14 ways employers can prioritise students’ mental health

Posted by & filed under Apprenticeships, Employer newsletter.

Students face unprecedented mental health pressures– so employers need to do all they can to help.

From taking your apprentice for a walk in the park to using more pauses in conversations, here are some expert tips on de-stressing your trainee workforce and creating greater wellbeing in the workplace…

For the trainees and apprentices who have entered the workplace (remotely or otherwise) since 2020, the pandemic has had an incalculable impact on their professional lives, from a lack of soft skills to videoconferencing becoming a regular part of their working week. Perhaps one of the longest-lasting legacies, however, is the toll it’s taken on their mental wellbeing.

Supporting Gen C

Although this demographic (variously termed the ‘Covid generation’, ‘Gen C’ or the ‘Quaranteenies’) were the least likely group to suffer the physical ill-effects of Covid, they disproportionately bear the psychological scars after suffering the biggest educational disruption since World War II and a lack of in-person socialisation during lockdowns. Earlier this year, a study of 13,000 respondents from the Sutton Trust and University College London found that happiness and confidence among young people in the UK had sunk to an all-time low , also draining them of the motivation to study.

Anxiety over global events is hardly helping matters, either. “For these guys, there’s a constant cycle of negativity ranging from conflicts in the Middle East/Ukraine to the climate crisis,” says Ben Bullman, client director and lead safeguarding officer at training provider First Intuition. “Combine that with exam anxiety and the pressures of starting their first full-time job such as the mental and physical exhaustion – which is new to them – and it’s not hard to see how it creates a perfect storm of stresses upon their mental wellbeing.”

Accountancy in danger of burn-out

The profession these new recruits are entering doesn’t fare much better when it comes to mental health: a study by caba (ICAEW’s wellbeing charity) last year found 56% of accountants surveyed said they were suffering with stress and burnout compared with 41% of employees from other sectors.

Despite this, there are signs today’s young trainees/generations are more open about their mental health than previous generations, who viewed sharing such concerns as taboo. They’re also cognisant of how professional stress and overworking can detriment their health, so are increasingly expecting employers to provide ‘mental health days’ (something that 82% of Gen Z-ers want according to 2022 research by workplace training company TalentLMS), counselling and even wellness rooms. “It’s very positive; rather than struggling on if they’re ill, they embrace the things [employers] put in place to help them,” says Claire Hill, head of people operations & recruitment at accountancy firm PKF Francis Clark (recently named one of the UK’s best workplaces for wellbeing by Great Place to Work).

With poor mental health causing 6m sick days in the UK last year, costing the UK economy £105.2bn a year, it’s clear looking after the mental health of staff helps boost business too (introducing policies addressing workplace wellbeing can increase productivity by as much as 12% according to the Mental Health Foundation charity).

Here, three experts from leading organisations share their tips on the steps employers can implement to improve the mental wellbeing of their young trainees/apprentices…

1. Don’t take a tick-box approach

Bullman, First Intuition: “One of the biggest mistakes employers make is asking trainees closed questions [about their mental health], knowing they’ll get a short answer. This enables the boss to tick a box and move on. Employers should be listening non-judgementally and create a feeling of ‘safety’ so trainees feel free to open up.”

2. Offer flexibility around studying

Bullman, First Intuition: “This generation hasn’t had the best experience with exams – their GCSEs and A-Levels during Covid were assessed grades [instead of exams]. The experience of on-demand assessments, which take place in a physical venue, will be new to them. The binary pass/fail nature of professional exams adds more pressure. As an apprentice, they feel accountable to employers if they fail exams. Support should be given for studying and resits. Also avoid careless language, such as telling them, ‘You don’t know you were born – exams were much easier in my day.”

Hill, PKF Francis Clark: “We’re noticing the pressure really hits trainees during the build-up to exams, with many suddenly struggling with workloads. Some students have so much anxiety, they’ve been unable to attend offsite premises for assessments. Meanwhile, failing exams has a massive impact on confidence. To tackle this, work closely with them to understand their needs. For example, ensuring they get information from any study sessions they’ve missed.”

Bullman, First Intuition: “Although it’s okay for employers to tell trainees, ‘This is just an exam: there are bigger things in life’, they also need to understand qualifications are hard work. If a trainee is anxious about an upcoming assessment, employers should gently put pressure on, perhaps explaining postponing exams will only worsen their mental health.”

3. Build ‘psychological safety’

Dan Harris, head of financial systems & processes, Devon County Council: “Thankfully the 1970s-style boss has long gone. As an employer today, try to make the workplace as welcoming for trainees/apprentices as possible. Ensure they feel as if they’ve got an important role to play within the team and the opportunity to speak up without judgment.”

4. Watch for early warning signs of stress

Hill, PKF Francis Clark: “When trainees start struggling with their mental health, we usually notice a change in their behaviour first: being late, making mistakes, not passing exams, increased sick days, or relationship difficulties with colleagues… Realise there could be triggers behind us. For example, 20 years ago, if an employee was frequently late, many bosses would take the hard line and discipline them, thinking they’ve been partying or can’t be bothered to get out of bed. Thankfully, today, most managers should realise this lateness could be because they’re suffering depression or feel uncomfortable coming in because they’ve failed an exam.”

5. Make time for informal chats

Harris, Devon County Council: “If a trainee’s having troubles, don’t add to their woes by pulling them into an office and placing them onto a performance improvement plan/capability review. Instead, get to the bottom of what’s happening by having an off-the-record conversation, perhaps taking them for a walk in the local park. Managers can’t be everybody’s best friend, but you can support them the best you can.”

Bullman, First Intuition: “If you find a trainee isn’t forthcoming about what’s troubling them, don’t start nosily prying into their personal lives. Instead, strike up an informal conversation with them, perhaps in the office kitchen.”

6. Ask key questions – and remember to pause

Bullman, First Intuition: “Many trainees feel uncomfortable opening up to their bosses. To get them talking, always ask how they’re feeling. At the end of a one-to-one meeting, also ask, ‘Is there anything else?’ There may be an awkward silence of five seconds. Resist the temptation to butt in, as you’ll often find this pause gives the trainee time to reflect, with them telling you, ‘Do you know what, there is something I’d like to talk about…’”

7. Foster wellbeing by hosting events

Hill, PKF Francis Clark: “We have Wellbeing Wednesdays, a programme of events/resources focused on physical, mental and financial wellbeing. This can include webinars from sports psychologists or HSBC giving employees financial information on budgeting, retirement planning or buying a home [mental health conditions such as depression have been linked to a lack of depression and worries over finances]. All content is recorded and published on our intranet.”

8. Provide a content hub

Harris, Devon County Council: “We’ve got a ‘People Hub’ on Microsoft SharePoint, which pools together mental health resources for staff, covering wellbeing support for managers, employee assistance programmes, listings of wellbeing events, neurodiversity info and links to external support.”

9. Provide ‘work buddies’ and share experiences

Bullman, First Intuition: “Bosses/managers who share their experiences [of failure or mental health struggles] goes down well with younger people. I talk openly about when I once failed an AAT exam, something trainees are surprised to hear.”

Harris, Devon County Council: “We ‘buddy up’ new apprentices with former apprentices/trainees who can share personal tips on dealing with exams and other stressful situations. Staff simply volunteer their names if they want to be a buddy.” 

