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Shoebox full of paper work

I have recently started up and all my clients so far have presented their bookkeeping in a decent state.  However I have just received my first shoebox of paperwork.  How much detail should I go into with sorting it all out? I believe I should  cross check all the invoices /receipts with what has gone through the bank.  Does everyone cross check like this or do you just try and post off the bank statement.    I am concerned that it is going to take me a long time to sort it out.  Also what if receipts are missing? Do I still post the payment but inform the client in writing to cover myself and advise for the future?

Any advice would be gratefully received

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By Anonymous
14th Jan 2010 16:10

.

You give it back, and ask them to go an bother someone who has just started up.

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14th Jan 2010 16:29

I like the first reply, but...

...this is the joy of small practice and your question makes me a little concerned; I am not an expert in anything (with the possible exception of practice marketing ;) ) but I know my incomplete records having trained at a local firm and worked for a number before setting up my "sausage factory" accountancy business in 2001. If you have a background in small practice you know you work from the bank statements and fill in the gaps from there, if you do not have a background in small practice, shouldn't you have got one before starting up on your own!?

Albert Camus

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By Tosie
14th Jan 2010 16:36

Incomplete records are a nightmare but you have to make some decisions otherwise the cost of the job will outweigh the value to the client.

I would list all invoices in Excel, write up and balance the bank. compare. If way out sort and filter in excel and see

how it looks. Are there more invoices than bank payments ? have they been paid for by cash takings

If the bank payments exceed the invoices I would use the bank provided ofcourse you are satisified that what the cheque book says is true !!!

Analyse the personal bank statements, compare drawings with known life style.

Build up a picture and if things look ridiculous call client in and discuss.

Otherwise prepare the accounts list the problems and make sure you get the client to sign confiming that you have made him aware of  the deficiency of his records. Assuming ofcourse that the records are deficent, just because they are in a shoe box does not make them deficient.

A word of warning if you want to do a proper job make sure the client knows how much the fee will be. It can take days to sort some of these jobs out and we all know that Joe down the road only pays his account £25 a year for the same  job.

 

 

 

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14th Jan 2010 17:56

Give them a template ?

If you can devise a suitable system, you might be able to ask the client to resubmit the shoebox in your requested format - train them up.

e.g.

invoices and receipts separately sorted month-by-month in plastic transparent folders [http://www.staples.co.uk/new-products/office-supplies/economy-folder-25-... - you can write mm/yy on the folders with a magic marker.

(Or add 5 hours of time onto the bill and accept the shoebox !)

 

Plus any other simple organising that would save you "accounting" time ...

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14th Jan 2010 19:53

We've all been there

It's made particularly difficult at this time of year.

Do you bite the bullet and struggle on with it to meet a deadline or do you pass it back, risking the ire of the client?

I think you need to define how you want your practice to be. Once you have done this, the answer will be easier to find. Without doubt, if you plough through all the detail youself this January and without any feedback to the client (I say 'feedback' to be polite), you will be doing the same work for that same client next January at a time when you will be even busier. Think longer term and have a fall back for such situations:

eg. I can offer you a discount is you do xyz, or I am afraid I will have to charge you more for doing xyz. Even better, I know someone who can do xyz for you and if you allow them to do it it wil surely save you £x on next year's bill.

But, please don't have your least favourite clients dictating what work you should do and for a pittance. If they really insist that you do work you are disinclined to do, you should at least be handsomely paid for it.

 

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By Viv100
14th Jan 2010 21:45

Start with the bank...

If you decide to do the job as it is, as Albert Camus says, you have to start with the bank.  And, yes, effectively, you have to cross-reference the all receipts/invoices to the bank.  There are, of course, quicker and slower ways of doing this, depending on your logic.

Personally, I mark up the bank statement and post straight from that.

Then, of course, you'll probably be left with a whole load of receipts/invoices that didn't even go through the bank (or have gone through a personal bank account, for which you don't have statements) that you have to account for...

Eventually, you will end up with a list of queries that you can go back to the client with.

Or you could do as others have suggested and hand it all back and educate the client...

