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Invoicing clients

I'm presently doing some casual compliance work as a tax agent and am gradually accruing a reasonable number of clients. Most of the cases have been rather straightforward sole trader SA returns etc with a relatively small fee attached.

Having never worked as a self employed individual before, I'm unsure as to what time period to allow for clients to settle their respective bills upon completion of such work? (I've arbitrarily settled upon 14 days from the invoice date, but have encountered quite some difficult securing payment in this time).

Any guidance would be much appreciated.

Thank you.

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By twj4789
31st Jul 2012 15:27

.

For one off / consultancy work we take a deposit into our client account. Everytime the WIP hits 75% of the amount held in the client account we invoice for payment in 7 days. Our letter of engagement has a right to offset funds held in the client account, if we don't receive payment we stop work, pay our fees and refund the balance from the client a/c. (We offer a bit of leeway!)

For ongoing work like yearly sole trader accounts the first year we take 1/3 upfront 1/3 on completion of drafts and 1/3 prior to submission. The second year we either ask payment up front by standing order or payment prior to submission.

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31st Jul 2012 15:28

Payment Terms

Before taking on every client make it crystal clear how long after your invoice date you expect to be paid. Most of them won't take a blind bit of notice so ensure you get them to sign a letter of engagement in which you explain what you will be doing and what you won't be doing, how much it will cost and your payment terms. Get them to sign a copy and keep it.

At the bottom of every invoice state your terms again.

If you don't get paid when you are expecting to, call them and politely remind them of the terms. If you've chosen a half decent client, it should be easy to keep them to the terms, provided they know you mean business.

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By DMC151
31st Jul 2012 15:45

Many thanks for taking the time to answer. You've given me some useful pointers.

Cheers

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By Flash Gordon
31st Jul 2012 15:51

Payment in advance

I always go for payment in advance these days - that way if they don't pay I'm not out of pocket. After all, John Lewis won't let me have a sofa unless they've got my money safe and sound already....

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31st Jul 2012 15:57

If I were in your shoes...

I would expect half when I met to get the books and half when I met to go through the figures. I would send out a proforma invoice before the first meeting with these terms on it.

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31st Jul 2012 15:59

Don't submit anything or give copies

Until you have been paid. Once the tax return goes in they can mess you about until Doomsday if they are so inclined.

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By sawales
01st Aug 2012 08:21

Agree

ShirleyM wrote:

Until you have been paid. Once the tax return goes in they can mess you about until Doomsday if they are so inclined.

 

I use this principle, if they dont pay I don't submit and in the shredder it goes...

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01st Aug 2012 09:42

i must be mad then....

I invoice my clients when the work is complete - I have a few who pay by monthly SO but that is their request as that is what they were used to.

Thus far I have had no bad debts, I have a few clients who have taken a while to pay but as soon as I chase (30-60 days normally) they pay up straight away and apologise

Maybe I am too trusting but that is how I operate with my clients and I explain that to them at the start - that I will invoice when work complete as I work on a basis of trust - if I can't trust them to pay me I can't trust them to give me all the right information/answers when doing their accounts and tax and so I don't want them as a client anyway.

Maybe I have been lucky over the last 5+ years but my initial client conversations of trust and a handshake is what I rely on for fees far more than an engagement letter. Maybe i'm just old fashioned... !!

 

 

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01st Aug 2012 09:59

@Ding Dong

That is interesting. You must be an excellent judge of character.

I am not very good at judging character so I tend to play safe, as I was regularly taken advantage of when I first started my practice.

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01st Aug 2012 11:51

I agree with Ding dong

 

Many of my clients have come to us from word of mouth and therefore we do use an element of trust and invoice them after the work is complete. Our terms are 30 days and yes there are the odd few that are slow payers but we always get the money in the end so in my opinion it would be more hassle and admin involved for me in keeping track of who had paid installments etc.