10. Create mental health first aiders

Hill, PKF Francis Clark: “We have mental health first-aiders [designated employees trained to recognise signs/symptoms of mental health issues and listen empathetically]. It usually involves attending a four-day training course.”

Bullman, First Intuition: “The best money an accountancy practice can spend is sending staff on a mental health first aid course. mhfaengland.org. smhfa.com. mhfawales.org has more info.”

11. Encourage staff to volunteer

Hill, PKF Francis Clark: “We also have mental health champions, who are usually enthusiastic employee volunteers with a personal interest in wellbeing. It isn’t a trained role, but they organise initiatives aimed at promoting wellbeing. For example, on Blue Monday [the third Monday in January which is apparently the most ‘depressing’ day of the year], our mental health champions made blue cakes. At other times, they organise walks at lunchtime, and give feedback on how the company is handling mental health.”

12. Probe problems supportively

Brooklyn Hammett, team leader, Devon County Council: “Mention you’ve noticed a certain behaviour or pattern such as lateness emerge, pointing out to them this is out-of-character and gently asking whether there’s a reason this is happening. If they can’t give a reason, that’s fine – they need to recognise you’re there to support them and can truthfully speak to you about what might be going on.”

13. Banish presenteeism – set the right example

Bullman, First Intuition: “Bosses should try to present a positive role model. I’m an early bird, often raring to go at 5.30 am. Does that mean I should be emailing my team at that time? Of course not. If a trainee received an email at 6 am, they could feel latent pressure to perform. Luckily, Outlook allows users to schedule emails. Also, let trainees know it’s okay to switch off Teams/Zoom at lunchtimes or when work finishes, and you don’t expect them to respond to emails during out-of-work hours.”

14. Signpost to professional help

Hill, PKF Francis Clark: “We subscribe to Smart Health through [insurance firm] AIG which offers a portfolio of 24/7 support. Trainees can pick up the phone and book free counselling, as well as access a psychologist. It helps when exams/workloads get a bit much or they’re going through personal issues such as bereavement or break-ups.

Bullman, First Intuition: “We recommend various resources: MFAH, the charity Mind and the Samaritans.”

Why accountants are worth celebrating

Posted by & filed under Community, Members.

The impact of accounting is felt across society, and it’s time we acknowledge how valuable good accountants are to us all.

Oscar Wilde once said that “A fool is someone who knows the price of everything and the value of nothing”. 120 years on and it’s just as true now as it ever was. Basic accounting practices are, of course, vital to the efficient running of any business, but the wider impact of the work of accountants across society goes way beyond simply keeping score.

“There’s always been this horrible stereotypical image of accountancy, but they’re sort of boring number crunchers, where maths is what it’s all about,” says Prof Andy Lymer, Professor of Taxation and Personal Finance and Director of the Centre for Personal Financial Wellbeing at Aston Business School.

“And I think that’s a stereotype that – if it was ever true, and I’m not sure it ever was – is mainly tied up with this idea of them being auditors, where job is just to make the numbers add up.”

Keeping accountable

AAT’s Accountable campaign is so important to us because we’re aware of the benefits of good accounting practice.

Find out more here

Beyond the numbers

And while Lymer doesn’t go around shouting about the importance of bookkeeping, he says its impact is absolutely felt across individual businesses and society as a whole. “Huge percentages of accountants these days are really increasingly becoming data analysts,” he explains.

“Their job is about taking an abstracted set of information and describing what it means in the complex world of business. They have to help business managers, business owners – those who need to make decisions about how a business operates – visualize the data to make sensible decisions.”

And by doing that, he argues, more businesses survive and thrive and contribute to a healthy and robust economy. And that in turn not only delivers growth but also adds to confidence among investors, banks and regulators that companies are – for the most part – properly and ethically run.

A question of trust

Libby Walklet runs her practice under the name The Ethical Bookkeeper. It’s an apt moniker, given her belief in the importance of trust that is fundamental to the accounting profession’s license to operate. “If you go back to the 2008 financial crisis, and then with more recent scandals: they just highlight the need for greater transparency and accountability to rebuild the trust in the profession and allow for informed decision-making.”

Walklet offers the recent bankruptcy of shared office provider WeWork as proof of the importance of sound financial management and how investors, employees and customers are all hit when it falls down.

“If you look at what’s happened there, where they had high levels of borrowing as the pandemic hit, they had built a business on borrowed money; and when something goes wrong, and interest rates go up, it’s not sustainable.

It’s simple: if you get it wrong, you’re a weakness, but if you get it right you’re a strength, you’re a barrier. And that’s such an important job.

Libby Walklett FMAAT, Director, The Ethical Bookkeeper

“So the question is, who is advising them? Who’s advising them not to borrow. There were real people sitting around in a boardroom discussing this. And why is nobody looking at the potential risk? The risk rates can fluctuate. So even that in itself was a risk. So what were the accountants behind them? What were they saying? Or did they flag the risks while the company ignored them?”

Maintaining confidence

So as the creditors line up and headlines are written, once again confidence is shaken in business. It’s a factor that Andy Lymer, someone at the sharp end of training the next generation of accountants, believes gives training providers a great opportunity to create more self-aware accountants, able to deliver immense value to society.

Lymer says that one of the first questions he asks of new accounting students is simply: why are you doing accounting?

“And often the answers you get are stereotypical: ‘I think it’ll be a good job’, ‘My parents think I’ll earn lots of money’, ‘I’m good at maths’. So one of the first things we do at Aston in that first year is put them through a course focusing on the skills that you will need to have to be an effective accountant within society.”

That involves bringing representatives in from a whole range of professions to help students understand the impact of accounting on the bigger picture.

“They can tell students how accounting helps us do what we need to run a better business. Because people have this really weird view that accounting is somehow limited to auditing or the tick and bash of basic management control. And even people who do accounting as a career sometimes just need their horizons raised to see how they contribute to a healthy and ethical society.”

The bigger picture

Whether that means ensuring the correct tax is paid in order to contribute to government coffers, advising on what possible support the business might qualify for or spotting opportunities to grow and employ more staff, the accountant underpins it all.

“Accounting is the language of business,” Lymer says. “It’s what enables you to talk about what you’re trying to achieve and how you’re going to do it. How do you get from here to there? How do you communicate? How do you conceptualize? How do you abstract? How do you focus? How do you enable people to ignore the things that aren’t important and drill down to the things that are? How do you get people to predict what the future might look like by learning from the past? In essence, that’s what accountants do – and the impact can be enormous.”

It’s a role that Libby Walklet takes very seriously. “We’ve got a responsibility to keep up to date with all the new legislation, and with things like AML, again we’re key to that fight.

“It’s simple: if you get it wrong, you’re a weakness, but if you get it right you’re a strength, you’re a barrier. And that’s such an important job.”

Keeping accountable

AAT’s Accountable campaign is so important to us because we’re aware of the benefits of good accounting practice.

Find out more here

What accountants need to know about the Economic Crime and Corporate Transparency Act

Posted by & filed under Anti-money laundering, Financial accounting and reporting, Members.

Find out how the ‘biggest shake-up’ in Companies House history will affect you.

The Act will deliver:

  • reforms to Companies House
  • reforms to prevent the abuse of limited partnerships
  • additional powers to seize and recover suspected criminal cryptoassets
  • reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime
  • new intelligence gathering powers for law enforcement and removal of nugatory burdens on business.