I only have one client like this now, and they get charged a higher fee, for my effectively doing their bookkeeping and admin.

Viv X

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14th Jan 2010 23:58

Memories

Oh the memories.

When I first started out I had a large client who paid extremely well.  One day she came along saying that her son had been running a business for 3 years and had never done any accounts and the tax man was on his back.  Of course i agreed to help.  

He turned up with 2 suitcases both bursting at the seams with receipts invoices etc etc just shoved in.  

I'd just started and had no staff and an "office" (I use the term loosely) that, forget the proverbial cat, you couldnt swing a gerbil in this office. 

My wife, God bless her, spent over a week sorting this lot out into dates. It was spread all over the back bedroom floor (the furniture having been pushed against one wall). And, at the end of it all, it turned out he was making a loss.

Still, the money as useful, but ever since then I've had a distinct aversion to boxes of receipts.  

 

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15th Jan 2010 02:04

Some people try to make it difficult

New client wanted me to do his accounts.

I asked him if he had a separate business bank account - he said yes.

I smelled a rat!

I asked him if he used his business bank account for personal transactions - he said yes

I asked him if he used his personal bank account for business transactions - he said yes.

If it had been the above literally it would be fine but he meant he used both accounts for both kinds of transactions.

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By Anonymous
15th Jan 2010 09:26

Accounting background

Thank you for all your replies, they were very helpful. Re: Albert, I do not have a background in small practice, I am CIMA qualified and that is why I posted this question because I thought that one of the purposes of Accounting Web was to help each other and give advice.  I will always do a thorough job for my clients but just wanted to check that I was doing it efficiently.  Having gained a couple of clients from other accountants, I have been shocked at the standard of the accounts and these were from so called experienced small practices.  So I guess one should not be so quick to make assumptions, there are obviously both good and bad out there regardless of background. 

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15th Jan 2010 10:04

peanuts and monkeys

What you will find is that many accountants start up and then when they start employing staff there are a lot of people around who will work for very little pay. These accountants are tempted to employ these people without much regard to the quality of their work: peanuts and monkeys.

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15th Jan 2010 12:10

My bookkeeper manages to charge extra

I was embarrassed by one of my regular self-employed bookkeepers, who told me the other day that if a client brings in a bag/box of unsorted papers her fee is £250 up front for sorting it out. Then the clock starts running on the bookkeeping work! Wish I had the nerve to try that - she actually has clients who are happy to pay this because they can't be bothered themselves.

At the very least we owe it to clients to itemise our fees to show the charge for collating/sorting their paperwork separately from the fee for doing their accounts. If they complain about the cost, at least they can see how much they can save simply by doing some basic clerical work themselves.

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By Alfiex
14th Oct 2011 14:00

Charges

If I had a client who was a sole trader and he/she brought me a 'shoebox' of accounts, the charge would be £160 but that would include everything.

Sorting and turning it in to a set of accounts good enough to use for submitting them on to HMRC via the tax return.

Some may pay up front others pay afterwards.

Interested to see what others would do !

 

Alfred Lyons

Lyons Bookkeeping Services

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By Andy3T
15th Jan 2010 12:29

Train the client?
Keeping a simple cashbook with a few columns is not difficult, if your client uses excel set them up with a template and ask them to use 1 page for anything going through the bank and another page for everything else. if they are on pager get a cashbook pad and se tthem off, but recognise that it probably won't add up at the end.

Show them how to create the first sheet from the bank account, and keep a D-ring bonder full of the invoices in bank order.

They should with a little help be able to at least get the bank side then right, as they can see the numbers in the bank and make sure that they all go in, in the right amount, in the right order - a bank balance column with the rgith formula can even effectively do the bank reconciliation for you if you put receipts and payments on the same page.

The cashbook is more of a problem, show them how to put the 'left over' receipts in a D-ring, preferably stapled to plain paper to stop scraps falling out, each numbered so you can x-ref to the cashbook sheet and filed in date order.

If they can complete these two sheets then with luck you will save hours in future years.

