are usually reliable there can be instances where they drop out for security purposes or there are blips where transactions are missed or duplicated by the feed. In order for us to spot these errors in a timely manner, and to ensure your records are always as accurate as possible, we will ask for copies of your bank statements for a given period or as at a given date to check.
If entering transactions from your bank account manually into your accounting software without bank feeds there is always a larger risk of errors – if you would like to discuss bank feeds with us or you need any help with this please get in touch.

When will we request copies of your bank statements?

Depending on your service levels with us or the nature of your business you will get asked for statements at different intervals. This could be in relation to the following jobs:

Bookkeeping service (once a month)
Monthly Review (once a month)
Quarterly Review (once a quarter)
Year-end accounts – 3 months before your year end as a 9 month ‘Health Check’ and again once your year-end date has passed
Sole trader accounts and tax return – annually (unless you have our sole trader bookkeeping service)
Ad-hoc – if we (or you) notice there has been a problem with the bank transactions or feed we may ask for copies at unusual intervals

How do you upload your statements for us?

You will receive an email from us that looks something like the email on the right.
To upload your bank statements, you need to click on “manage checklist”. The next page will ask you to input your PIN. If this is the first time you have done this process then you will be asked to create one. If you have forgotten it, there is a link underneath to reset it.

You will then be taken to your checklist where you can upload your statements. You will also be able to see the due date, exactly what we need from you, and be able to send us a message using the comment function. There is no “submit” button, but once everything is uploaded we will be able to access it at our end and will be notified that you have uploaded your statements.
The system we use is called Karbon and it is completely cyber-secure and GDPR compliant so you do not need to worry about your information.

What happens if the bank balance in your software does not agree to your bank statements?

If we complete your bookkeeping we will identify and correct any bank issues as part of our service at no extra charge.
If you complete your own bookkeeping we will help you identify the difference. We can complete any corrections for you for a fee (on request), or alternatively you can complete the corrections yourself. If you complete your own bookkeeping we would advise you check the bank balances in your software to the bank statements weekly ideally or monthly at the latest to make sure any error are picked up in good time. If you need any help with this or are struggling with your bookkeeping please get in touch.

7 Ways an Accountant Can Save You Money

Posted on January 6, 2022 | by admin

In today’s competitive business world, it is not uncommon for people to do their own bookkeeping and accounting. There are many reasons why this is done – the most common being that you can save money doing so. Of course, saving a couple of hundred pounds is an enticing prospect, but there are actually many more ways in which hiring the services of one will help you make money instead. Here are 7 ways an accountant can save you money:

1) They free up your time

Time IS money, so the more time you free up doing your bookkeeping, taxes, and financial statements, the more time you can dedicate to the tasks that will actually generate money for your business.

Not to mention that it will take you a lot longer to do all your finances than a professional anyway. Why would you waste your time when you could be doing what you do best and what you actually enjoy?

2) They help you be more tax-efficient

Accountants can help you save money by being more tax-efficient. This means claiming what you can, obtaining loans if you are entitled to financial support, and maximising the tax deductions you are entitled to.

3) They help you avoid fines and penalties

You need to file your taxes correctly and you need to do this on time. With legislation changing all the time, this isn’t easy, and you could be leaving yourself vulnerable to penalties and charges, simply because you didn’t know.

By hiring an accountant, you can always be reassured that you’re filing on time and that your taxes are correct. You can have peace of mind that you won’t get a surprise letter from HMRC and you don’t even have to deal with them at all if you don’t want to.

4) They identify opportunities for growth

Accountants keep your records up-to-date so you will always know the figures of your business. At a glance, you’ll be able to see how you’re performing, what’s coming in and what’s going out, and also your liquidity.

There is power in data! For example, your accountant can help you ascertain how long you could survive if there was a recession, where you can cut down expenses to save money, and where you should be delegating most of your budget if you want to grow.

5) They assist in gaining funding

It takes a lot of time to secure financing from banks and as we said previously, time is money. Your accountant can help you secure loans and financing really easily from creating a business plan and helping you budget to applying and assisting you in the loan process.