These provisions will bear down further on kleptocrats, criminals and terrorists who abuse our financial system, strengthening the UK’s reputation as a place where legitimate business can thrive, whilst driving dirty money out of the UK.

The reforms to Companies House are wide-reaching and highly significant, and amount to what’s been described as the ‘biggest shake-up’ in the agency’s 180-year history. Companies House will receive more power through enhanced tools and capabilities to help the Registrar verify the identity of company directors and act swiftly on any fraudulent activity.

These reforms include:

  • Introduction of verification checks of company directors to prevent the use of false names and company names.
  • Closing loopholes in public beneficial ownership registers which have in the past, enabled unscrupulous individuals to move or hide money behind falsely registered companies.
  • Providing users of Companies House with greater clarity and transparency on businesses and suppliers they happen to be working with.
  • Removing fraudulent or falsely registered office addresses, companies and organisations.
  • Collaborating with law enforcement and criminal investigation agencies.

The Act also includes two other reforms which, if not heeded, will have big implications for organisations.
Section 196 states: “If a senior manager of a body corporate or partnership (the “organisation”) acting within the actual or apparent scope of their authority commits a relevant offence after this section comes into force, the organisation is also guilty of the offence.”

This means that the organisation where the relevant offence (fraudulent trading, bribery, tax evasion, offences under the Financial Services and Markets Act 2000 for example) took place is also guilty by association. This reform is due to come into force by the end of the year.

In addition, the Act also includes a ‘failure to prevent fraud’ offence although timescale for introduction of this reform has not yet been confirmed. Once it comes into force, it will affect large companies where an employee or director has committed fraud. The onus is then on the implicated organisation to prove it had fraud prevention procedures in place.

We spoke to AAT members to help unpick the implications of this Act and advise on how accountants can ensure they remain compliant and maintain vigilance when it comes to preventing economic crime.

Accountants must now apply an extra layer of due diligence

Michael Beech FMAAT AATQB, Director, Michael Beech Accountancy

Under the Act, law enforcement agencies will have the power to seize crypto-assets, therefore accountants may need to apply more robust due diligence and background checks on potential new clients. Crypto-assets carry a high risk so these checks will be of paramount importance for accountants to ensure their clients are of good character.

In the worst-case scenario, if a client has their crypto assets seized, the accountant could be tarnished by association.

Another important issue to consider is when accountants provide their office as a registered office for clients. This is a huge risk. If the client is involved in wrongdoing, the accountant and their reputation will be linked and will be a huge setback to any licensed or regulated accountant.

Verdict: Accountants will need to ensure their due diligence and background checks are robust to verify good character of clients.

Inform smaller clients that filing profit/loss accounts with Companies House is now mandatory

Julie Pocock MAAT, Director, Kingfisher Services

The Economic Crime and Transparency Act is new legislation to tackle money laundering and fraud, and reform Companies House. The main changes affecting accountants will be around ID verification of company directors and people with significant control of limited companies, and changes to accounts and filing at Companies House.

Directors will not be considered legally appointed unless their ID is verified. Verification can be obtained by uploading approved documents to Companies House, or through an ‘Authorised Corporate Service Provider’ such as accountants or company formation agents. Accountants will need to ensure their AML procedures are up-to-date and that ID verification is obtained for all clients, especially where they complete company formations.

In a big change to accounts and filing, small companies are no longer able to file abridged accounts, and must file their profit and loss account. This will result in a loss of privacy for clients, so accountants will need to make clients aware of these changes before they happen, so it doesn’t come as a surprise.

There is also a new corporate criminal offence of ‘failure to prevent fraud’, but this will only apply to large companies and won’t affect accountants whose client base are small/medium companies.

I believe that the Companies House reforms around ID verification are a good idea, and should work to prevent companies being set up under false names and addresses, however, I think that the mandatory filing of profit and loss accounts for all companies is a step too far.

The new ‘failure to prevent fraud’ offence will not be far-reaching enough as it does not include small businesses, and therefore will not obtain good results.

Verdict: Accountants should inform their smaller clients that filing profit/loss accounts with Companies House is now mandatory to avoid surprises.

Accountants must adapt to a much more stringent regulatory environment

Vanessa Myatt FMAAT, MD, TCW Accounting Solutions

The bill includes substantial reforms to Companies House, impacting small companies and microenterprises. These companies can no longer file abridged accounts but are now required to submit profit/loss accounts. These stricter filing requirements are an increased burden on small businesses and could lead to challenges with compliance.

There is also mandatory identification and verification for new and existing registered company directors, people with significant control and all those associated with those entities. Accountants as Authorised Corporate Service Providers may be responsible for completing these checks.

In addition, there’s now a wide range of offences which fall under the ‘failure to prevent fraud’ category such as fraud by false representation, fraudulent trading and false accounting.

These reforms aim to make it more difficult for economic crime to go undetected and make it easier to prosecute offenders. The introduction of mandatory identification verification and enhanced powers for Companies House for example, are significant steps forward towards greater transparency and accountability. However, I think the true measure of success will be seen in how well these changes deter economic crime.

The implications of all this will affect the day-to-day operation of accountants. In particular:

  • Additional training, as accountants will need to familiarise themselves with these new requirements and consider further compliance training for themselves and staff.
  • Educate clients on these changes to ensure compliance.
  • Update policies and procedures to align with new requirements.

Verdict: Accountants will need to adapt to a more stringent regulatory environment, focusing more on transparency and prevention of economic crime.

What you can learn from the Level 3 Examiner’s reports

Posted by & filed under Students.

This review is of the examiner’s reports that were published in October 2023 and has been written to help you familiarise yourself with the Level 3 Diploma in Accounting units.

The reports “provide information on the performance of students in assessment tasks” and “are intended to be constructive, informative and promote a better understanding of the specification content and assessment requirements.”  They highlight key areas of strength and, more importantly, areas for improvement.  Therefore, they contain useful nuggets of information.  Because if you know in general which topics/tasks most students find hard, you can use that information to guide your learning and revision and help you avoid common mistakes. Although, be careful not to neglect topics just because people generally perform well in them!

So, to motivate you to use them, here is a summary of the weak areas in each unit and links to other articles* that will support your understanding of the topics.  The reports contain lots of extra information so you are strongly encouraged to read them in full.  They can easily be found in the learning portal.

Financial Accounting: Preparing Financial Statements (FAPS)

Overall percentage of students achieving required competence level: 54%

Use of time: only 79% used on average

Strongest tasks: 1  – Using Day Books, and Accounting for and Monitoring Non-current Assets (73% reached competency level), and 4 – Producing Financial Statements for Sole Traders and Partnerships (76%)

Tasks in need of improvement: 2 (only 35% reached competency level) and 3 (37%)

Competency in the other tasks: 5 (55%) and 6 (51%)

Areas of weakness:

Task 2 – Recording Period End Adjustments

  • valuing and posting closing inventory
  • calculating the amount to be accrued or prepaid where an invoice covers two accounting periods
  • posting transactions to the accrued expense accounts or the prepaid expenses accounts (rather than the relevant expense or income account)

Task 3 – Producing, Adjusting, Checking and Extending the Trial Balance

  • identifying the effects of transactions on the accounting equation
  • correcting errors
  • completing a trial balance from written information

There are lots of Comment articles to support this unit, and whilst they were originally written to cover tricky areas in the AQ16 units, the topics are fundamentally the same and the report shows that students are still finding the same key areas difficult.  Therefore, the following are a good place to start.