How you charge for the first year is up to you, but preparing the basic books is does not require CIMA-grade qualifictions so I'd doubt you could recover if you charged full rates. Some clients might be happy do complete the work if you show them the first month, some will nod happily at your instructions, then give you another bag of random junk next year.

Good luck - and as others have said beware of missing cash income when you get to start the accountancy work, check their lifestyle, gross margins, etc and make sure that it all measures up.

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15th Jan 2010 12:47

simple set of rules

Rule One agree a fee up front.

Rule Two Get a substantial payment on account or even better get all of it paid up front.

Rule Three - DONT BREAK RULE ONE OR RULE TWO!

 

We had  a similar situation with new client in urgent need of sorting his piles out only to sort it out, get HMRC off his back and then have him slag us off all the way to the courts and lie through his teeth not to pay us.

Anyway rant over (and i feel much better now).

 

Dont forget it is not just about doing a perfect job and finding all the loose ends, you need to get paid as well otherwise you may not even stay a small accoountant for long.

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By Anonymous
15th Jan 2010 12:49

Bank statements
Hi

You say to start with the bank statement - but what if a significant proportion of the entries are personal ones?

Yes, the client should be educated for next year but what about current year? Is the time spent doing a bank rec really worth it?

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15th Jan 2010 13:18

Yes....

I would say yes to the bank rec....without it you can't really do anything meaningful - maybe that's just me.

Oh 'carrier bag jobs' as we used to call them.  How I loved them.....not.

I started in a medium practice as the junior and was always the one who got stuck with them.  I soon noticed the slightly sadistic grin on the face of the super who passed them on.  First year, it was an agreed fee based on what we knew about the business, grit your teeth and swallow the chargeable time heart attack.  However, after that first time, they were warned that the time would be charged 'on the clock', given a green grove cashbook and a lesson in how to keep it and asked sweetly and politely to try and make it easier for everyone.

9 times out of 10 it worked!

Good luck!

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By Anonymous
15th Jan 2010 13:21

This Worries Me Now

This areas worries me now. This is because I have a few clients (sole trader/partnerships) who really do not use separate bank accounts. To go through the bank accs and work out what is business and what is personal would just take massively long.

In the end, I ask clients for receipts and invoices. I base income and exps based on this.

Even where they have a business account they do not use it for business bank account they do not use this for business only.

I do not do a bank rec for these type of clients. I have tried and trained them. It goes well for month or so and then is back to their old ways.

How do others handle this, apart from saying to the client go elsewhere.

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15th Jan 2010 13:38

Don't get too upset

David

There's always one or two like that and it leaves a nasty taste but the vast majority of clients can be trusted to pay.

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15th Jan 2010 13:41

You decide

You have to make a decision which is the best way to go with a particular client. There isn't one way that will suite all. You may have to rely on documents with one client and another client you can work from the bank statements.

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15th Jan 2010 14:07

yes peter

but it isnt necessarily the lack of payment, it is all the smart **ses in the office who point out that they said he wouldnt pay months ago!

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By Monsoon
15th Jan 2010 14:14

shoeboxes..

"You have to start with the bank.  And, yes, effectively, you have to cross-reference the all receipts/invoices to the bank."

Spot on. Enter the bank into an accounting package (quickbooks, solar accounts etc). Sort through the receipts and match them to the bank. Sift out the ones that were'nt paid from the bank and pay them from drawings, as long as they were business expenses.

Then charge for your time doing so.

Extract a TB, produce a set of accounts and tax return, and then charge for that.

Or, as the original response said, give it to someone who wants it! :)

 

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15th Jan 2010 14:23

Three Little Boxes

Having come across the horrors of the bag/box/laundry basket of paper, masquerading as "books" I developed the three little boxes method  .

This also has three little rules.

Rule one - always get a receipt for every item of expense.  No receipt = no deduction

Rule two - always raise a duplicate sales invoice for sales or money received and mark whether it is paid in cash or by cheque and when.

Rule three - always keep the items from rules one and two.

Then open three boxes.

Box one - all receipts in respect of cash expenses

Box two - all receipts in respect of business cheque expenses.  All bank statements and cheque book stubs.