6) They advise on investments

If you’re interested in investing, an accountant can help you understand different investment options. From stocks and money markets to real estate and investment vehicles, they can show you how you can grow your money and which opportunities are the best for you and your business.

7) They offer invaluable business advice

As well as accountancy, accountants can offer business guidance to help you increase your chances of success. They can help you build a business from the ground up; they can help you with goal setting and planning, budgeting and forecasting, and pricing to increase your profit margin. This isn’t even everything that’s included in their advisory services so make sure to take advantage of their knowledge.

Spend money to make money

While you can save a couple of hundred pounds doing your own books, you won’t save as much with an accountant and you could actually end up losing a lot more. With an accountant on your team, you can save both time and money while having the reassurance and peace of mind that you’re making sound business decisions for your future.

10 tactics to make sure your invoices get paid.

Posted on January 6, 2022 | by admin

Wouldn’t life be simple if you could guarantee that your invoice would get paid on time every time? Sadly, this isn’t always the reality. With the economy coming out of recession, there is a very clear and present danger that your business invoices may not get paid in a timely fashion. Here are our best tips for getting your invoices paid:

1 . Invoice promptly

The longer you take to invoice someone, the more likely the bill won’t get paid. Of course, no invoice normally means no payment… Do you remember the early days of running your business? When you were amazed that some business owners got lax with their billing? Then, you get busy servicing your customers and clients and the admin slips. Before you know it, you become that business owner who has become slow to invoice.

If you are finding that you are getting behind on your admin, then give us a call. We can take care of your bookkeeping and other financial processes to leave you free to run your business.

Cloud accounting software such as Xero, include the feature to do recurring invoices. So, where you have a regular repeating invoice for the same amount with a customer, use this recurring invoice feature to cut down the chance of missing an invoice.

2 .No billing surprises

The more unexpected a bill, the more likely it won’t get paid. If a project is going to occur some extra expense or cost, always talk to the client or customer promptly about it. If you just crack on with it and don’t tell the customer about the unexpected cost coming their way, you risk getting into a payment dispute.

Before you bill someone, always make sure that:

They are aware and expecting the bill
They have agreed to pay the bill

3. Set up a Direct Debit or payment mandate for your customers and clients

If you have regular customers, getting a direct debit mandate signed from them is a great way to be more in control of when they pay you. GoCardless is an inexpensive direct debit solution that integrates well with the likes of Xero. Our team can help you set up Direct Debit for your customers.

4. Make it easy to pay your invoice

This is such a simple one but easily missed. Make sure you are removing any barriers to pay your bill. Such as:

Including a ‘pay now’ button linked to a payment gateway on your invoices. For example, Xero will do this for you with your Stripe account. Some customers may be happy for you to type in their card details over the phone using this option.
If you visit the customer on-site, then have the means to take payment whilst you are on site. E.g. with a card machine. Technology is such that you can easily connect a gadget or download an app to your phone to take card payments. No need for an expensive and bulky card terminal.
Including your bank details on the invoice. (You will be surprised how many businesses and tradespeople don’t do this).
Offer your customers the option to do a bank transfer, set up a direct debit or pay by credit card. If possible, try to avoid offering the option to pay by cheque as getting to the bank can take time.

5. Ask for payment before you start working for the customer or client

There is no rule saying you can only invoice after you start work for a client. In fact, we will ask for payment upfront for some of our services, such as a client wanting a one-off tax return. If you (or your customers) are not happy with a 100% upfront payment, why not ask for a deposit to get the work started?

6. Build a relationship with the accounts payable team at your customer

It always helps to be nice to the person at your customer’s business who actually pays your bill. The stronger the relationship you have with them, the more chance your invoice gets paid promptly and without being ‘delayed’. This may not be your direct contact. It could be someone in their finance or accounts payable team. So, who in the customer’s organisation is responsible for accounts payable? Can you get their name and contact details to help ‘ease the way for your invoice to be paid’?

