May-June-issue

BUSINESS AND PRACTICE DEVELOPMENT
When you decide to venture
into private practice as an
accountant or advocate,
you realise that there
are limited resource
materials that can teach you how to start a
firm, manage the firm, source for clients or
most importantly educate you on business
negotiation skills. Our education system
lays emphasis on imparting knowledge on
how to work for an existing business but
does not prepare one to start and run a
business or a firm.
The dream of most accountants in
private practice is to start their own small or
medium size audit firm. These accountants
have the necessary skills, knowledge and
experience to handle clients. But all this
does not guarantee success in your private
practice. However, setting up even the
smallest of practices is not something
that should be taken lightly. In fact, there
are many pitfalls and accountancy and
bookkeeping firms are just as likely to fail as
any other business.
Despite the global economic turmoil of
the last few years, the number of business
start-ups has been rising steadily in the
country, with some small and medium
size companies reporting record figures in
profits. This is very good news for small and
medium size audit firms as they provide the
best prospective clients.
Most of the small and medium size
businesses, cannot afford to employ a fulltime
competent accountant. Neither can
they afford the services of the large audit
firms which are mostly located in Nairobi.
Because of this, the accountancy profession
has seen a rise in the number of small
and medium size practices. This is a big
opportunity for those nearing qualification
and those thinking of going into private
practice.
So, before you start buying furniture for
your new office, make sure you understand
exactly what working for yourself means.
Compliance
First of all, you must comply with all the
rules and regulations required for opening
and running an accountancy practice,
including being fully licensed to take on this
sort of work.
ICPAK requires any member who is
in audit and accountancy practice to hold
a practicing certificate, even if one is a
member of the institute in good standing.
ICPAK’s definition of public practice work
extends beyond auditing, to incorporate
all types of work generally associated with
assurance and accountancy services offered
to the public.
You also need to fully understand
and comply with other industry standard
guidelines and legal requirements such
as confidentiality and data protection,
anticorruption and anti-money laundering
regulations.
Audit and Assurance is a service
industry with risk that can never be zero.
In such a risky and high pressure field of
accountancy even the most organised firms
can make mistakes, all holders of practicing
certificates should obtain professional
indemnity insurance cover against claims
for professional negligence. On top of this,
everyday business insurance to protect
against theft or damage to your office
property, or against personal injury around
the office, makes good business sense.
Professional advice
Accountants often act as advisers for
business owners, directors and investors.
However, that doesn’t mean CPAs don’t
need their own set of advisers. When
opening your own firm, develop a team
of advisers who can give you advice and
steer you in the right direction with your
business. Potential advisers could include
other practitioners, small business owners,
information technology (IT) professionals,
bankers and lawyers. Realize which areas
you excel in and which areas you could use
professional guidance, then seek out those
resources.
Human resource
Your employees are an incredibly integral
ingredient to the success or failure of your
business. Employees should share your
common goal and vision, work hard, and
believe in the future of your firm. Whether
it’s a secretary or college intern, selecting
the right employee is crucial. The key to a
good hire is having a large pool of potential
candidates. You can never over-advertise a
job opening; the more good candidates who
apply, the better chance you stand of finding
a suitable employee. Be picky and analyse
candidates’ résumés, handshakes, clothing,
communication skills and handwriting.
Type of practice
Most commonly, self-employed accountants
maintain very small firms, mostly a sole
partner and one or two administrative staff.
These firms often cater to individuals for
tax preparation or to small businesses for
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