There are a few clients who chose to pay monthly by SO which is fine by me. I also have quite a few clients who are subbies and usually get a refund which of course comes to me so the sooner I submit their Tax return, the quicker I get the money and get paid........bonus :)

 

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01st Aug 2012 23:33

client account?

hannahaston wrote:

 

Many of my clients have come to us from word of mouth and therefore we do use an element of trust and invoice them after the work is complete. Our terms are 30 days and yes there are the odd few that are slow payers but we always get the money in the end so in my opinion it would be more hassle and admin involved for me in keeping track of who had paid installments etc.

There are a few clients who chose to pay monthly by SO which is fine by me. I also have quite a few clients who are subbies and usually get a refund which of course comes to me so the sooner I submit their Tax return, the quicker I get the money and get paid........bonus :)

 

 

do you need to operate a client account to receive tax refunds and deduct your fee before sending the net on to the client?

 

if not, i've been missing a trick!! ... must admit i'm not that keen on having to run a "proper" client account.

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01st Aug 2012 20:14

referral is the key I think

All clients (except a few off of google) have been reccomendations/referrals so there is already a trust element so to speak. And even with the Google clients they have (touchwood) all been good

Good judge of character - possibly/hopefully - I am sure one day I will get a bad debt and at that point I may change my my mind to a degree but I am not at this stage considering changing my modus operandi for the odd one who may let me down.

 

 

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01st Aug 2012 20:19

price

oh, and I never accept a client who compares on price - I regularly attend first meetings and am told I am the same/more expensive than existing accountant but don't lower my estimate to win the client.

Another fav tactic is capped fees - when I tell a client your fee will be some between (say) £500 - £800 and it is capped at £800 and I subsequently bill them less they absolutely love it! (I can honestly say in the last year I have had at least two clients asking me if my fee was high enough!!!)

it all helps !

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By Old Greying Accountant
01st Aug 2012 21:06

I'm with Ding Dong ...

...on the whole.

New clients I get 50% up front, without exception (usually!).

WIth average fees of £750, and being just me as chief cook and bottle washer I don't have time to faff around with monitoring debts etc etc, I would rather be churning the next job out, as any time I spend on admin is not time I am spending earning, I would rather create new debtors than waste inordinate amounts of time chasing old ones.

Most pay by return, most of the rest with 2-4 weeks and this compensates for those few that take longer. In 16 years I doubt if my write offs are more than £10 per month.

Larger fees I will generally persuade on to monthly standing order, but those clients you stay close to and know how they are performing so can avoid racking up fees when they are going down the pan!

 

 

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02nd Aug 2012 20:31

Lancsboy2
No I don't bother with a separate client account and never had any problems so far - touch wood. Clients are more than happy for me to deduct fees and pass on the rest. One less thing for them to deal with!

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02nd Aug 2012 20:52

ICAEW issue?

hannahaston wrote:
No I don't bother with a separate client account and never had any problems so far - touch wood. Clients are more than happy for me to deduct fees and pass on the rest. One less thing for them to deal with!

 

cheers HH ... 

do you know if ICAEW / ACCA are OK with client tax refunds coming through the practice bank account?  if so, i would draw down refunds to our account first without hesitation ... but i've already had an ICAEW visit & dont want any hassles from them about it ... cheers. 

 

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By Old Greying Accountant
02nd Aug 2012 21:26

My flabber is ghasted ...

... that an ICAEW should ask this question!

Thank God I'm only a lowly ACCA.

 

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02nd Aug 2012 22:46

a civil response will do fine, thanks

Old Greying Accountant wrote:

... that an ICAEW should ask this question!

Thank God I'm only a lowly ACCA.

 

so do you know the answer?  i assume your sarcastic reply means that you think ICAEW do expect a dedicated / protected client account to receive client tax refunds?

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By euan101
02nd Aug 2012 22:54

Not your money
Clients monies are clients monies, not yours. A fiduciary account should be operated for all clients monies. You are only authorised to draw on these funds once you have signed authority or you have drawn the monies against outstanding fees per you engagement letter.