Relevant AQ16 articles:

Management Accounting Techniques (MATS)

Overall percentage of students achieving required competence level: 61%

Use of time: 84% on average

Strongest tasks: 2  – Attributing Costs (72%), and 3 – Short Term Decision Making (64%)

Tasks in need of improvement: 6 (with 46% reaching competency level)

Competency in the other tasks: 1 (57%), 4 (60%) and 5 (55%)

Areas of weakness:

Task 6 – Budgets and Deviations (using a spreadsheet)

  • freezing rows and columns as required
  • using the forecast function to create a line chart, forecasting sales using averages and a confidence interval as required
  • identifying which variances were adverse or favourable and using data validation to select from a list
  • calculating the net income/loss per month as a percentage of actual revenue

Relevant AQ16 articles:

There are also lots of articles to support tasks 5 and 6 which assess spreadsheet skills.  However, they are under the ‘Resources’ section of the Comment website where you can find Excel Tips. It might be good to start with this article about data validation as it is mentioned in the report as a significant area of weakness.

Business Awareness (BUAW)

Overall percentage of students achieving required competence level: 62%

Use of time: on average students only use 72% of the time available to them but spend more than the notional time allocated on the written tasks.

Strongest tasks: 1  – Organisations and Ethics for Accountants (79% competency), and 5 – Micro-economic Environment and Sustainability (92%)

Tasks in need of improvement: 4 (34%) and 6 (29%)

Competency in the other tasks: 2 (50%), 3 (65%) and 7 (64%)

Areas of weakness:

Task 4 – Ethical and Legal Compliance

This tasks requires written answers and weaknesses include:

  • not providing an answer which was targeted to the requirement asked
  • stating all ethical principles and threats in hope to gain marks. Students’ need to ensure that they identify the relevant principles and threats, explaining them in the context of the scenario
  • not providing an explanation of the process of money laundering and the regulations around the reporting of any suspicions
  • not demonstrating knowledge and understanding of the actions which can be taken to address unethical behaviour

Task 6 – Communication and Visualisation

This tasks requires written answers and weaknesses include:

  • not identifying or explaining the trends and patterns in data presented
  • not identifying the appropriate format for visualised data and for communications to meet the needs of the user
  • not identifying the relationships in the presented data and not understanding the information that can be drawn from a visualisation
  • not interpreting performance across a range of information provided in different formats

Other remarks regarding Task 2 – Analysing the External Environment

This task includes written answers in relation to completing a PESTLE analysis and the report states that students struggle to apply their analysis to the given scenario.  In particular they are weak at identifying relevant threats and then explaining why they are threats and what appropriate actions can be taken to address them, especially in relation to environmental issues.

The report makes a number of other points about exam technique in relation to written answers including the fact that students:

  • don’t always answer the question asked and/or don’t answer it fully or in enough detail
    • Try to use the number of marks available to help you gauge how much to write and always check your answer against the question once you’ve written it to ensure you’ve answered it completely
  • don’t pay attention to the command verb used
    • Ensure you know what the command verbs mean as they indicate the kind of answer the examiner is looking for.  Check out the writing skills e-learning unit and associated videos on the learning portal if you are unsure.
  • don’t use the information given in the scenario and/or make unrelated general comments
    • Ensure you always refer to the scenario to support your points, that way you’ll maximise the marks you can be awarded.

Q22 articles specifically about this unit:

Relevant AQ16 articles:

Tax Processes for Business (TPFB)

Overall percentage of students achieving required competence level: 62%

Use of time: 87% used on average

Strongest tasks: 2  – Calculating and Accounting for VAT, (76% reached competence level), and 3 –  Recovery of Input Tax (73%)

Tasks in need of improvement: 5 (47%) and 7 (39%)

Competency in the other tasks: 1 (58%), 4 (62%), 6 (57%) and 8 (62%)

Areas of weakness:

Task 5 – Verifying VAT Returns

  • reading the task and instructions correctly
  • reconciling the VAT return to accounting records

Task 7 – Principles of Payroll

  • understanding the content of FPS and EPS
  • calculating the amounts due to HMRC
  • performing reconciliations to net pay

Q22 articles specifically about this unit:

This unit has been changed from the previous AQ16 one to better address the needs of employers.  It therefore includes payroll principles and puts emphasis on the administration, compliance, and verification of VAT processes rather than VAT calculations.  It has accompanying reference material that can be accessed during the assessment, with which I suggest you should be as familiar as possible so that you know what is in it, as well as maybe more importantly, what is not!

With that in mind, the following AQ16 articles are relevant as they should help you improve your underpinning knowledge:

Whilst these will help improve your calculation and adjustment skills:

The report also mentions that students need to be more familiar with the implications for non-compliance of VAT regulations, in particular the penalty regime, an area that is covered in Task 6.  So, you should also be aware that the unit is based on a specific Finance Act which is changed annually but is usually a year behind the actual tax year.  This means that some of the details you will be assessed on, such as thresholds or penalties, may be different to those that you apply at work. Therefore it’s vital you use the reference material, even if you regularly prepare VAT returns!

General comments made in all reports

As you read the reports you will notice that there are some general themes that come up in each one.  Notably that students’ answers imply that they haven’t read the questions carefully enough and sometimes fail to understand the task requirements.  They also state that students don’t always complete all the components of a task.  Given that on average most people finish with between 13% and 28% of the allocated time left, going slowly and double checking your answers is likely to be a good assessment strategy.

Summary

The purpose of this qualification is to ensure that you are well prepared to progress into a career in business, finance or professional accountancy, or into further education. Therefore it develops the skills needed for financial processes, including accounting principles and concepts, advanced bookkeeping and preparing financial statements. It also covers the business environment, technology used in finance and accounting, business issues regarding payroll and value added tax (VAT), issues in business, management accounting techniques, ethical principles and sustainability considerations for accountants.

In order to successfully pass this qualification, you will need to use a range of study techniques.  The FAPS and MATS units require you to learn theory and then apply it in practice, usually through calculations; skills traditionally within the comfort zone of accounting students.  However, BUAW and a significant proportion of TPFB, requires you to understand topics, recall and apply facts, more than they need you to be able to do things, such as calculations.  Therefore, you will need to adjust your learning techniques so that they are appropriate for each unit.

*  Note that articles published before September 2022 will have been written in line with the AQ16 specification therefore, they could use different terminology, for example, sales ledger/control account as opposed to receivables ledger/control account, but the theory will still be valid.

What do reverse charges have to do with VAT?

Posted by & filed under Students.

I have a client who manufactures and instals greenhouses internationally and have already written an article based on a conversation with Rhys, the company’s owner, about how to determine when to apply VAT to import and exports.

When I next visited, Rhys said that he’s taken on some VAT registered subcontractors, who are in the construction industry scheme, so their work is subject to reverse charges.  He pointed out that I’d told him that reverse charges apply to importing services so was confused about how the two were related.  So we put the kettle on again and went through it!

What is a reverse charge?

It is when the responsibility of applying and accounting for VAT sits solely with the customer.  Under normal circumstances a VAT registered supplier, charges output tax on their sales, and their customers, as long as they are VAT registered, reclaim the VAT as input tax on their purchases.  However, when a reverse charge applies the supplier does not charge output tax and the customer accounts for both the input and output tax simultaneously.

