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Everything you needed to know about Scottish accountancy apprenticeships

The theme of this year’s Scottish Apprenticeship Week (1-5 March) is ‘Business Backing Talent’. If there ever was a time that Scottish firms could help support the prospects of young people – the social group most likely to be hardest hit by the economic fallout of Covid-19 – then it’s clearly 2021. 

Apprenticeships are not all about companies philanthropically giving youngsters a leg-up into the workplace; these new-starters can contribute just as much to the businesses employing them. Not only can they play a key role in post-Covid-recovery roadmaps for businesses, but they can also boost productivity, bring new ideas and make loyal employees. What’s more, with the Scottish Government funding a large chunk of their training costs, they’re extremely affordable too.  

Today, Scottish employers take on 29,000 apprentices every year, which includes many starting out in their accountancy careers. As we’ll find out here, they can bring many benefits… 

How can an accounting apprentice benefit my company?

  • They’re productive

Three-quarters (75%) of Scottish businesses who have hired apprentices believe their new learners have boosted productivity. Dylan White, partnership & delivery manager at Skills Development Scotland, believes this is because “apprentices don’t cost organisations much in terms of time and money, plus because they’re learning on-the-job, they’re constantly using these skills in the workplace.”

Organisations can also place existing employees onto an apprenticeship, giving them the opportunity to learn new skills and acquire formal accounting qualifications.

  • They’re cost-effective

If you hire a modern apprentice, Skills Development Scotland (SDS) will contribute towards their training costs. You won’t pay anything at all if you support foundation apprentices. For more on funding, scroll below.

  • They can increase staff retention rates

Apprentices are staunchly loyal: 90% of them remain in their workplace after finishing their apprenticeship, while 80% of companies running schemes report a rise in staff retention. The reason behind this is simple, says White: “For many apprentices, it’s their first real experience of a workplace. If you’re an employer who takes care of their development, they’ll make a commitment to you too. Quite often [apprentices say]: ‘why would I want to work anywhere else?’”

  • They’ll make your team more dynamic

“Many Scottish companies face the challenge of an aging workforce, which is a real business concern,” says White. “Bringing in apprentices introduces new ideas and ways of thinking. Many businesses have opened up new customer bases because employing apprentices helps them understand younger people better, therefore helping them connect with different customers.” Indeed, 72% of Scottish businesses report staff morale has been boosted since apprentices have joined their team.

  • They can boost the development of other employees

Existing employees can develop leadership skills by mentoring or supervising modern apprentices. “If there’s somebody in the team who has the potential to become a manager, mentoring a foundation apprentice can help them develop those skills,” says White.

Who pays for apprentices?

If you support a foundation apprentice, there’ll be zero cost to you (the employer) as the apprentice will still be at school.

For a modern apprentice, you will have to pay a wage for your employer, which must be at least the national minimum wage or higher.

However, Skills Development Scotland will contribute towards the cost of training and assessing apprentices, with this payment usually paid directly to the learning provider. The amount you’ll receive depends on the type and level of apprenticeship, plus the age of the apprentice. For example, a SCQF Level 8 accounting apprentice aged 16-19 will receive £3,200 from SDS (with the company topping up the rest). Find out more on the SDS contribution table here.

Alternatively, businesses can choose to deliver apprenticeships internally (rather than using a learning provider). SDS will then send contribution payments directly to your company.

If your organisation’s annual salary bill is more than £3m, you will already be paying into the apprenticeship levy. This means you can apply for up to £15,000 towards the cost of training your workforce through the Scottish government’s Flexible Workforce Development Fund.

Other financial incentives available include:

Apprenticeship Employer Grant (AEG): this £15m grant was recently established to help support employers and young people affected by Covid-19. It will provide £5,000 for employers hiring or upskilling a 16-24-year-old (and those aged up to 29-years-old who are disabled, care-leavers or from a minority ethnic group) or £3,500 for employers hiring or upskilling apprentices over 25-years-old. More info here.

Adopt an Apprentice: if you hire an apprentice who’s recently been made redundant, you will receive £5,000 to help cover wage and recruitment costs.

Access to Work: If you hire an apprentice who has a disability, or a long-term physical or mental health condition, you will receive financial assistance for equipment, software and travel costs (taxis etc).

What apprenticeship is right for my firm?

In Scotland, AAT accounting apprenticeships are available in two different qualification levels: Foundation and Modern.

Foundation Apprenticeship in Accountancy (FA)

Age range: 16-18-year-olds attending school.

Duration: One-two years depending on the school/college

How it works: The apprentice takes their FA alongside other school subjects, usually their Highers. During the FA, each pupil completes a work placement of one day a week in the Sixth Year (S6) to help complete units from the AAT Award.

Accountancy skills learned: preparing management accounting information; advanced bookkeeping; analysing accountant information; final accounts preparation; preparing financial accounting information; indirect tax; recording data in the ledger; professional ethics.

Qualifications earned: AAT Advanced Certificate in Bookkeeping

Core skills learned: communication, problem-solving, information and communication technology, numeracy (all SCQF Level 4).