7. Understand your customers’ accounts payable process

Do you need a PO number on your invoice? How does the invoice need to be addressed and who too? What needs to be on the invoice for it to be paid promptly? Who at your customer’s organisation needs to sign off the invoice before it will be paid? Who in the customer’s organisation is responsible for accounts payable? And can you get their name and contact details to help ‘ease the way for your invoice to be paid’?

When a finance department is preserving cash for a business, they will reject an invoice for payment for the smallest reason.

8. Put in place a process for unpaid invoices

For example, this could include a series of communications when the invoice is issued. Then a call or email the day before the invoice is due to see when it is going to be paid. Then a series of calls or emails a number of days and weeks after the invoice is due to be paid.

Most accounting systems such as Xero will have a feature for automated reminders for invoices. If you need more than the basic invoice chasing that this software will provide, consider using a more sophisticated credit control tool such as Chaser.

9. Consider offering a payment plan for customers who have built up a large unpaid debt

Most customers want to pay your bill. But sometimes stuff gets in the way. So consider offering a payment plan. Getting paid over 6 months in instalments is better than not getting paid at all.

10. Stop work if your invoices don’t get paid

We see this regularly. Where a business owner carries on working for a customer in the hope that the invoices will get paid eventually. The debts pile up and may never get paid. You’ll be surprised how quickly your unpaid invoices may get paid if you stop working for a client.

What is a Confirmation Statement?

Posted on November 12, 2021 | by admin

Have you heard your accountant talking about your confirmation statement and been puzzled by what it is? Are you wondering about who needs to file one, when, or how?

Wonder no more! We have all the answers for you. Read on below…

What is a confirmation statement?

A confirmation statement is a yearly statement that is sent to companies house to confirm that all the information they hold about the company is correct and up to date.

This video from the government’s website contains a good overview.

Who needs to file a confirmation statement?

Every Limited Company or Limited Liability Partnership (LLP) needs to file a confirmation statement, even if they are dormant or non-trading. Sole traders and companies that have been officially struck off do not need to file a confirmation statement.

When is my confirmation statement due?

Your confirmation statement is due annually, usually around the same time as your company incorporation date. When you register a company, your 12 month review period starts. Your first confirmation statement will usually be due 14 days after the end of this 12 month review period.

You can file a confirmation statement early, if you have had some changes to the company for example. When you do this, you will start a new 12 month review period and the next confirmation statement wont be due for another 12 months.

You can check when your confirmation statement is due by searching for your company on the companies house register.

What happens if I don’t file my confirmation statement?

You will not receive a fine for missing your filing deadline, however if you do not file your statement within 14 days of the end of your review period, your company and its officers may be prosecuted. Your company can also be struck off the register for failing to file a confirmation statement.

How do I file my confirmation statement?

In order to file your confirmation statement you will need your company authentication code and your login to companies house. The government’s website has more information.

There is good news for all 1 Accounts clients however as this is included in all of our service packages! We will need to confirm with you that no details have changed (we may know this already) and you will receive an email from us once it has been filed and accepted by companies house.

What information needs to be updated?

We will have to confirm the below details are still correct before we file so we may contact you to make sure there have been no changes that you haven’t told us about. However, if you do make a change, please make sure you tell us!

We will need to confirm the following details before we file your confirmation statement

Company directors and shareholders are the same
People with significant control are the same
Company’s registered office is the same

You can also update the following information at the same time as filing your confirmation statement:

Standard Industrial Classification (SIC) code
Statement of capital
Trading status of shares
Exemption from keeping a PSC register
Shareholder information

What if nothing has changed?

If none of your company information has changed then a confirmation statement saying that nothing has changed still needs to be filed so Companies House know the information they have is still correct.

If you have any questions regarding confirmation statements please let us know! We aim to make this process as easy and stress free for our clients as possible.

How to build your business (not your workload)

Posted on June 10, 2021 | by admin

If you want to build your business (not your workload) and you want to spend time on doing the things that will actually grow your business, you need to stop being a ‘busy fool.’ This means no more firefighting through the days and spending most of your time doing things that don’t contribute to your overall goal.