Box three - all copy sales invoices and paying in books

Not ideal I grant you, but as it cuts out actually keeping books it is easier to stick to.  If the client can keep a business only bank account then so much the better.

 

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15th Jan 2010 14:31

Shoe Box Angels

Try Receipt Angels.  Kay is the person to speak to.

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15th Jan 2010 14:41

What’s the difference?

“Enter the bank into an accounting package (quickbooks, solar accounts etc). Sort through the receipts and match them to the bank. Sift out the ones that were'nt paid from the bank and pay them from drawings, as long as they were business expenses.”

What’s the difference to ignoring the bank and just going by the receipts?

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15th Jan 2010 14:55

so that sorts it then

You are doing the bookkeeping by putting it in to an accounting package and then doing the accounts from the accounts package.

Whatever you do dont just produce a set of accounts and bill for a set of accounts, where is the clients incentive to do any books next year or the year after?

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15th Jan 2010 15:12

Extra fees?

The additional cost?  They might bugger off elsewhere, but maybe thats a good thing....  there was a previous thread on why accountant are losing money - part of the reason maybe - a heap of jobs they can never make a profit on.

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15th Jan 2010 15:26

The joys of accountancy through the ages

I cant help wondering how many would cope with life as it was when I was training.

Manually written ledgers added in our heads and balanced.

Computers were unheard of outside large companies, calculators still hand a mechanical handle at the side (two columns of figures and your arm ached), and we still worked in £sd.

Then there was the miners strike and the 3 day week.  Doing books late into the evening using a light hooked up to a car battery because the power was routinely cut off to save coal supplies.  Office juniors despatched to the canteen to boil water on a gas ring to make coffee while we raided the Board room drinks cabinet for rum or whisky to lace the coffee and warm us up.

National insurance cards where the self employed bought stamps weekly and stuck them on as proof they had paid.

The introduction of decimal coinage, then the introduction of this strange new tax called VAT.

And now you thing you're hard done to if you get a carrier bag of receipts?

 

 

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15th Jan 2010 15:40

Life moves on

As you say life has changed.  In all areas. 

The cost of opening the office doors has ballooned and an accountant, whether folks like it or not, is possibly, in my opinion, no longer looked up to in the same way as teachers/doctors/whatever with a due sense of awe and reverence in the same way they might have been in the past.   I think that goes for the teachers and doctors too! I think accountants were probably always looked on, especially by smaller clients, as a grudging necessity, but where there was probably still a sense of respect there once for the profession, society and the client base (dear Old Mr Smith the carpenter with his carrier bag of receipts has probably changed somewhat - I may well be wrong on that one) has changed with the times too and now really, REALLY begrudge paying for an accountant they a) don't really want, b) feel they can't afford, c) in some small client universes is lumped in with the 'eville' bankers.

I dare say in 20 years time people will look back on the golden age of the noughties (eeew I hate that word!) with fond affection and tell the 'yoof' that they have never had it so good and it wasn't like this in my day.

So to those who have survived, well done of course, to those starting out, good luck and I admire anyone trying.

I can't help feeling it's a bit narrow minded to suggest anyone without the experience of a type of job is some sort of rasher of wind (a saying of my nan's!) for making sure they are looking out for all the pitfalls of taking it on - just shows foresight doesn't it for not leaping in both feet first!

But maybe that was all tongue in cheek....  ;O)

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15th Jan 2010 16:03

Smile

Plenty of clients come to me and complain about their previous accountant - I take what they say about the accountancy and tax side with a grain of salt - being hard to get hold of, slow to respond, doesn't seem to care about them. Being friendly and interested in your client goes a long way. 

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15th Jan 2010 16:06

Yep

Indeed it does, but doesn't make their shoebox full of receipts any easier or less time consuming!

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15th Jan 2010 16:17

Carrot and stick

But if they like you they are more likely to make an effort to give you what you want. If it doesn't make any difference then charge them for it!

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15th Jan 2010 16:33

Why charge less for basics?