When reverse charges are used

There are a number of circumstances in which reverse charges are used:

  • Importing goods
    • Postponed accounting, is in effect a reverse charge, as it accounts for the value of the VAT due on imported goods and the amount to be reclaimed at the same time.
  • Importing services
  • Buying and selling some goods and services HMRC has specified as being subject to the ‘domestic reverse charge’.
    • These are mainly to do with the telecommunications, gas and electricity and construction industries.
  • Buying and selling services under the construction industry scheme (CIS)

Why reverse charges are used

There are a number of reasons why reverse charges are used.  In the case of postponed accounting, it is to help ease the impact of import tax on an organisation’s cash flow.  However, with regard to the construction industry and the CIS scheme, it is an anti-fraud measure, designed to ensure that VAT is properly accounted for.

How is VAT accounted for when a reverse charge is applicable?

Well, it is included in Box 1 of the VAT return as output tax due and Box 4 of the same return, as input tax reclaimable.  That way no money actually changes hands and the overall net VAT position is unchanged from the customer’s point of view, but the VAT is accounted for as far as HMRC is concerned.

The net amounts will be included in Box 6, with regard to the output, in other words the sale, and the net value of the input, or purchase, will be included in Box 7.

Note that when postponed accounting is used, the net value of imports is included in Box 7, but there is nothing to include in Box 6.

How does reverse charging affect invoicing?

Suppliers of goods and services subject to a reverse charge, like subcontractors who are in the CIS, should not include VAT on their invoices.  However, they should:

  • include all the other information normally required on a valid VAT invoice
  • include a statement that makes it clear that reverse charges are applicable and that it is the customer’s responsibility to account for the VAT
  • clearly state how much VAT is due under the reverse charge, or the rate of VAT if the VAT amount cannot be shown, but the VAT should not be included in the amount charged to the customer.

The VAT regulations 1995 say invoices for services subject to the reverse charge must include the reference ‘reverse charge’ and HMRC provides examples of wording on its website that meet the legal requirement.

Note that the above does not apply to invoices for imported goods and services, as they will not be subject to UK rules but rather those that apply in the country the business is in that is supplying the goods

Further reading:

Why authenticity could be one of your strongest qualities as an accountant

Posted by & filed under Skills.

With a greater emphasis on skills around communication, empathy and understanding when dealing with clients, being authentic and capitalising on your unique personality and skills can make you a highly sought after technician.

We explain why being authentic in business can be a superpower and help you connect with clients and grow your business.

As accountants, we are trusted by clients to be professional and work with ethics and integrity. We know the details of their finances and their cashflow and can discuss strategy and forecasting. Behind the figures, however, are real people trying to make their business or career a success. Sometimes, where appropriate, it can also be helpful to show our human side to connect better and build trust and empathy.

Supporting the people behind the business can be rewarding

“It’s all about being a trusted advisor,” says Morgan Davies, director at Prime Accountants Group. “I always say people are far more interesting than numbers, so you can make a big difference. It’s both powerful and rewarding. Plus, people often say it’s lonely being in business – whoever asks the boss how they are doing? Where does the business owner turn for support?”

He says business owners often have nobody to support them in their company because they are the leader, and they want to protect the team from their fears and concerns.

“The important thing for most SMEs is all of the income for the owner is driven by that business, so the two go hand-in-hand. You can’t know what they’re trying to achieve as business unless you know what the person in charge wants to achieve,” he explains.

“Likewise, they don’t always turn to their families for help either, as they don’t want them carrying their concerns. Lots of people, particularly men, don’t do that,” he says.

“It’s central to know the people behind the business when you’re working with SMEs, so you can support the business in a greater way.”

Integrity and honest communication are key to the client relationship

Stuart Brown, Director and Head of Technical and Compliance at Duncan & Toplis, is a FCA qualified chartered accountant with more than 10 years of practical accounting and audit experience.

He says that fundamentally, if you are not acting with trust and authenticity as an accountant, then you are not acting in a professional manner. 

“Without honesty and integrity our word and our actions are worthless,” he says. “Accountancy is one of the most trusted professions and therefore, if we are not trustworthy, then we are bringing our profession into disrepute. If our clients trust us, they will share problems with us, they will share their thoughts and feelings with us which will better enable us to help them.

He says that being yourself is being authentic and you will naturally be more trustworthy and that empathy is a key component of communication.

“Don’t be fake, don’t say things you don’t mean and be open. Life, personally and in business is easier if you are genuine – clients will be able to tell.”

Connecting with the people behind the numbers

Gemma Heard, founder of GEM Accountancy and GEM Consultancy UK in Cornwall, was the winner of the AAT Past Presidents’ Award for 2023.

She says being approachable and empathetic will be an even more important skill for accountants over the next 12 months because business owners are struggling with the downturn in the economy.

“People who run their own business often take a sense of pride in building the business so when they have to put it on the back burner, it feels personally very hard,” she says.

“For example, if a business owner is starting to rely on their overdraft, rather than writing to them formally I might pick up the phone and ask if everything is okay. It is about allowing them to be open and to remind them that we all go through peaks and troughs in business.

“People are seeking understanding. They want to be understood and they want to feel empathy. When people feel supported, they feel hope and better able to think about the possibilities that are open to them to move forward. This helps them to start feeling positive, and then they can take action. Where appropriate, I might share some experiences I have had personally to show that we all face these challenges and setbacks.”

She says that the financial numbers often tell a story about what season of life an individual might be in, or how their personal life is impacting on their business.

“For example, a new mum isn’t going to generate as much revenue as the year before and that’s not because the business is performing less well. Or someone might be ill, separating from a partner or going through a bereavement,” she says. “It is about having that insight into people beyond the numbers and realising that we’re all human beings and none of us are perfect.”

Gemma has professional boundaries in place to ensure that she adheres to professional standards.

“The conversations that I provide are within the ethics of accounting. I will never advise on something I’m not qualified to do, and I wouldn’t speak to somebody about mental health advice – I would direct them to mental health professionals,” she says.

Accounting is now as much about communication as numbers

Building a strongpersonal rapport with your clients also means that when tough times come, you can have an open discussion with them.
“Honesty and integrity are vital for the very substance of anyone working in accountancy,” says Matthew Hayes, MD of growth consultancy, Champions (UK) Plc.

“It’s vitally important to have a strong relationship with your client because you’re going to have to walk that client through some decisions that they may not want or believe are in their best interests but which are the best thing. So having that correct relationship where you can be honest and robust about what is right and what the client needs is vital and is the job of the expert advisor,” he says.

“The reality is that often there is a need to have some hard cold conversations and if you are truly honest and authentic then the client will understand and respect the reasons for what they’re doing. This in turn builds trust and rapport.

“The ideal end goal is that you have a relationship that lasts 5-10 years and is one where you understand each other. If you are authentic and make it clear that you have a client’s best interests at heart then you are more likely to build a relationship and build a far better working practice over time.”

How to become more authentic in your business dealings

So how to create this authentic approach to accountancy? Liz Sebag-Montefiore, Director and Co-founder of 10Eighty, a career and talent management consultancy, says authenticity starts with self-awareness: knowing who you are – values, emotions, and competencies and how others see you.

“To be authentic and professional means aligning your values, strengths, and competencies with workplace culture and standards, to reach a balance that reflects your authentic character,” she says. “This will help you build credibility, trust, and meaningful relationships.”

What you can learn from the Level 2 Examiner’s reports

Posted by & filed under Students.