To build your business, you need to take control of your time and use it wisely. Here’s how.

Invest in the right workflow tools

There are bound to be inefficiencies in your existing processes, so identify them. Where are the bottlenecks in your processes? Can you automate any manual tasks?

One of the best ways to start working slicker is to invest in the right workflow tools. They can make management, collaboration, tracking progress, and daily operations so much more efficient.

Prioritise high-value work

To stop spending so much time on unnecessary tasks, start prioritising effectively. Use the Urgent Important Matrix to do this.

Group your tasks into 4 quadrants:

Q1: Urgent and important – these are emergencies that arise (e.g. missed deadlines, complaints, technical failures, pressing problems etc).
Q2: Important but not urgent – these are the tasks you need to do to grow your business (e.g. goal setting, growth planning, networking, self-development, business development etc).
Q3: Urgent but not important – these tend to be interruptions that take up the majority of your time (e.g. phones, texts, emails, unproductive meetings and reports etc).
Q4: Not urgent and not important – these are distractions that cause you to procrastinate and have no value to your business (e.g. personal phone calls, social media, excessive or irrelevant emails etc).

Once you’ve grouped your tasks, you will know what you need to focus on and what you need to avoid.

Delegate low-value work

Now you have identified tasks that need to be done, delegate the low-value work to your team so that you can focus on the ones that require your level of skill.

If you delegate effectively (i.e. delegating authority as well as tasks), you can be reassured that the day-to-running is ticking along while you’re focusing on the tasks that will grow the business.

Schedule time in the diary for business development activities

You need to invest more time in quadrant 2, doing the planning and budgeting and development activities that will grow your business. You know this, but if you don’t schedule it into your diary, it won’t get done.

If you prioritise these tasks and delegate the rest, you will have time to sit down and focus on them. You just need to find the best days and times where you can work productively and without any interruptions.

Build your business

It really is as simple as that. To build your business, not your workload, you need to follow these 4 steps. When you do these consistently, you’ll find that each day follows a much calmer formula:

DO – those important tasks that need to be done today.
SCHEDULE – the important but not so urgent tasks, so that they will get done.
DELEGATE – the urgent but not so important tasks.
AVOID – the non-urgent, non-important tasks.

Can anyone get a tax enquiry?

Posted on June 4, 2021 | by admin

Each year HM Revenue & Customs (HMRC) undertake an enormous number of tax enquiries into individuals and businesses to check they have paid the right amount of tax. Since 2010 HMRC have strengthened their approach to enquiry work by using wider powers and sophisticated software and consequently a record £36.9 billion of additional tax revenue in 2019/20 up £2.4 billion on the previous year.

Moving forwards we expect to see an even greater increase in the number of tax enquiries as HMRC look to revoke the enormous £350bn government spend through the Covid-19 pandemic, as well as ensuring that measures put in place to support the economy through this period have been utilised correctly by taxpayers.

Tax enquiries can last for months, even years and defending you against HMRC’s detailed questions requires specific expertise and can be time consuming and costly. Indeed the cost of dealing with an enquiry can amount to thousands of pounds, even if no extra tax is payable.

But no need to panic….

All of our 1 Accounts monthly fixed fee services cover the additional professional costs of handling tax enquiries and compliance checks this is through our Tax Fee Protection Service. This is so our clients never have to worry that they will get a huge unexpected bill if HMRC decide to investigate.

As an additional benefit this protection also provides our clients with complementary telephone access to employment, health & safety and general legal advisors, including support from employers with any adjustments made in response to the Covid-19 pandemic.

15 things you didn’t know an accountant could do

Posted on March 26, 2021 | by admin

When asked “What does an accountant do?” many people answer with accounts, tax or compliance work. While that’s true, what many don’t know, is that the good ones do so much more. The best accountants will become a part of your team; they will give you strategic advice to save money and boost revenue, they will help you work more efficiently, and they will not only help you plan for your future, but they will help you get there.

