Is it time for a small business accounting certificate?
If you’ve read my recent blogs, you’ll have seen that I’ve been keeping a close eye on all of the ongoing suggestions to make tax and accounting easier for small businesses.
Over the past few weeks, there’s been proposals from the EU and Office of Tax Simplification to make tax rules easier for micro businesses to deal with, as well as a recent call from the Federation of Small Businesses for a dedicated UK agency to be created to promote the interests of the country’s small business sector.
It’s interesting stuff all right - and if the government actually decides to implement any of these proposals, it could have a hugely positive impact on small businesses across the UK.
But these proposals have also got me thinking about the role that accountants can play for the small business sector - and how important it is for accounting institutes to bring in an additional certificate for accountants who specialise in helping small businesses.
At the moment, the main accounting qualifications (ACA / ACCA / CIMA) cover mainly the needs of larger businesses. And although I completed my accounting exams 9 years ago, I haven't actually done a net present value calculation since then.
Also, certainly when I qualified, the examination syllabus did not cover issues that are really important for accountants who are working with the smallest businesses.
For example, you may think it incredible that trainee accountants aren’t taught to fill in tax returns or VAT returns, but this is what actually happens. Before I could complete my parents’ tax returns I had to take a crash course from my then-colleagues in the tax department of the practice where I worked.
It was also at work that I learnt the art of explaining accounts and tax to clients in plain English. In professional exams your answers are written as if to a colleague, so using accounting-speak and quoting accounting standards is the order of the day. No small business owner would - or should need to - understand what on earth FRS15 is, for example.
And as for teaching clients how to keep their records, or helping clients decide whether they want to keep their own books or have the accountant do it for them, or helping clients to choose an accounting system that really works for them - none of these are anywhere to be seen in the exams.
Accounting exams are aimed at both accountants working in practice or in business, but an optional paper on running an accountancy practice and setting prices for different services would also be very helpful. There is huge debate within the accountancy profession around issues such as fixed fees versus billing by the hour, the efficacy or otherwise of completing timesheets, and other similar matters. Many candidates in the practice arena will progress to partner level or run their own practices, and this knowledge would help them enormously.
My recommendation is not to introduce a completely separate qualification for accountants working in small businesses, as this could be seen as the “poor relation” by accountants who choose to take the large business qualification.
Instead, what I would like to see is an additional post-qualification certificate in small business accounting, similar to the ICAEW’s certificates in insolvency and corporate finance.
I believe that this would offer reassurance to small business owners that their accountants have specialist knowledge of the specific areas of difficulty they face and can provide real proactive help and guidance to them.
- Video: an introduction to VAT by HMRC
- You deserve better: why you need to break up with your spreadsheet
- Simple ways to save yourself future Self Assessment stress
- Making Tax Digital consultation response published
- Not feeling (a) fine? You might have a ‘reasonable excuse’ for not completing your tax return