This review is of the examiner’s reports that were published in October 2023 and has been written to help you familiarise yourself with the Level 2 Certificate in Accounting units. 

The reports “provide information on the performance of students in assessment tasks” and “are intended to be constructive, informative and promote a better understanding of the specification content and assessment requirements.”  They highlight key areas of strength and, more importantly, areas for improvement.  Therefore, they contain really useful nuggets of information.  Because if you know in general which topics/tasks most students find hard, you can use that information to guide your learning and revision and help you avoid common mistakes. Although, be careful not to neglect topics just because people generally perform well in them!

So, to motivate you to use them, here is a summary of the weak areas in each unit and links to other Comments* that will support your understanding of the topics.  The reports contain lots of extra information, so you are strongly encouraged to read them in full.  They can easily be found in the learning portal.

There are lots of Comment articles available and whilst most were originally written to cover tricky areas in the units for a previous set of standards, the key areas covered in your qualification are fundamentally the same and it is likely that you will still find the same areas difficult.  One of the biggest changes between the standards is the terminology so having an initial read of Accountancy Terminology: Here’s what you need to know and/or A bitesize glossary might be helpful. 

Introduction to Bookkeeping (ITBK)

Overall percentage of students achieving required competence level: 85%

Use of time: all tasks completed within 80% of the time available on average

Strongest tasks: 3 – Processing customer invoice or credit notes and entering in daybooks (with 98% reaching competency level) and 5 – Processing supplier invoice or credit notes and entering in daybooks (94%)

Tasks in need of improvement: 7 (62%) 8 (63%) and 9 (68%)

Competency in the other tasks: 1 (82%) 2 (71%) 4 (88%) 6 (84%) 10 (72%) and 11 (76%)

Areas of weakness:

Task 7 – Processing transactions in the cash book

  • miscalculating net and VAT from VAT inclusive amounts
  • incorrectly entering the total amount of a transaction into the digital bookkeeping system instead of entering the net amount and selecting the appropriate VAT code
  • incorrectly identifying transactions as relating to cash sales or purchases instead of receivables or payables and vice versa

Task 8 – Processing transactions in the petty cash book

  • miscalculating net and VAT from VAT inclusive amounts
  • failing to balance the petty cash book correctly
  • incorrectly identifying the amount required to top up the petty cash float in an imprest system

Task 9 – Processing recurring entries

  • miscalculating the amount of the recurring receipt or payment
  • miscalculating the number of recurring receipt or payment postings required
  • incorrectly identifying the frequency of receipts or payments

Relevant articles

Principles of Bookkeeping Controls (POBC)

Overall percentage of students achieving required competence level: 72%

Use of time: 76% used on average

Strongest tasks: 4 – Reconciling a bank statement with the cash book (76%) 7 – Extracting a trial balance (79%) and 8 – Redrafting a trial balance (89%)

Tasks in need of improvement: 2 (54%) and 6 (48%)

Competency in the other tasks: 1 (69%) 3 (62%) and 5 (61%)

Areas of weakness:

Task 2 – Reconciling control accounts

  • miscalculating the total of the balances in the receivables and payables ledgers, particularly when negative balances were included
  • identifying reasons why the total of the balances in the receivables and payables ledgers did not reconcile with the control accounts

Control accounts are explained in the Sales and purchases: 5 part series, especially in parts 4 and 5.

Task 6 – Using the journal to correct errors

  • identifying by name the errors that do not affect the trial balance
  • incorrectly identifying whether journal entries should be on the debit or credit side
  • preparing journals that do not balance
    • There are a couple of articles about journals as it is a topic that lots of students find difficult. Journals focuses on avoiding getting the debits and credits the wrong way round.  You could also read Using a four line journal to correct errors, this goes through AAT’s standard correction method, however, you should be aware that you may need to net off journal entries in your assessment which is not done in this article.

Relevant articles

Principles of Costing (PCTN)

Overall percentage of students achieving required competence level: 70%

Use of time: 79% used on average

Strongest tasks: 1 – Classification and relationship of costs (84% competency), 2 – Costing techniques (76%), 3 – Recording costs (78%) and 5 – Calculating costs of products and using tools and techniques to improve the presentation of information (70%)

Tasks in need of improvement: 4 (61%), 6 (67%) and 7 (68%)

Areas of weakness:

Task 4 – Calculating overhead absorption rates and looking at the behaviour of costs

  • total costs calculated rather than unit costs
  • incorrect application of the overhead recovery rate to establish the correct unit/service cost
  • incorrect calculations of fixed and variable costs when activity levels change
  • limited understanding that variable costs per unit remain constant at different levels of output, and that fixed cost per unit decreases when activity levels increase
  • unable to correctly identify cost behaviour from a description

Task 6 – Labour and inventory calculations

  • incorrectly identifying the inventory valuation method used when presented with costing data
  • incorrectly calculating the cost of issues and valuation of closing inventories using FIFO, AVCO and LIFO
  • limited understanding of inventory control policy i.e. buffer stocks, reorder quantities and lead times
  • incorrectly calculating shift allowances and overtime premium payments as part of total labour payments

Task 7 – Budget calculations and exception reporting using formulas

  • adverse variances shown as favourable and vice versa
  • some incorrect calculations of variances when expressing these as a percentage of budgeted costs and income
  • incorrect interpretation of organisational policy when deciding the appropriate manager for reporting significant variances.

You should be aware that the assessment uses a spreadsheet style of question rather than spreadsheet software itself.  Therefore, if you have been using software, like Excel or Google sheets, as part of your studies, then tasks 5 and 7 will look similar but not exactly the same.  Try using the familiarisation resource on the learning portal to help you understand the difference.

Relevant articles

The Business Environment Synoptic (BESY)

Overall percentage of students achieving required competence level: 65%

Use of time: 83% used on average

Strongest tasks: 1 – Different business types and their functions (81%) 3 – corporate social responsibility (CSR), ethics and sustainability (86%) and 8 – The external business environment (85%)

Tasks in need of improvement: 4 (52%) 5 (52%) 6 (57%) and 7 (37%)

Competency in the other task: 2 (74%)

Areas of weakness:

Task 4 – Processing bookkeeping transactions and communicating information

  • accounting for discounts – understanding the difference between a trade discount and a prompt payment discount
  • describing elements
  • understanding the bookkeeping process including the purpose of books of prime entry, ledgers and financial statements
  • bookkeeping transactions
    • See Comment suggestions for ITBK

Task 5 – Control accounts, reconciliations and using journals to correct accounts

  • identifying unpresented cheques and outstanding lodgements
  • identifying reasons for differences in control accounts
  • processing journal entries when VAT and net amounts must be calculated from a gross figure
    • See Comment suggestions for POBC

Task 6 – The principles of contract law

  • intention
  • Remedies
  • Have a look at Contract law and wallpaper: parts 1 & 2 to help you with this task  (Note that part 2 covers how contracts can be ended by frustration or agreement which are no longer assessed).

Task 7 – Bookkeeping systems, receipts and payments, and the importance of information and data security

  • understanding that controls also exist in a digital bookkeeping system
  • the role of payables and receivables ledger teams
  • applying knowledge of digital systems in a scenario
  • accounting for irrecoverable debts

This assessment is different to the others in the qualification as it is the level 2 qualification synoptic and includes topics covered in ITBK and POBC as well as the Business Environment unit.  It requires students to apply knowledge to scenario-based questions both in relation to answering multiple choice questions and providing written answers, neither of which should be underestimated.

