Problem Client

Problem Client

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Hi folks

As a new company, I find it useful to post questions as the people who reply, tend to have been there, done that and got the T-Shirt, so I'm hoping somene will have come across this before.

We provide bookkeeping and payroll for a number of clients and on the whole, they are all pretty good, they all pay as soon as we give them the invoice, except 1 who pays according to Sage on average 53 days from invoice date.  It's not a fortune, around £150.00 - £200.00 per month, depending on how much time they want to spend chatting about everything and it's dog, which we bill them for.  Basically we turn up start the bookkeeping and they bring us a cuppa and chat about anything for 20 minutes or more.  Their choice.

Anyway, we took them on in May this year from their accountants who did bookkeeping for them, but put no narratives on anything they posted and the entry date was always the same, last working day of the month, so it looked like nothing happened all month them on the last day, all payments were made, all invoices issued and all suppliers sent in invoices.

Payroll although weekely, was done as a monthly payroll, which would have been OK had the NI and PAYE matched the payments made to HMRC for the quarter.  As we only had access to the accounts program and not payroll, we couldn't tell what the actual situation was. 

We wrote to HMRC as they claimed there was an underpayment a few weeks ago and gave them the payments made as per the bank account, not as per the accounts as the 2 were not the same.  When I say not the same, Sage Accounts would show 3 payments for a quarter of £643, £719 and £435 as journals.  When the reality was 1 payment had been made for £1,779.  So it was this sort of thing.  We think it's a transposition issue with this particular examples payment.

Anyway, everytime we turn up at the clients recently, we just get a load of verbal.  How incompetent are bookkeepers we can't tell what is wrong and it's our lot that have created this issue.  I've explained to the client, we have data on the accounts we can't verify as the accountants wont send us a backup from the payroll system or any reports and we can't tell what exactly has been paid to HMRC for the 2010/11 tax year until they write back to us. 

I've explained we will do all we can to resolve the issue, but we need to give HMRC time to respond.

HMRC sent a letter to the client last week, and my partner got an email from the client which as she said, we didn't cause this mess someone else did.  The client was effing this that and the other and basically called us incompetent, which my partner took the hump with.

Since we took over, all the accounts are up to date as best as we can make them as the client wont authorise the expense for us to go through last years accounts to check them.  I'm not happy with so many payment on accounts, which indicate invoices are missing.  I started to go over the accounts in my own time to be told by another accountant, "don't be a bl**dy idiot".  so I stopped.

My partner wants to ditch the client, but I see this as a permanent revenue stream and having been to footie matches, I've heard worse and now she wont go to site, I am going to go instead.

Has anyone come across this before and how did you resolve it?

I feel the accountants should be having the conversation with the client, but as he's not their client they've told us, we need to deal with it.

Thanks for your input in advance.

Jon

Replies (6)

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By Moonbeam
16th Oct 2011 19:40

Say Goodbye

This client is the potential nightmare client. You need to deal with them firmly. Ask them verbally to get their accountant to send you the Sage backup from last year. If the client has paid the accountant (have they, or not?) for this work, then they are entitled to this information. If the client hasn't paid their accountants, you won't get the backup and it may account for a lot of the problems you have at present.

Send the client an email which they can forward to their accountants asking for last year's backup. Most of my clients are book-keeping clients with separate accountants, and many of the accountants just won't respond direct to me, even with the client authorising them to do so. It is therefore quite normal for me to email the client what I need from the accountant and for the client to pass that email on and chase it if necessary. I have never had a problem getting the information by this method. By the way, if you've got problems with the client, in my experience their accountant will never help you out. You're on your own, so accept it.

If when you visit the client, they insist on a chat, then you must discipline them to accept that you have only so much time to spend with them, otherwise they will think it unfair that you are billing them for this time - yes - that's life! I used to visit a client once a year and had a good old chat with his wife about all sorts of non-business things. I then showed a deduction for that time on my timesheet to make it clear that the chat was as much for my benefit as it was for hers. If I had not wanted to chat, I would have politely reminded her that I only had so much time available and I would need to get on with things.

I know it's hard accepting all those missing invoices, but if you've tried hard to get them and they aren't there, just post an invoice T9, against each payment. If the client can't tell you what the payment is for, put it to Director's Loan. If they are on cash accounting,you should be posting payments on a/c as T9 if you can't find an invoice for them to match to. If you get the invoice later you can edit the payment line accordingly.

Give the client a list of missing items every month and make it clear that they should provide these invoices in case there is an inspection from HMRC. If they don't do that, it is the client's problem, not yours. Anything looking remotely personal should go straight to Director's Loan. Give them a printout of that account at the end of the year and ask them to justify, in writing to you what the item is that they claim is a business expense.

And finally, believe me this is not a permanent revenue stream, it is a looming bad debt. The client's behaviour towards you indicates to me that he/she acts like this with others and has got away with it so far. It is bullying behaviour and you must set up boundaries such as I've suggested to make it clear that stepping over those boundaries is unreasonable. In about a month's time they won't pay the bill and you'll be 2 months in arrears with fee income from them. Get out as soon as you can while making sure they pay you.

I spent the first 10 years of my business life in the small claims court, suing extremely abusive, sometimes violent clients. I always won, but it ground me down. I can now spot these people a mile away. Just half an hours chat with a prospect tells me what their attitude is likely to be. Anyone I don't like the look of, I reject. (Most people are lovely, of course).

So in conclusion, give all your clients rules to live by. Many of them are thoroughly disorganised and are looking for a quasi parent figure to sort them out. That's who you need to be in some cases. One of my clients said to me recently "You like your job, because you boss us all about!" He was joking, but he was right. And they need a boss.

Thanks (4)
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By dollop
16th Oct 2011 20:08

PROBLEM CLIENT

 

This is an ideal opportunity to (possibly) convert this client to a good, loyal  one . 

Clearly they do not understand what you have done and are just venting their frustration on you.

Try managing their expectation by setting out what your responsibilities are and what theirs are. Our relationships are two way and the client must be aware of their obligations.

An honest exchange of views will either see this relationship sealed or lead you to tell them to go. Don't be afraid to ask what they dont  like about you or your service or how you can improve your service. They will appreciate your honesty and desire to please, however , you are not a doormat. 

 

 

 

 

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By Steve Holloway
17th Oct 2011 08:47

27 years of my life was spent at football matches ....

but that doesn't mean the language you hear there is acceptable in business life. If your client is doing as you say then they are not showing you respect and without respect it can never work. I'm with Moonbeam ... bad debt waiting to happen.

Thanks (1)
Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
17th Oct 2011 09:41

Say goodbye

Your partner (along with Moonbeam and Steve) is right - this is not acceptable, tell them to go do one. Possibly not in those terms, but I would not put up with this. There are plenty more clients out there - you don't need ones like this.

Just get rid, I'm sure you won't regret it.

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By ShirleyM
17th Oct 2011 09:41

I'm with Moonbeam & Steve

First impressions are that you will never get any cooperation, respect, or appreciation. Get rid!

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David Ross
By davidross
18th Oct 2011 13:06

Client may be a sexist pig

Several times in my life my Tax Office and other colleagues and my wife have been badly treated by men. When I have gone in I have been treated fine. Some blokes are just pigs.

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