With over £17bn spent on accounting services by UK businesses in 2016 (CCAB), becoming a self-employed accountant is a fairly low-risk and low-cost business venture, whilst also offering excellent earning potential and job satisfaction.
What is accountancy?
Accountancy is the centuries-old practice of interpreting and evaluating financial information. Accountants report on this data to help businesses better understand their financial health and make more informed strategic decisions.
Depending on your level of expertise, the duties of an accountant might involve:
Preparing forecasts and budgets and preparing solutions for any setbacks
Filing tax returns and month-end accounts
Staying up to date with financial laws, regulations and their impact
It’s crucial work. That’s why accountants play a major role in businesses of all shapes and sizes from high street independents to multi-national corporations.
Why become an accountant?
To many people, accountancy does not sound like the most exciting of careers, but in fact it is very rewarding. Accounting is a skill set that is always in-demand and is often said to be one of the few ‘recession-proof’ careers. As a career, it offers excellent job growth and earnings, with an average salary of approx. £62,000 (Accountancy Age). Many CEOs, in fact, come from an accountancy background. There is also the option to offer your own services as a self-employed accountant or as a freelancer.
One of the great things is the variety of businesses that you’ll work with and the active role you’ll play in guiding important decisions, working at the heart of a business. Regardless of the industry, you can guarantee there’s an accountant offering their insights in some way.
What skills do I need to become an accountant?
Whilst being good with numbers is useful, accountants today play a huge role in shaping decisions across the board – not just reporting on financial data. If you’re not sure if you are suited for this career, here is a list of some of the key skills you need:
Numeracy skills – being good at maths is definitely a positive though not essential
Attention to detail – accountants cannot afford to simply gloss over the facts. Errors too can have a major impact both in the short and long term.
A keen interest in the mechanics of business.
Communication skills – as you need to explain potentially complex information to their clients on a regular basis.
Organisation – the biggest part of this role is maintaining accurate record keeping, and so you will have to make sure everything is in order, tasks are prioritised and you are on top of all your work.
Finally, some technology skills are beneficial. The advance of AI and cloud technology are two major changes to the profession in recent years and may mean less time is spent on the more mundane data-entry tasks going forward. This is likely to mean accountants bring to the role more of an emphasis on client-relationships and all-around business planning.
There are a number of ways to train as an accountant. One of the most popular routes is through the globally recognised AAT accounting qualifications. With no entry requirements, AAT is a good starting point if you’ve no prior accounting skills or finance experience and offers progression opportunities, as well as professional membership, once you’re fully qualified. You can also become an AAT Licensed Accountant which means you’ll be able to offer your own self-employed services.
Another route into an accountancy career is through the higher-level qualifications awarded by the UK chartered accountancy bodies:
Associate Chartered Certified Accountant (ACCA ) – can be taken either independently or as part as of a training agreement. This qualification will open up so many different career options for you, such as working within private or public sectors, accountancy firms or even becoming self-employed.
Associate Chartered Accountant (ACA) – awarded from the Institute of Chartered Accountants in England & Wales ( ICAEW ) and is recognised globally as one of the most professional business development programmes available. To start this qualification, you’ll need to enter a training agreement with an employer, thus completing the course within five years plus taking on work experience.
Chartered Institute of Management Accountant (CIMA ) – focuses on business accounting. Like ACCA, you can train independently or with a training agreement, but you’ll also need to gain three year’s worth of work experience.
Typically, these bodies require prior accounting experience or qualifications (AAT recognised as one such route) in order to study with them. Once qualified, however, having chartered status will give you more scope in the services you can provide.
Finally, one increasingly popular route is to learn on the job through an apprenticeship programme. This has the advantage that your employer will cover some or all of your training fees and you’ll gain valuable work experience along the way.
Do I need a degree to become an accountant?
In short, no. You do not need to go to university to become an accountant although having a bachelor degree or a masters degree will definitely help.
However, many choose to take the more vocational route highlighted in the previous section rather than study for an accounting degree. Training with AAT, for example, is less expensive than paying university tuition fees, whilst being equally well recognised by businesses.
If you choose to train with AAT or one of the accounting qualifications offered by the chartered bodies, you’ll develop practical accountancy skills that will ensure you’re work-ready once you’ve qualified. So, having one of these qualifications on your CV will really boost your employability.
Do I need to choose a specialism?
Specialising in a specific area is one way you can mark yourself from the competition and bring added value to your business. Your specialism might be in a certain field of accounting (management accounting, forensic accounting, auditing, for example) or you might focus on bringing industry-specific expertise to the table. During your training, in most cases, you’ll be able to tailor your programme to match the real-world work you’re planning to undertake (or to back up your existing experience).
What costs are involved in becoming a self-employed accountant?
Firstly, there’s the cost of training. If we use AAT as an example, you’ll need to cover your tuition costs which are paid to your chosen training provider (i.e. your local college or a home study provider). These will vary depending on the provider itself but typically range from £600 to £2,000 per level. Sometimes these will include AAT’s student membership fee and assessment costs but you’ll need to check.
Once you’ve completed your training and you’re looking to go self-employed, you will also need to get your licensed membership from AAT. This allows you to brand yourself as an AAT Licensed Accountant which will significantly enhance your proposition with prospective clients. This costs £289 a year plus a one-off admission fee of £50.
Professional indemnity insurance is a key policy for anyone running an accountancy business. This protects you if any claims are made against you as a result of advice or work you’ve completed. You’ll also want to look at other business insurance policies that may or may not be relevant depending on your setup i.e. whether you have premises or employ staff members.
To keep costs lower, you’ll probably want to explore whether you can run the business from home or, instead, find a coworking space. If you do decide to run the business from an office, you’ll need to factor in rent and maintenance costs, as well as business rates, all of which will vary depending on the space and location.
Firstly, you’ll need some kind of computer or laptop and the relevant IT security software. One of your key decisions will be choosing the right accounting software package for your needs. Some software providers offer basic packages for free and the prices will scale up depending on the features you require.
However, your salary will vary depending on the particular training pathway you take. Other factors, such as the size of your practice, and, of course, location, will also make a considerable difference.
Video: Nicola’s story
Nicola Donnelly is an AAT Licensed Accountant. Here’s the story of how she went from being an unemployed single mum to running her own accountancy business.