Fees - I operate a 14 day payment policy with my terms are stated on the fee note along with the date I expect the fee to be paid. A statement is sent 7 days after the invoice just incase the fee note has been missed. Clients generaly pay me within 1 month.

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02nd Aug 2012 23:21

i know that client monies are not our monies

 ... but that wasn't what i asked.  I asked, does ICAEW or ACCA expect an actual client bank account to be operated, with all the admin hassle associated with that. i had assumed so - thats why we dont draw down client refunds to our bank account - but the poster above seemed to say that its not required.  s/he is either not ICAEW / ACCA or maybe unaware. i;ve checked now ...

 

 http://www.icaew.com/en/members/regulations-standards-and-guidance/practice-management/clients-money-regulations

i've no issues (well, no more than anyone else!) in getting paid by clients, but if its possible to have refunds come direct us, then deduct our fees, and send net onto the client, there is an obvious benefit there.  but the client monies admin is too onerous for my liking, so we'll stick with sending refunds direct to client accounts.  

 

thanks anyway.

 

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By Old Greying Accountant
02nd Aug 2012 23:54

What I mean is ...

...  if you can pass the ICAEW exams, does that mean picking up the rule book is beneath you?

Failing that, don't they have a members technical helpine, always best to get this sort of thing from the horses mouth!  

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02nd Aug 2012 23:58

its an internet forum mate!

Old Greying Accountant wrote:

...  if you can pass the ICAEW exams, does that mean picking up the rule book is beneath you?

 

internet forums are useful for banging out a quick question and getting a response from people in the know ... yes i could find out for myself ... but i didnt!  i get a quick response that i can then choose to follow up if it sounds like its worthwhile.  all i got from you was a couple of sarcastic answers that were unnecessary.  just "chillax" mate ... LOL

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By Old Greying Accountant
03rd Aug 2012 00:17

Me, I'm chillaxed ...

... but rules like client money rules are the things that set CA's over the qbe's.

Admin on a client account is no great shakes. I have had 3 ACCA visits and no problems with client account.

Internet forum maybe, but the questions you ask tell more about you than the answers you give!

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03rd Aug 2012 07:07

to my face?

OGA ... 

 

there's a meeting on 10th october of aweb peeps ... i'm sure i saw that you are coming along.  why dont you introduce yourself to me, and we can continue this discussion face to face?

 

i wonder ... if myself and another aweb member were at the bar having a pint ... discussing the subject above, would you butt into our chat with a sarcastic comment?  somehow i doubt it. yet there is a certain type of person that is quite happy to be rude to others from behind their screen, but almost certainly would not have the guts to speak like that face to face.  when we meet you can tell me what you think of the questions i ask and answers i give - i'll be very interested to see how you conduct yourself - my guess is rather differently to when posting!

 

i  suspected that ICAEW would have rules around client monies ... and i was right!  but when someone on aweb seemed to be suggesting otherwise, there's no harm in querying that.  this is a forum - people ask questions when they could find the answer out themselves all the time - if you need to post sarcastic responses to people asking questions that you think they should already know the answer to, you'll spend a lot of time doing that!

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03rd Aug 2012 08:03

ACCA client money rules

AFAIR

ACCA require a client account for anything other than advance fees, eg so tax refunds must go to client account.

Advance fees can go to practice account.

After many years, and following a intentional downsizing, I've now closed client account and hope to work without - I have no interest in administering clients tax refunds for them.

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03rd Aug 2012 08:41

balancing admin with faster payment from clients

girlofwight wrote:

AFAIR

ACCA require a client account for anything other than advance fees, eg so tax refunds must go to client account.

Advance fees can go to practice account.

After many years, and following a intentional downsizing, I've now closed client account and hope to work without - I have no interest in administering clients tax refunds for them.

