With redundancies increasing due to the recession, many people are turning to self-employment, a trend which has been seen particularly in the bookkeeping profession.
Being your own boss has various benefits, even though it can be a lot of hard work.
Dr Rebecca Harding, co-founder and managing director of Delta Economics, an independent research-led consultancy which promotes entrepreneurship, says for many people, self-employment is a chance for them to fulfil their dreams.
“It’s something that gives control over their budget, it gives control over the way they manage their work.
Certainly working from home is a liberation for people if they’re self-starters and they’re able to manage the process of motivating themselves,” she explains.
“Having that type of autonomy and being able to follow through, they’re the main motivators of entrepreneurs, even bigger motivators than making money,”Dr Harding concludes.
In the bookkeeping profession, the move to self-employment is a trend that emerged even before the economic downturn, according to Malcolm Trotter, chief executive of the International Association of Bookkeepers (IABs).
He explains that while the evidence of this remains anecdotal, it is a development that has been reported from various quarters, with bookkeeping identified as one of the top three new businesses started prior to the start of the recession.
Mr Trotter says that the demand exists for outsourced bookkeeping services, particularly among small and medium-sized businesses (SME’s), which usually do not have the in-house experience to manage their finances.
With the recession strengthening its grip on SME’s particularly, it is more important than ever that they monitor their money.
“They’re really becoming acutely aware of the need for better use of bookkeeping and financial information and also better control of things like debtors and creditors,” says Mr Trotter.
He adds that many of the IAB’s members have reported an upturn in the number of clients seeking their services. “Often when things are going swimmingly well, people are not aware of the need or that they can improve on their financial record keeping and the control of credit. It’s obviously something to focus on in a ‘needs-must’ situation,” Mr Trotter suggests.
When it comes to selecting a bookkeeping firm, many businesses go on recommendation.
However, they are also advised to check that the company or individual bookkeeper in question is appropriately qualified, experienced and has kept up-to-date with training.
“It’s important to make sure that someone’s got a qualification from an accredited body that they are themselves regulated, ideally by the government,” Mr Trotter explains.
In addition to ensuring they have appropriate experience, Keith Wymer, of Pitman Training in London’s High Holborn and Notting Hill, suggests that the type of qualification they have earned is also important.
“We meet a lot of people who have well-respected accounting qualifications but these are usually too high a level and too academic to enable them to carry out the real nuts and bolts of bookkeeping duties.”
“Many qualified professionals still need to come to Pitman Training to learn Sage Line 50 or even payroll, because while they understand the vocabulary and technique of bookkeeping, they don’t actually know what to do when they’re faced with a pile of invoices or when they need to complete a VAT return,” asserts Mr Wymer.
“I believe people wishing to set up as bookkeepers would be better advised to gain a highly-practical set of skills such as that offered by the Pitman Training Accounting Technician Diploma and underline their credibility by joining a recognised body such as the IAB.”
“That way they can really deliver for their clients,” he adds.
It is now law that people cannot offer bookkeeping services unless they are registered with an approved supervisory body such as the IAB, which means that undergoing training is absolutely essential.
“People have to prove that they’ve reached a certain standard and then from that point onwards they have to achieve a certain amount of continuing professional development and we monitor that,” Malcolm Trotter explains.
In addition, the IAB conducts further risk assessments on its members as part of the government’s crackdown on tax evasion and money laundering in the UK. The organisation is tasked with identifying those companies whose clients may be potential offenders and monitoring them to check everything remains above board, providing added reassurance for both members and those seeking bookkeeping services.