Typically, students find written tasks difficult so it would be worth having a look at the writing skill e-learning unit and associated videos on the learning portal.  You could also have a read of How to apply active verbs part 1.

A couple of articles have been written to specifically support the Business Environment unit:

And the following article is also relevant:

General comments and summary:

There are a couple of common themes that run through all of the level 2 examiners’ reports.  These include that examiners’ feel that some of the answers given suggest that students might not have read questions carefully, thereby missing or misunderstanding key information.   Also, not following the instructions in the task i.e. entering figures to the nearest whole pound or two decimal places when requested, is mentioned a couple of times, as is not attempting some elements of a task.  Therefore, regardless of which assessment you are sitting, be sure to take your time, read every question carefully and double check your calculations and answers before pressing submit.

*Note that articles published before September 2022 will have been written in line with the AQ16 specification therefore, they could use different terminology, for example, sales ledger/control account as opposed to receivables ledger/control account, but the theory will still be valid.

Why employers look for AAT qualifications

Posted by & filed under Employer newsletter, Employers, Members.

Employers explain what they value about the skillset and qualities AAT training gives their staff.

Accountants who study AAT come away as all-rounders ready to meet each challenge business throws at them. That’s because the qualification starts from the basics and takes you into the nuts and bolts of finance.

Students learn a huge breadth of foundational knowledge that you need to be really successful in finance, beginning with double-entry bookkeeping and balancing key accounts. Then they move into more advanced skills such as tax, preparing financial statements and general business awareness.

Marrying up technical skills with business knowledge is the magic combination that keeps employers coming back for more. We asked employers about the specific benefits of the AAT qualification, and the people that hold it.

I’ve used AAT to build multiple finance teams

Mike Copping, freelance CFO

Mike Copping is a seasoned freelance CFO, who has built several finance teams for clients over the last 10 years. He uses the same plan based on AAT qualified staff because they are versatile individuals equipped to tackle any financial challenge a business might face.

This approach has helped many of Copping’s clients. A tech business he works with has unpredictable revenue streams, with payments ranging from monthly to annually. Inconsistent billing left them with ‘lumpy’ revenues, so it was having difficulty producing monthly reports that gave a clear picture of performance.

“The AAT-trained company finance manager was able to apply her training on the accruals concept to match income to expenditure in the right financial period. She could look at the P&L and put a year’s worth of income with no costs associated into a balance sheet as a holding account and anticipate the invoice for the costs in the following month or so.”

“AAT is mandatory for me. It’s a matter of quality, because it’s a detailed qualification that really gets into the nuts and bolts; it starts at a very basic level with double entry bookkeeping and so on, and learning what a trial balance is, how it’s all made up, balancing key accounts. There’s a good breadth of foundational knowledge that you need in finance to be really successful.”

AAT helps school leavers deliver in the workplace

Helen Bloodworth, Associate Director of Early Careers at RSM

RSM is one of the UK’s largest accounting networks. It uses AAT as its principal training partner and hires AAT trainees straight out of school. Helen Bloodworth says its target of reaching a 50-50 split in its intake cohort between the school leavers and graduates is made easier by AAT.

“The level and the pace of AAT is ideal for the 18-year-olds coming in,” she says. “It just fits that school leaver market really well. AAT gives them that two-year foundation qualification, and time to adapt to the workplace without their studies being too overwhelming. And then they’re in a very good position to start ACA two years in with their two years of experience if they want to.”

“Not only is there the kind of knowledge which the AAT qualification gives them, but they’ve also got to develop the skills and behaviours alongside it. AAT helps them develop all the things that they need to be a rounded accountant, like communication and ethics.”

AAT gives us a production line of reliable talent

Laura Whyte, Founder and MD of accounting practice Whyfield

Laura Whyte is MD of accounting practice Whyfield. She has chosen AAT because she’s sure Whyfield benefits from its rolling intake of AAT accountants. It means the firm has the technical skills to help clients with credit control, payroll and accounts payable, and also somebody who knows the business.

“We always have at least one AAT Level Two, one Level Three, and one Level Four in the business. That means we’re constantly bringing on new talent and pushing them and supporting them through that AAT journey.

“We find then that those newly qualified Level 4 or even Level 3 are really happy to support the new Level 2s and 3s that are coming through. This creates an ongoing peer-to-peer cycle that everybody’s filtering through, with specialist knowledge of accounting and also how we work.”

“So that means we’ve got fully qualified accountants popping out the top that have been with us for two or three years; they know how we work, and they’ve got the qualifications then to go alongside it. We realized quite early on that growing our own was the best route,” she says.

Accountants review their clients’ bad behaviour

Posted by & filed under Client relations, Members.

Overstretched since Covid, here’s how accountants are reacting to post-pandemic rudeness.

Accountants, like many professionals, experienced a significant workload increase during the Covid-19 pandemic. With huge numbers of businesses experiencing financial pressures following lockdown, clients turned to their accountants and bookkeepers to help guide them through an uncertain and highly volatile economic climate.

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And when the government announced a series of financial support packages for businesses such as Coronavirus Job Retention Scheme and the Coronvirus Business Interuption Loan (CBIL), accountants were called upon to help apply for and implement these schemes, too.

In many cases, accountants were overservicing, often working longer hours and taking on additional work without necessarily charging for their time.

Now, there appears to be a certain level of expectation from some clients which is no longer financially sustainable, particularly for small practices. On top of this, accountants have also noticed a deterioration in client behaviour such as:

  • Expectation of availability 24/7.
  • Contacting accountants through personal social media profiles.
  • Ignoring Out Of Office emails.
  • Rude and abusive emails.

‘Post-pandemic rudeness’ appears to be an issue predominantly affecting the healthcare sector along with hospitality and retail, including flight attendants, with staff experiencing impatience, irritability and sometimes abuse from customers. Remote working has also appeared to make people ruder. And accountants too often are bearing the brunt of frustrated and impatient clients.

We asked accountants what they’ve experienced and how they’ve managed to install firmer and clearer boundaries, even if it’s just sometimes just saying ‘no’. For reasons of confidentiality, some AAT members have requested anonymity.

I’m creating a Code of Conduct from the start

Sharon Wray FMAAT, Director, Sharon Wray Accountancy Services

I’ve found a lot of clients have become more demanding and impatient since the pandemic. The clients I find particularly draining are those who expect more from us but don’t want to pay. They want more for less.

There’s now a few clients I’m looking to get rid of because they take up a lot of energy and brain space. One in particular doesn’t want to pay tax, he’s never paid. I emailed him recently and informed him of his tax bill – his business now has a turnover of over £30,000 and told him he has to pay tax. He responded very rudely with personal insults which really got me down. I’ve since informed him he needs to find another accountant.

It was an unpleasant experience but actually, it’s made me realise the importance of setting boundaries. I’m now putting together a Code of Conduct for clients which details what clients can expect from us and what we expect from clients.

Verdict: After an unpleasant experience with a client, I’m now putting together a Code of Conduct to ensure firm boundaries are in place from the very beginning.

Some clients contact me through personal social media channels

Director of accountancy practice based in the South-West and AAT member

Clients have become ruder since the pandemic. Many expect us to be available 24/7. They have my mobile number, but it means they can text, WhatsApp or phone at any time.