Cost: None. The learner is still at school, so the only commitment from employers is your time.

Why consider a foundation apprentices for your firm: Upon finishing the apprenticeship, students will be equipped with the skills and knowledge to enter the workplace as a trainee accountancy technician. “Many businesses support the foundation apprenticeship to identify potential recruits for modern apprenticeships,” says White . It’s also a brilliant way to support your local community too.

Note: You can’t hire a foundation apprentice because they’re still at school. However, you may recruit them after they’ve left.

Modern Apprenticeship in Accountancy (MA)

Age range: 16+

Duration: 9-12 months

How it works and skills learned:

The MA is available at three levels:  

Level 2

Skills learned: bookkeeping controls and transactions; elements of costing; using accounting software.

Qualifications earned: AAT Foundation Certificate in Accounting

Jobs for Level 2 modern apprentices: accounts administrator; accounts assistant; accounts payable clerk; purchase/sales ledger clerk; trainee accounting technician; trainee finance assistant.

Level 3

Skills learned: advanced bookkeeping; final accounts preparation; management accounting: costing; indirect tax; ethics for accountants; spreadsheets.

Qualifications earned: AAT Advanced Diploma in Accounting

Jobs for Level 3 modern apprentices: accounts assistant; accounts payable and expenses supervisor; accounts payable clerk; assistant accountant; audit trainee; bookkeeper; credit controller; finance assistant; payroll administrator; payroll supervisor; practice bookkeeper; tax assistant.

Level 4

Skills learned: management accounting principles such as budgeting and decision & control; preparing financial statements of limited companies; accounting systems and controls. MAs also have the option to study business tax, personal tax, external auditing, cash and treasury management or credit management.

Qualifications earned: AAT Professional Diploma in Accounting

Jobs for Level 4 modern apprentices: accounts payableand expenses supervisor; assistant financial accountant; commercial analyst; cost accountant; fixed asset accountant; indirect tax manager; payments and billing manager; payroll manager; senior bookkeeper; senior finance officer; senior fund accountant; senior insolvency administrator; tax supervisor; VAT accountant.

Cost: You will have to pay the MA’s wages (which must be at the minimum living wage or above), plus any employment costs and equipment. However, the Scottish government (through SDS) will contribute towards training costs.

Why consider a modern apprentice for your firm: A modern apprenticeship gives students industry-recognised qualifications, as well as equipping them with workplace-ready accounting skills.

Case study: Edinburgh-based Zen Consultants

“Apprentices have been an absolute blessing for my business”

Saj Sharif is founder/CEO at Edinburgh-based Zen Consultants. Here, she tells us how hiring apprentices has helped double her team…  

“A couple of years ago, I found myself in a tricky situation many business-leaders might recognise. The client base at Zen Consultants, the practice I founded in 2006, was suddenly growing. However, I didn’t have enough employees to deal with this increased workload.

So I started hiring, of course. Yet, many of these hires struggled to fit in with Zen’s business culture; some failed to pass the probation period. I was confused: why weren’t these experienced people fitting in? 

A business associate suggested that I hire an apprentice. At the time I assumed apprenticeships were for people who wanted to work in construction, not accountancy. However, after doing some research, it dawned on me that apprentices would give me the chance to handpick the young recruits I wanted. Not only would have a clean slate, but they could be trained in the culture of the firm.

Today, apprentices make up half my six-strong team at Zen. Since I first took on my fist member of staff in December 2015 (who’s now being upskilled on the Modern Apprenticeship), the business growth has been unbelievable: we’ve more than doubled our client portfolio.

Along the way, I’ve discovered apprentices are incredibly energetic and motivated. Their fresh minds bring some wonderful ideas into the firm; I’ve constantly been surprised about how switched-on and sharp they are. It helps keep our working environment young.

I’m now running a 10-week online programme for foundation apprentices, who work with me online every Thursday afternoon. I’m planning on recruiting one of them once they finish their education, before training them as a modern apprentice.  

If you run a practice or head a finance team, supporting foundation apprentices puts you in an advantageous position. Because I’m getting to know these students over a 10-week period, I’m getting a beautiful insight into their personalities (plus who hands the work in!), which will help with the recruitment process. The online programme uses a mock template for interim accounts, which was designed by our 18-year old modern apprentice at Zen: proof of how valuable apprentices are!

I’m such a big champion for apprenticeships (I’ve even persuaded my teenage daughter to pursue a filmmaking apprenticeship). They’ve been an absolute blessing for my business.”

Getting started

As an independent body, AAT can help you decide on the right apprenticeship for your business.

Get in touch with AAT’s employer team now and get your free employer guide to learn how an apprenticeship could benefit your business.

Christian Koch is an award-winning journalist/editor who has written for the Evening Standard, Sunday Times, Guardian, Telegraph, The Independent, Q, The Face and Metro. He's also written about business for Accounting Technician, 20 and Director, where he is contributing editor.

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