 

this is what we do - fees on account go into our practice account.  if there was no requirement for a specific client account, i could see a clear benefit of being able to receive tax refunds into our bank, net off our fee, and send the funds onto the client.  we get paid earlier (usually - depending on HMRC refund timescales!) but the admin side puts me off.  if we had significant debtors then could be worth the hassle to get the cashflow benefit - depending on how many clients receive refunds. thanks. 

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03rd Aug 2012 08:40

I did that, too @girlof wight

For me, a client account is more trouble than it is worth.

Also, I prefer to get paid before submission, and I dislike having to rely on HMRC to get my fee. :)

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Out of order OGA ...

If everyone on here took the trouble to pick up a book before posting then it would be very quiet indeed! The whole point is to bounce questions of each other just as you would in an office. It was quite clear that Lancsboy was politely questioning a response which was not in accordance with his own procedure or understanding ... perfectly valid use of AWEB.

In answer to the OP ... I collect all fees by DD in monthly instalments running April to March for all business clients. Thus some pay a bit in advance and some pay a bit in arrears depending on when their YE / willingness to provide records. In total my debtor ledger balance hovers around the zero mark which is nice!

 

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03rd Aug 2012 21:04

Good grief
Well if we all stick to the rule book, life would be quite boring indeed ;)

Lancsboy- I'm afraid there are quite a few on here that will give a sarky and non-helpful reply. I usually find it's the ones who are past it and probably need to retire. BTW, I'm neither ACCA or ICAEW.

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04th Aug 2012 07:40

keyboard warriors

hannahaston wrote:
Well if we all stick to the rule book, life would be quite boring indeed ;) Lancsboy- I'm afraid there are quite a few on here that will give a sarky and non-helpful reply. I usually find it's the ones who are past it and probably need to retire. BTW, I'm neither ACCA or ICAEW.

 

... yes, i agree.  there's a certain type of person that feels brave behind a PC ... would they say what they do in a face to face scenario?  not on your nelly ...

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By Old Greying Accountant
03rd Aug 2012 23:14

Not staying I stick to the rule book ...

... but I do know what it says - a big difference!

I wasn't being "sarky" - I am truly appalled that an ICAEW would have to ask the rules on clients monies, especially one touting for lucrative A1 clients, and it begs many questions.

No idea how the ICAEW carry on, but the handling of clients' monies is one of the main areas of concern during ACCA monitoring visits.

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04th Aug 2012 07:50

keep digging mate

Old Greying Accountant wrote:

... but I do know what it says - a big difference!

I wasn't being "sarky" - I am truly appalled that an ICAEW would have to ask the rules on clients monies, especially one touting for lucrative A1 clients, and it begs many questions.

No idea how the ICAEW carry on, but the handling of clients' monies is one of the main areas of concern during ACCA monitoring visits.

 

i DON'T know the detailed ICAEW rules about dealing with client monies - why would I, since i don't hold client monies?

 

i didn't "ask the rules" about client monies - i asked a specific question - and got any answer.  like many who use forums, i then followed it up by checking for myself.  it was a simple query that i received a simple answer to. 

 

i'm quite happy with my own practice - thanks - and my "lucrative A1 clients" also seem quite happy ... LOL

 

like i say ... feel free to introduce yourself on 10th October - we'll see how brave you are then!

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04th Aug 2012 09:03

Out of order, Lancsboy

Challenges are not the way to sort a disagreement. Why spoil a good evening? There are others to consider.

 

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04th Aug 2012 09:59

If it were all done face to face it probably would not be a problem because no doubt everyone has a cheeky expression, or wry smile, or is jovially sarcastic in a way that face to face would not be taken seriously and would amuse both parties. Trouble is that on forums people cannot see this so indignance can set in, or appear to. Perhaps these guys are being jocular and mucking about. I think it will end on October 10th with some banter and a few drinks and probably an apology from both sides that they didn't want to ruin an internet forum or a night out for all. Five minutes into the get together they will laugh about this wont they?

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By Old Greying Accountant
04th Aug 2012 11:14

I struggle to understand ...

... why honest opinion gets labelled sarcasm, and I find infantile threats quite purile - why do I need to be brave, what will you do, hit me? - that's mature and professional!