To better answer the question, “What does an accountant do?” here is a taster of what they offer to you and your business.

Things an accountant can do…

Launch a start-up

You need to know that your idea will make money and may potentially need to convince investors of the same thing. An accountant can do that for you plus work out your start-up and operating costs and create credible revenue forecasts.

Manage your cash flow

Getting a stable and consistent cash flow is every business owner’s dream. An accountant can make sure that you always have the money there to pay staff and suppliers, as well as cash reserves in case of an emergency.

Help make you more tax-efficient

Everyone knows that an accountant can help you complete and submit your returns at the end of the tax year. What many don’t know is that they can also help you to lower your tax ethically as well as helping you deal with old tax debts and making sure your books are watertight if you’re audited.

Manage your debt

What loan should you choose? Should you use spare cash to pay back loans or reinvest in the business? An accountant can help you develop a specific strategy to manage debt in a way that is best for your business.

Chase unpaid invoices

An accountant takes the ‘chasing money’ headache away from you by setting up an automated invoice system. When a payment is due or overdue, this will send out automatic reminders to your clients until they pay. Some accountants will even call clients who are very overdue with payments.

Improve your business strategy

Yes, your accountant can help you figure out where you want to go and what’s important. They will work with you to set realistic personal, professional, and financial goals, and then they will measure your progress to help you achieve them.

Budgeting and forecasting

Working off a vague set of numbers can result in irreparable damage to a business. With an accountant, you can work to an exact budget where you know exactly what is coming in and going out, and how much money you have to reinvest, and all in real-time. As well as having the figures at your fingertips, you will also know your figures that you’re aiming for and how long you could last in a crisis.

Writing and pitching loan applications

Applying for a loan is a tedious and difficult process, but not with an accountant. They can pull together your numbers to help you write a solid application, not to mention give you the forecasting figures that will win over any loan officer.

Help you with recruitment and payroll

Should you hire a full-time employee or outsource? Will your bottom line benefit more from a salesperson or a technician? Can you afford to hire and train a new employee? All these questions are important and should be handled with confidence. An accountant can help you make the best choices for you and your business and make payroll easy.

Set up your cloud accounting software

Accountants aren’t stuffy number crunchers who speak a different language, they are tech-savvy and future-driven. Using the best tools out there, good accountants can help you automate your business’s accounting so that you’re always on top of your finances wherever you are. As well as implementing this software in your business, they can also train you to use it confidently.

Help your business run more efficiently

In addition to accounting software, accountants can also help you unlock the power of other applications so that you can start working smarter, not harder. They can help you increase productivity with your invoicing, payroll, customer relationship management, staff scheduling and time-recording etc, and integrate all these tools together to create an effortless workflow.

Improve your inventory management

Many business owners don’t realise how much money is lost due to poor inventory management. What an accountant can do is help you identify the cost of holding inventory and how much revenue is lost, so you can start to place accurate (and cost-effective) orders.

Help you plan for the future

Do you want to sell your business in the future? Do you have a succession plan? Do you want to retire early? All these questions need to be addressed and planned for early on in your business journey. As well as helping you develop a plan for the future, an accountant will keep this larger goal in mind and will help you stay on track.

Listen and support you

A good accountant will become an essential part of your team. They will be your financial advisor for all aspects of your life and will be there to listen and support you whenever you need them (not just appear in your life at the end of the tax year).

Give you peace of mind

Your business, your finances, and the welfare of you and your family are probably the three most important things in your life. An accountant can help ease this pressure, giving you the reassurance and confidence that everything is being done or is planned for. The result? Peace of mind and being able to sleep soundly.

12 ways to increase profit margins (and thrive in business)

Posted on February 26, 2021 | by admin

Your profit margin is how much money you actually get to walk away with after a transaction is complete (revenue – costs = profit). It makes sense then, that businesses who want to grow, focus on increasing this margin. The bigger the margin you have, the more you will thrive and be able to power through challenges like the economic climate that we find ourselves in today.