I was recently on annual leave and one client – who pays £150 a year – was constantly messaging, demanding an immediate response about his tax returns. When I told him I’d respond when I was back, he became quite rude.

Even with email, some clients have ignored my out-of-office and have used social media to reach me. I’ve even had a few clients contact me on Facebook which feels really intrusive.

Larger accountancy practices don’t have this issue – there are specialist helplines clients can ring instead.
As a small practice, there’s always the pressure to respond to clients immediately, even outside of office hours, because you don’t want to lose clients.

My hours should be 9-5 Monday to Thursday and 9-12 on Friday but if clients contact me at 5:30 on a Friday, I’ll usually respond. However, I do think mental well-being comes into this. If I know a client is under a lot of stress, I’ll respond immediately but otherwise, I’m more able to hold off until it’s convenient.

Verdict: Clients often contact me on personal social media channels and ignore my out-of-office emails. I need to set firmer boundaries.

Sometimes you have to say ‘no’ to clients

Vipul Sheth, chartered accountant and MD, AdvanceTrack

For the accountancy profession, the aftermath of Covid has brought on a significant surge in workloads, and client expectations have evolved accordingly. The demand for more comprehensive services is not a new challenge because accountants have always made meeting clients’ needs and delivering value their top priority. However, it’s safe to say that post-pandemic dynamics have exacerbated these expectations.

But clients need to understand the limitations and capacities of their accountants and this is where setting clear boundaries comes into play.

In my view, there are situations where accountants can politely but firmly say ‘no’ – by explaining the potential risks or additional costs associated with extra requests and exceeding the agreed-upon scope. This isn’t about refusing service, but ensuring the client comprehends the implications of expanding the scope. They wouldn’t expect to get free extras in any other area of services, so why should they from their accountant?

Verdict: Accountants sometimes have to say ‘no’ to clients – when extra requests exceed agreed upon scope.

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Busting the 9 most common myths about apprenticeships

Posted by & filed under Apprenticeships, National Apprenticeship Week.

An apprenticeship could boost your company at minimal expense – and the process is easier than you think.

As a business owner, you probably already know about the benefits of apprenticeships. They can fill your talent pipeline with skilled employees and provide a structured, affordable way to ensure your company has a ready supply of qualified talent to fill critical roles.

But maybe you are hesitant because of potential downsides.

Perhaps you believe they are too costly for your business to afford. Or maybe you think they would be too difficult to set up – or too time-consuming to run.

The good news is that apprenticeships are none of these things. In the following videos, numerous employers with abundant real-world experience demolish the common myths that may be holding you back.

1. Myth: apprenticeships are hard to set up

Creating an apprenticeship is easy. AAT and a training provider will hold your hand through the whole process, from securing funding to placing adverts. Your employee’s training provider handles most of the admin for you.

“Setting up an apprenticeship is all to do with your relationship with your training provider” explains Catherine Walsh, Human Resources Director, Buzzacott.

Check out our guide to getting started for the seven easy steps.

2. Myth: apprenticeships are expensive

Apprentices are a cost-effective way to hire and train staff. Research shows businesses typically receive a bottom-line boost of about £2,000 every time they hire an apprentice (after wages/training costs). Plus, a typical SME can get 95% of their training costs funded.

It also helps that recruiting is usually simpler than hiring a regular employee.

3. Myth: employers have to spend time ‘babysitting’ apprentices

Looking after an apprentice might be daunting, but Helen Bloodworth, Senior Manager – Professional Qualifications, RSM UK found “it’s no different to usual line management”. Indeed, a talent coach will guide you and your apprentice through the process.

The training provider is paid to take the pain out of running apprenticeships, including paperwork, pastoral care and helping apprentices record their evidence. Ultimately, they’ll help you throughout as it’s in their interest that the apprenticeship works.

4. Myth: the off-the-job training has to be delivered externally

Apprentices are required to spend a fifth of their week on education such as theory or writing assignments. But this doesn’t mean they have to spend one day a week away from the workplace. Off-the-job training can be delivered at an apprentice’s workplace.

5. Myth: employers have to document off-the-job training

Don’t worry, the training provider documents the apprentice’s off-the-job training so the employer doesn’t have to.

6. Myth: the employer has to pay into the Government levy

You’ll only pay into the Government’s levy scheme if your pay bill is over £3 million a year. Plus, if your annual wage bill exceeds this threshold, you almost certainly have to pay the levy regardless of whether or not you employ apprentices!

Similarly, there are a number of myths that might discourage potential apprentices:

There is no upper age limit. In reality, people of all ages and abilities complete apprenticeships across a variety of industries. In fact, 46% of apprenticeships started in 2018/19 were by people aged 25 or over.

According to Lizzie Morris, Early Careers Development Manager, KPMG “age is absolutely not important to us”. The firm has senior managers, mature students and parents returning to work on their apprenticeship programmes “so they’re definitely not just for school leavers”.

Jack Bennett, apprentice at Pobl housing association, says “I was looking to change my career but the most difficult thing is getting your foot in the door. This apprenticeship programme gives me that opportunity and experience while giving me study leave and being paid on the job.”

7. Myth: apprenticeships are only for new employees

Existing employees can be trained through apprenticeships to attain skills and recognised qualifications. It’s a great way to reward current staff by increasing their skills, knowledge and confidence.

Employers such as RSM and KPMG support apprenticeships for current staff. RSM recently launched a Level 7 apprenticeship, an MSc in data, with a cohort pulled from a wide range of employment grades. At KPMG, employees are eligible so long as their role allows them to apply the knowledge and skills required by the apprenticeship standard.

8. Myth: apprenticeships not as good as a degree

This view is outdated and the evidence proves it. Apprenticeships today are a viable alternative to academic education, covering a variety of sectors and levels. Apprenticeship schemes can be found at law firms, banks, tech companies and accounting giants such as KPMG.

Apprentices really benefit from the programmes. Catherine Walsh, Human Resources Director, Buzzacott says “our AAT trainees qualify with a professional qualification ahead of their peers that go to university”. There are loads of benefits to becoming an apprentice, including getting real-world experience you can’t develop in a classroom, earning while you learn and advancing your career prospects.

Businesses get a boost, too. Apprentices can provide better value than graduates due to their increased loyalty, enthusiasm and motivation. In fact, 85% of employers would recommend apprenticeships to others.

9. Myth: apprenticeships don’t result in full-time jobs

Actually, 90% of apprentices stay in their workplace after finishing their apprenticeship. This demonstrates they are loyal, and that their competence is valued by employers too.

“We see our apprentices as our future finance leaders,” says Pam Hawkins, Finance & Accounting Apprentice Scheme Lead at the MOD’s Defence, Equipment & Support agency. She also notes that 75-80% of apprentices achieve promotion within the first year of their jobs.

Not only can an apprenticeship land a job, it can also help you advance all the way to the top, as accountancy firm director Laura Whyte MAAT can attest. “I’m a real ambassador for the AAT Apprenticeship. It is a great way of joining up learning and working, and it opens the door to so many opportunities in a range of sectors.”

Start your first apprenticeship

You can learn more about AAT apprenticeship on our website. You can also download our free eBook – 7 easy steps to start your first apprenticeship for easy-to-follow advice on how to get up and running.

The main photograph in this article features Narpreet Bhamra MAAT, who studied AAT as an apprentice with Microsoft and is now Senior Global Finance Analyst with Unilever.