 

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05th Aug 2012 08:04

not a threat, just a challenge

Old Greying Accountant wrote:

... why honest opinion gets labelled sarcasm, and I find infantile threats quite purile - why do I need to be brave, what will you do, hit me? - that's mature and professional!

 

not at all OGA ... the point is not to duff you up! ... its that people like you tend not to be quite so sarcastic when face to face.  posting sarcastic comments on forums is for cowards in my view.  if you haven't got anything constructive to say, why say anything? 

 

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04th Aug 2012 11:34

AddsUP2Me

I think you've hit the nail on the head.

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04th Aug 2012 12:19

Nothing wrong with sarcasm especially when done right. Being patronising is often confused with sarcasm and is less popular. Popularity on internet forums is unlikely as <cliche alert> you cant please everyone all of the time and if you get emotional then some will get keener and some will go cold. Exclamation marks give away more about someones feelings at the time of posting than simple words.  My Dad is bigger than your Dad and any variations on that when posted into a discussion will usually be funny to onlookers, such as my car is faster, I am more successful.

I propose to come along on October 10th in a gold bikini with a mud wrestling ring and my friend Sonia. Then any unresolved issues or hurt feelings or misunderstandings can be worked out in a proper manner. The offending words typed and what the person actually meant can be written across mine and Sonia's chests and then we can wrestle each other until there is a decider about which words meant what and what intention and mood everyone had and who is the rightest of the right (if desired).

It wont establish anything of importance but it sure will be entertaining and everyone will remember it long after who said what on the forums disappeared beneath the mud.

I am clearly not an accountant, advisor, legal eagle or anything important.
I will not lose clients or sleep over it.

I forgot to do exams because I look so fantastic in a bikini and am usually too busy having a laugh.

I will never be rich.

 

This is meant to be funny, but if it annoys people a little bit and they forget being annoyed by each other and turn on me in a flourish of unity that is all good too. So long as everyone holds hands and does the message board equivalent of kumbaya by the end of the thread I don't mind.

I have done enough opinion and thingies here to annoy people, especially as I have offended the most basic of unwritten forum  rules which is to write a shockingly long post with no real factual relevance to the purpose of the forum.

 

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05th Aug 2012 08:06

i think we all know sarcasm when we read it, but ....

AddsUP2Me wrote:

Nothing wrong with sarcasm especially when done right. Being patronising is often confused with sarcasm and is less popular. Popularity on internet forums is unlikely as <cliche alert> you cant please everyone all of the time and if you get emotional then some will get keener and some will go cold. Exclamation marks give away more about someones feelings at the time of posting than simple words.  My Dad is bigger than your Dad and any variations on that when posted into a discussion will usually be funny to onlookers, such as my car is faster, I am more successful.

I propose to come along on October 10th in a gold bikini with a mud wrestling ring and my friend Sonia. Then any unresolved issues or hurt feelings or misunderstandings can be worked out in a proper manner. The offending words typed and what the person actually meant can be written across mine and Sonia's chests and then we can wrestle each other until there is a decider about which words meant what and what intention and mood everyone had and who is the rightest of the right (if desired).

It wont establish anything of importance but it sure will be entertaining and everyone will remember it long after who said what on the forums disappeared beneath the mud.

I am clearly not an accountant, advisor, legal eagle or anything important.
I will not lose clients or sleep over it.

I forgot to do exams because I look so fantastic in a bikini and am usually too busy having a laugh.

I will never be rich.

 

This is meant to be funny, but if it annoys people a little bit and they forget being annoyed by each other and turn on me in a flourish of unity that is all good too. So long as everyone holds hands and does the message board equivalent of kumbaya by the end of the thread I don't mind.

I have done enough opinion and thingies here to annoy people, especially as I have offended the most basic of unwritten forum  rules which is to write a shockingly long post with no real factual relevance to the purpose of the forum.

 

tiddleywinks should do it ... me and OGA ... winner takes all!

