Accountancy and Book-keeping
Whether you want to work as an accountant or book-keeper yourself, or if you’re thinking of starting your own business and need to get more of an idea of what looking after your own finances involves, read on …
Accountancy is a career that offers variety, professional qualifications, the opportunity to work internationally and, potentially, a high salary. Many accountants go on to use their qualification to set up their own business or to move into general management. Accountants are more highly qualified than book-keepers (who may also be known as accounts/finance clerks), and will generally manage, interpret and advise on accounts, while book-keepers keep them (as their name suggests!). Accountants may also be licensed to carry out functions like auditing, and may specialise in a particular accounting area.
Book-keepers record financial transactions. In a large organisation book-keepers may work in a finance office with other staff, perhaps supporting senior finance professionals. Their duties are likely to include completing VAT returns, preparing accounts, keeping records of payments, invoices and receipts, checking bank statements, calculating wages and filing paperwork.
Skill up while serving
Each Service has its accountants and book-keepers, and many of them gain relevant professional qualifications while serving. However, many other Service people deal with accounts as part of their duties, too: supervisors of bars and messes, treasurers of sports and adventurous pursuits clubs, managers of non-public facilities and so on may be responsible for assets and cash that add up to a tidy sum. So, while you may not have formal training or letters after you name, you may certainly be involved – and experienced – in the field.
Accounting is a recognised and valued skill that can open the door to a number of second careers, either as a full-time occupation or combined with other responsibilities. If it’s something you are interested in, it can be mastered at a distance while you are working in an unrelated career, although some years of experience are usually required before you can become fully qualified.
WHERE TO FIND JOB VACANCIES
Several professional bodies (see below) regulate the training and work of accountants in the UK, but as a general rule qualifying as an accountant will involve three years of study, exams and relevant employment. Training for professional exams is provided by employers. Early responsibility and fast promotion are available if work and exam results are satisfactory.
The main professional bodies are described below. For details of others, please see ‘Useful info’.
Institute of Chartered Accountants in England and Wales
ICAEW members are employed in industry, finance, commerce and public practice. The range of professional activities carried out by chartered accountants includes auditing, financial reporting, taxation, personal finance, corporate finance, financial management and information technology. To become an ACA (Associate of the Institute of Chartered Accountants in England and Wales) you must complete a training contract, which will last between three and five years, pass ICAEW examinations, and complete specified work experience requirements. Full details can be found on the ICAEW website.
Chartered Institute of Public Finance and Accountancy
CIPFA specialises in accountancy and financial management in the public services. Chartered public finance accountants influence decisions through financial management; they also assess the financial viability of proposals that influence services in a changing environment. Find out about CIPFA’s Professional Qualification system on its website.
Association of Chartered Certified Accountants
ACCA is the world’s largest accountancy body. Its qualification can open up a career in financial or management accountancy. ACCA accountants work throughout the financial sector in public practice, financial services, the health service, industry, commerce and the public sector. Find details of its qualification scheme on its website.
Chartered Institute of Management Accountants
Chartered management accountants are professional accountants who apply their skills to enhance management decision making. They are able to give financial matters a commercial focus – equally important for the executive chairman of an international group or a junior project analyst. Find full details of CIMA’s management accounting qualification on its website. There is a requirement for entry-level qualifications like CIMA’s own certificate in business accounting or equivalent prior experience.
Association of Accounting Technicians
The AAT is the UK’s leading qualification and membership body for accounting staff. It awards around 90% of all vocational qualifications in accounting, providing a recognised qualification and membership body for accounting staff at technician level. It is sponsored by other accounting bodies, and successful AAT students are exempt elements of their qualifications. Accounting technicians work at all levels of finance, from accounts clerk to financial controller, in all industries and sectors, and in organisations large and small.
Institute of Financial Accountants
Financial accountants are employed in senior positions in industry, commerce and practice, taking an active role in the financial management of companies and operating mainly at board level. IFA membership is available at several levels; find full details on its website. It also offers a Diploma in IFRS (International Financial Reporting Standards) and other stand-alone qualifications.
International Association of Book-keepers
Many book-keepers are highly competent at accounting, and some are experts in specialist areas. They are the people who actually complete the books of accounts, providing financial support to other professionals. The IAB syllabus offers exemptions for holders of other accountancy awards. It offers a number of qualifications and many of its exams lead in to higher-level qualifications with other accounting bodies.
Association of International Accountants
The AIA is a UK statutorily recognised qualifying body for auditors. It promotes and supports the advancement of the accountancy profession both in the UK and internationally. The AIA Professional Accountancy Qualification requires three years’ accountancy experience in addition to successful completion of a range of exams.
Use your ELC
Under the ELC scheme, a wide range of learning can be taken, provided it is offered by an approved provider listed on the ELC website and is at level 3 or above. For full details of how to make the most of your ELC, refer to the in-depth features on this website.
Employment in accountancy and book-keeping varies enormously, from finance director of a large multinational to part-time book-keeper working from home on the accounts of a few small local businesses. There are opportunities in public service and in private business, in public practice and in-house.
Accounting and book-keeping for business start-ups
Whether you’re thinking of embarking on self-employment or starting your own business, you’ll need to provide accurate accounting records to satisfy the tax authorities, says Clive Lewis of the ICAEW. ‘Legally,’ he says, ‘you have to keep accounting records for your business. This is so you can fill in your tax return and show the figures are right. Good records will help you to run your business more efficiently.’
Here we focus on accounting records needed to satisfy the tax authorities.
HMRC checks on tax returns
If HMRC has reason to suspect a self-assessment, Corporation Tax return or VAT return is incorrect, it will carry out a ‘compliance check’. After investigation, it may issue an assessment or amend the relevant return to collect any unpaid tax. You can ask for a review of, or appeal against, most of HMRC’s decisions, or ask for your appeal to be heard by an independent tribunal.
HMRC also carries out checks on how businesses keep their records. Initially, an HMRC representative might telephone you and ask questions to help establish whether you are keeping the business records you need to meet your legal responsibilities. They may arrange a suitable date and time for a visit to your premises. The consequence of a compliance check or ‘a business records check’ may be the business having to pay additional tax as well as facing penalties.
- For more information, click here
Records for Value Added Tax (VAT)
Every business registered for VAT is required to maintain financial records that comply with the guidelines provided by HMRC.
- For more information, click here
Records for employers
HMRC requires every business that employs staff to keep proper records for Pay As You Earn (PAYE) and for the calculation of tax liabilities. With the introduction of Real Time Information (RTI), employers must advise HMRC of their payroll at the same time as making payment to employees.?
- For more information, click here
Limited company accounts
It is a requirement of the Companies Act that every company should keep proper accounting records of money received and paid, of all sales and purchases, and of assets and liabilities.
For more information, click here
Clive Lewis, in conjunction with X-Forces Enterprise, has contributed a series of features to QUEST, under the title ‘Preparing for business’, highlighting all you’ll need to know about starting and running your own business. To find them, visit our website and enter ‘clive lewis’ in the search box.
To find out more about self-employment, take a look at our in-depth feature, ‘Running your own business’, here