So how do you do it? How do you increase your profit and master your margins?

Identify what is not working – before you can fix something, you need to know what’s broken. Take an objective look at your business and your processes and identify the gaps.
Streamline your processes – the faster you can provide a service, the faster you can generate revenue and increase your profit margin. Where can you speed up your processes to trim costs without impacting quality? I.e using cloud accounting software.
Discover any areas where there is waste – where does your business spend money? Are you losing money through inefficiency or waste? Can you reduce your expenses?
Market those higher-end services – what services sell best and deliver the highest profit? Prioritise these in your marketing and focus your efforts on pushing these more.
Aim for incremental growth – try not to get ahead of yourself. Set yourself small goals and you’ll find that you’ll make consistent, and more importantly, sustainable progress.
Focus on building your team – a happy, motivated, and productive team, one that supports your growth goals, can make a world of difference to your profit margin.
Be innovative in your strategy – if the pandemic has taught us anything, it’s how to strategically innovate our service. What are you not offering your target audience that they really need? What can you replace in the service that you’re offering now?
Cross-promote to increase your credibility – if you get a good response from running webinars or writing content, think about ways you can cross-promote with someone influential in certain topics. Not only does this increase your credibility, but it capitalises on the other person’s time, money, and resources too.
Identify other pillars for revenue – is there a service that brings in the majority of your revenue? If there is, try to see what other areas you can focus on to build another revenue-generating pillar. You don’t want your strategy to be dependent on a single pillar (what if that pillar fell down?). Your aim should be to strengthen another area or two and this will increase your margin too.
Create a loyalty programme with your clients – your clients know, like, and trust you, and they are your best advocates. They are your free sales team, so help them spend more with you and tell others about your services. How can you create a loyalty programme to reward them?
Raise your fees – if you haven’t had a rate increase recently, you have an easy way of increasing your profit! Just make sure to approach this right, conveying your increase in value rather than your profit margin.
Outsource certain tasks – a great way of increasing your profit margin is to outsource some lower-value tasks to freelancers or contracted workers. You can use them only when demand is high or part-time.

Is my accountant regulated?

Posted on December 7, 2020 | by admin

Would you trust your life to someone who was not a doctor?

Would you be defended in court without a qualified lawyer?

Of course not. Yet many businesses trust their livelihoods to unregulated accountants.

Why does being regulated make a difference?

To be regulated accountants have to be a member of a professional body. The main professional bodies are:

ICAEW
ACCA
CIMA
AAT

In order to practice as an accountant with a professional body, you have to have a practicing licence and hold professional indemnity insurance. You also have to do continued professional development. An unregulated accountant does not have to have any of this in place.

As a member of a professional body they will be regulated by law under the Proceeds of Crime Act Money Laundering Regulations (AML) with very strict rules to comply with.

How to check if your accountant is regulated.

When you sign up to an accountant, you will receive their terms of business (engagement letter). This will set out the basis of the contract between them and you. In that proposal there should be reference to their professional body and details of their AML procedures. If there aren’t, this should be your first red flag.

Questions to ask your accountant:

What professional body do you belong to?
Can I have a copy of your professional indemnity insurance?
What CPD do you do?

If the accountant isn’t regulated they HAVE to register with HMRC under the AML rules. This is the law. The link below will give you the details and allow you to check if your unregulated accountant is actually registered with HMRC.

https://www.gov.uk/guidance/money-laundering-regulations-supervised-business-register

Our experience

When taking on new business, we always request hand over information from the previous accountant. Normally this is relatively easy, however for one of our new clients it has been far from it. We have been shocked by the quality and correspondence from the previous accountant. After looking through all the information, we have found out that this particular accountant is unregulated. This ultimately meant, our client cannot report the accountants actions to their governing body. Leaving them with one option, legal action.

The client put their trust in this accountant and have been left with extremely messy books, which could result in more tax and potential fines.

Make sure your accountant is regulated, this way if something goes wrong your accountant has certain standards to adhere to, ensuring your finances are kept in order.