Thinking of starting your own business? Studying accountancy might be the first step toward achieving this goal.
Whether you're planning to launch a tech start-up, open a bakery, or offer online services, every business needs solid financial foundations to succeed. An accountancy qualification provides the skills to manage budgets, taxes, and cash flow effectively.
Let's take a closer look at how qualifications from awarding bodies, such as AAT, can help you thrive as an entrepreneur.
Already a qualified accountant? Read more about how upskilling with higher-level qualifications can help you start a business.
Why do entrepreneurs need accountancy skills?
Running a business is much more than having a great product or idea. Financial mismanagement is one of the leading causes of business failure. With the right knowledge, you'll develop the tools to keep your business financially healthy and fully compliant with the law.
A few reasons why accountancy skills are beneficial for entrepreneurs include:
- Budgeting and forecasting: Plan for the future with a clear understanding of your financial position.
- Cash flow management: Monitor what comes in and goes out - cash flow is the lifeblood of any business.
- Legal compliance: Understand your tax obligations and submit accurate financial reports to avoid penalties.
- Strategic decision-making: Use financial data to identify growth opportunities and make smarter business decisions.
- Cost efficiency: Minimise unnecessary expenses by tracking your spending and identifying areas to save.
While you can outsource these tasks to an accountant, having foundation accounting skills allows you to oversee your finances confidently, interpret financial reports, and make informed decisions. This can also save you a lot of money in the long run!
What's a suitable accountancy qualification for an aspiring entrepreneur?
The AAT qualification is a great starting point if you have no prior accounting knowledge or experience. In a nutshell, AAT is recognised as a practical, real-world introduction to accounting.
Why choose AAT?
- Beginner-friendly: AAT is perfect for those starting without any prior experience.
- Practical knowledge: The qualification covers essential skills like bookkeeping and budgeting.
- Flexibility: With four study methods, you can balance your studies with other commitments. Choose between tutor-led lectures in a classroom or live online, or study at your own pace with our award-winning OnDemand method, which includes bite-sized videos, or our most independent online option, Distance Learning.
- Widely recognised: Employers, financial institutions, and business professionals value the AAT as a globally recognised qualification.
- Career growth: Even if entrepreneurship isn't your financial destination, the average salary of an AAT-certified professional in the UK is £35,000.
How AAT can be applied to your business
Some examples of how the AAT curriculum provides practical applications for entrepreneurs and small business owners:
1. Bookkeeping basics
Understanding double-entry bookkeeping gives you a clear view of your business's profits and losses. You'll know how to log transactions accurately, track expenses, and maintain organised financial records. This is critical if you want to avoid confusion during tax season.
2. Budgeting and cash flow management
AAT teaches you how to create realistic budgets and manage cash flow effectively. These skills are key to ensuring your business can handle unexpected costs or seasonal dips in revenue.
For example, imagine you're running a restaurant. With effective cash flow management, you can identify when you're likely to hit a quiet month and plan promotions or scale back costs accordingly.
3. Taxation fundamentals
Taxes can be one of the most complex parts of running a business. Studying AAT will provide you with guidance on handling VAT, PAYE (if you hire employees), and other tax regulations relevant to small businesses.
For example, imagine you're running an e-commerce business. After achieving some success, you will pass the VAT registration threshold. With the knowledge gained from AAT, you'll know how to accurately calculate and submit VAT returns.
4. Management accounting
At higher levels in the qualification, such as the AAT Level 4 Diploma in Professional Accounting, you'll learn about management accounting, which will equip you to set financial goals, track business performance, and craft strategic growth plans.
If you're considering expanding your services or investing in new equipment during your business venture, management accounting skills can help you calculate ROI and determine the right financial move.
Already qualified accountants: How to take the leap to entrepreneurship
If you're already a qualified accountant looking to start your own business, your in-depth knowledge of financial systems may put you in an advantageous position to branch out independently.
Common paths for accountants include launching an independent practice, offering freelance bookkeeping services, or consulting for small business clients. Your foundation in accountancy provides credibility, trustworthiness, and the expertise to handle diverse financial scenarios.
Continuous learning
If you're ready to venture into entrepreneurship, upskilling through additional accountancy courses can be beneficial. For example, as your business expands from a start-up to a larger organisation, you may wish to take on a role as a finance leader within the organisation, which will require you to focus more on management accounting and financial strategy. In such cases, pursuing a higher-level qualification like CIMA’s CGMA can be advantageous.
An overview of CIMA’s CGMA Professional qualification
The CIMA CGMA qualification is designed to go beyond traditional accounting by focusing on management accounting and strategic financial planning, making it ideal for those aiming to provide forward-thinking financial services.
With its strong emphasis on business strategy, performance management, and risk analysis, CIMA’s CGMA qualification equips you with the skills and knowledge to specialise in financial decision-making and business advisory services. This level of expertise can provide AAT-qualified accountants with the tools to pivot into entrepreneurship, enabling them to provide tailored insights and solutions.
Build your business foundation with accounting knowledge
Accountancy knowledge lays the groundwork for a successful business. With essential financial skills, you'll avoid common pitfalls and seize opportunities for growth. Whether you're a budding entrepreneur or an accountant ready to go solo, investing in financial expertise pays dividends in the long run.
Start your accounting journey by studying AAT with us, and take control of your future as a confident, financially savvy business owner.