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By Old Greying Accountant
04th Aug 2012 13:59

Yeah but no but ...

... I am not being sarcastic, I am honestly appalled that an ICAEW doesn't know the rules on client monies, especially one who spends all his time bigging it up as the great I am!

If you don't know the rules, how do you know they don't apply to you?

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05th Aug 2012 08:09

for the umpteenth time ...

Old Greying Accountant wrote:

... I am not being sarcastic, I am honestly appalled that an ICAEW doesn't know the rules on client monies, especially one who spends all his time bigging it up as the great I am!

If you don't know the rules, how do you know they don't apply to you?

 

i don;t take client monies ... so i don't know the rules around client monies - how could they possibly apply to me?

 

as for your "bigging it up" comment ... i suspect that's the real reason for your sarcasm ... along with the ACCA chip on your shoulder of course!

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04th Aug 2012 14:07

I believe you Old Greying, you had no sarcastic intentions and are sincere. I will fight Sonia until mud hits the ceiling to prove it too. I do not even know what an ICAEW is but brainy men are interesting to read. I hope I am forgiven for hanging around these forums when I didn't even get maths A Level, partly because I didn't even try. The minute they handed out Casio calculators at school it seemed a waste of time to me but I managed to write HELLO in upside down numbers.

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By Old Greying Accountant
04th Aug 2012 15:29

Did you not work out ...

... BOOBS as well ;oP

I think was where it all went so horribly wrong!

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By Old Greying Accountant
04th Aug 2012 17:55

Steve H

I don't expect people to pick up a reference book, but the rule book of the Institute under which they trade, yes, that is one of the main reasons people will choose a CA over a qbe!

And to answer other questions, I say nothing on here I wouldn't say to peoples faces, although I couldn't find Lancsboy2 listed on the register of members at ICAEW. As I have stated on many occassions, I use a nom de plume for commercial protection, and I will happily reveal my identity if required

As to 10th October, if you read my comments I said I would go if it was somewhere sensible for me to reach, I don't go up the Smoke except in exceptional circumstances. As far as London is concerned, I'm with Masefield..

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04th Aug 2012 15:50

LOL

There is a slightly naughty joke that us girls used to do in London.

Back in the days when men asked for your phone number and didn't put it in their mobile immediately, you could have a fibre-tip pen and write the number 770 5519 on a Rizla crossing the sevens.

There was then a chance they could find it the next day and read it from the other side and see the words "PISS OFF". It saved embarrassing a man with rejection or getting him upset if he looked a bit scary. Hopefully any that spotted it later saw the funny side.

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By Old Greying Accountant
04th Aug 2012 16:14

Addsup ...

... just so you know, (I)nstitute of (C)hartered (A)ccountants in (E)ngland and (W)ales. They are the posh ones that know everything, me, I am not brainy, I could only manage to be a member of the (A)ssociation of (C)hartered (C)ertified (A)ccountants, the poor man's chartered accountants.

Now, you may be an exceptional circumstance that could allow a trip up The Great Wen :oX, but you would have to promise to patch me up after Lancsboy2 duffs me up behind the bike sheds!

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"...for Liverpool is the town of my heart..."

Proper one or a woolly back?

Me, I'm a woolly back.

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By Old Greying Accountant
04th Aug 2012 17:53

Reminds me, saw a comment somewhere yesterday ...

Kent accountant wrote:

Proper one or a woolly back?

Me, I'm a woolly back.

... by a disgruntled Aberdonian, along the lines, Aberdeen, the only place where a sheep with its head stuck in a fence would be designated as an amusement park!

Wasn't quite sure what to make of that one :o)

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04th Aug 2012 18:53

I didn't understand this one!

Kent accountant wrote:

Proper one or a woolly back?

Me, I'm a woolly back.

Are 'outsiders' living in Liverpool called woolly backs?

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04th Aug 2012 17:04

Mud wrestling in nurses hats and stethoscopes, its on!

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