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Am I right in thinking that I could not take on a ltd company as a client and outsource the final accounts to an accountant. My ubderstanding from the website was that you couldn't outsource things because you're not qualified to do it.
Am I wrong?
Kris
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I am in the process of getting things together to apply for a practice licence. At present I am in full time employment with a LTD company doing bookkeeping up to Profit & Loss and Balance sheet, on a monthly basis for the company MD. (for the past 13 years). The company has its own Accountants who do the final accounts (adjustments) at the year end. Once I have my practice licence I intend to do what I am doing now on a part time basis taking on the company as a client. Under the practice licence will I be able to do this?
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Hi Anne
As an AICB you should not go beyond the TB. You should not be producing management accounts i.e. a P&L and a balance sheet for the client if you are working for them in a self employed capacity as your practice licence will not cover you for that.
I believe you would have to do the level 3 exams in order to do produce management accounts for your clients.
However managment accounts are not covered until level 4 on the sylabus so it does seem a bit confusing.
http://www.bookkeepers.org.uk/Membership/Joining_by_Examination
Here is a link which shows what can be done at each level of membership.
LKind regards
Stuart
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Hi Stuart,
I will apply that ruling to new clients. I thought as I have been doing it for the past 13years with the approval of the company accountant that I would be able to continue in the same capacity under the practice licence just for this client.
Regards
Anne
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Hi Anne
It is somthing you will need to speak to the ICB about.
The problem is not whether or not the accountant agrees with you doing it but what work you are allowed to do under the terms of your practice licence with the ICB.
There is a difference between working as a employee and subcontracting your services since you have ceased your employment and now subcontract to this company you should now be working with the terms of your own practice Licence as set out by the institute.
Kind regards
Stuart
Edited for spelling
Edited at 29 Sep 2011 01:47 PM GMT
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Thanks for that Stuart,
So I do not break my practice licence rules I will stay employed part time and build up my clients with the rest of the time I have left.
regards
Anne
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James @ ICBsaid:
“Hi Kris,
Grey area mostly depending on the insurance and terminology of existing ICB rules.
You cannot advertise services you cannot offer. This would mean you could not advertise this service, but you may still be able to under a joint advert with an accountant or something.
This rule is being looked into as members are starting to outsource things like Payroll to other members who are qualified.
If you invoice for the work you are responsible for it. Not an ICB rule but a general legal rule. So in the case any mistakes were made it becomes a bit messy in terms of the client would have to take you to court, for you in turn to take the accountant to court.
The second example has happened a few times, and it is not a nice place to be.
You could take on a Ltd as a client, complete the books to your level of cover, then hand them over for the accountant to complete them and invoice the client direct.
You could also advertise this using clear wording to explain the service you offer, and what would be billed via the accountant.
Perhaps any suggestions for the ICB council (meeting next week) on this subject could be posted here? ”
Hi James,
I would like to be able to offer the complete service, and subcontract the stuff I can;t do to an accountant. Like you say, this is really no different to a member outsourcing bookkeeping to another member because they are not qualified.
That way, the client would recieve one bill from me, and I would pay the accountant for their services.
While I understand that this would make me legally liable for the whole service and then require to chase a claim against the accountant I can't see how this is any different to anything else in the business world. Let me give you a couple of examples:
I got a new kitchen put in from Homebase recently. The fitters were not Homebase fitters, but subcontractors. When theings went wrong I complained to Homebase (as thats who my contract was with) they would then require to make it right and follow up the claim with the subcontractors.
Another example would be if I sold DVD players. I have no idea how to build a DVD player, but I buy them from a factory who does. When I sell them the contract is between me and the customer. If they have a problem I need to make it right, then seperately take it up with my supplier.
How are any of these any different to say teaming up with a qualified accountant and having them offer a white label service to my clients?
I'll be interested to see others views and how this develops. I genuinely don't think you can allow some things to be done like this (i.e. Payroll) without opening the flood gates. Surely also, the member who are already doing this with payroll are breaching the ICB rules already?
Kris
Edited at 29 Sep 2011 02:29 PM GMT
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James @ ICBsaid:
“Hi Kris,
I agree, and in general I think the rules need tweaking, but.. 
Insurance is a bit of a problem. You could add extra services to your premium, but the ICB would need to check this. As it advertises its members are fully insurred etc. Would not like a member to sub contract to some unqualified, uninsurred bookkeeper. Any claim in this instance could damage the reputation of all ICB members.
Advertising, the ICB could remove the rule that you cannot advertise what you are not covered for, but would this open the flood gates of members advertising everything, and carrying out work outside their scope? We get that problem now when they don't even advertise these services.
Would the ICB admin be required to check who is just offering services themselves, or if they are sub contracting? If so that would be an extra cost.
I guess perhaps the ICB should start taking the attitude that it is older and larger than it was when these rules were made. That 1 or 2 bad members is not going to destroy the good image. However, it does want to represent the industry, so I guess if it allowed members to be uninsurred for the work they invoice for, and relaxed its rules maybe this would contradict that aim?”
I also agree with what you say James, especially about members invoicing for work they are uninsured for. But surely that is happening already with the payroll you mentioned.
Regardless of how much the rules are relaxed someone will always push the boundaries.
It was just a thought.
Kris
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