I cannot understand the idea of a qualified accountant not charging the full amount when doing "basic" work like book-keeping.  Almost all the "one man bands" I know of have a much lower charge-out rate than High Street practices - more typically £50-£100 per hour rather than the larger practices of typically £100-£250 per hour, so the fact that a one man band does a wider range of work is already factored in.  I charge £90 per hour and stick to it, whether I'm doing a bank rec or a business plan or a tax return.  Clients know the price when they join the practice and they can take it or leave it.  Yes, it gets expensive for them if they provide me with poor records or carrier bags, but that's their decision.  Funnily enough, even though some clients are charged absolutely ridiculous amounts by me, simply because they won't listen and won't improve their records nor bring them in sooner, they are still happy and still refer more clients to me.  I cringe when I think how I used to operate, discounting fees and forever being frightened of publicising my hourly rate, making apologies for it etc - now my rates and billing basis is the first thing I tell any new prospect, and no, I don't apologise or try to explain why it may appear to be high - it's simply fact, take it or leave it - most people are happy to pay it. 

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By Anonymous
15th Jan 2010 16:40

to welsh dragon

You have brought back memories but you have to admit that shoe boxes were rare in those days. In fact the firm that

I "served articles" with would only accept clients that were intoduced by a bank manager or a substantial client.

The only less than perfect  of job I recall was a small shop and two juniors were given the task of balancing the stock. They had to check through invoices to get the purchase price. This was after a lengthy physical stock take.

We also wrote copious notes about lack or receipts even if it was 3 pence or something the client had to have a receipt.

Value for the client was never an issue.

We used to lunch with the local district inspector who used to tell us who he was thinking of investigating and he would ask us our opinion. I remember telling him that a particular client would never attempt to defraud the revenue

as he was a member of the golf club !!! No investigation took place. (they were called back duty cases in those long ago days.)

No doubt the accountant was held in far more respect in society than now.

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15th Jan 2010 18:05

Happy memories

The most amazing incomplete records job I have ever been on was an ongoing almost permanent assignment for a very large (but now defunct) supermarket chain doing "bought ledger reconciliations".

Yes, they had a computer (although early days - striped paper and sprocket holes) but it was an excellent example of how much of a mess you could make with one. Weeks and weeks a team of us worked on reconciling the bought ledger - I have no idea how it got to be such a mess. Fortunately I only spent a very short timethere - some of my colleagues really lost the will to live!

In practice my own worst was a builder who brought three years worth of records in a black plastic bin bag. I'm afraid I showed him the door - I was (as it turned out correctly) doubtful about being paid.

I do have some very small clients who are messy, and I must say that some of them would find some of the suggestions above much too difficult. I try to work within my client's capabilities - in one case we have a diary on the seat of the car into which everything is written - takings, money spent, etc, with all of the bits of paper tucked into the pages. It's a bit rubbish but light years from where we started (I quote - "You mean I'm meant to write down the cash I get??"). But it has taken years. If I were in this to make a good living I wouldn't act for them - but I was at primary school with the client concerned and am too soft to say no.... I too have roped in the OH to sort piles of bits of paper all over the floor in the past - but it is rare these days as I've got them a bit more under control.

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15th Jan 2010 18:20

People were more honest in the "old days"...........or were they

he was a member of the golf club !!! No investigation took place. (they were called back duty cases in those long ago days.)

No doubt the accountant was held in far more respect in society than now.

 

Posted by Anonymous on Fri, 15/01/2010 - 16:40

 

I didn't realise belonging to the golf club was a good thing?  I've seen more dodgy deals done at the golf club than anywhere else.   I suspect that a lot of investigations were abruptly ended following a funny hand shake too.

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16th Jan 2010 10:17

Dogs and receipts

.......... I too have roped in the OH to sort piles of bits of paper all over the floor in the past - but it is rare these days as I've got them a bit more under control.

 

Posted by RebeccaBenneyworth on Fri, 15/01/2010 - 18:05

 

Back in the early days we had a total disaster. We had a big, soft, and utterly stupid Rough Collie (lassie dog).  My wife had spend 3 or 4 days sorting out bags of receipts from a local builders merchants.  They were in neat little piles all over the spare bedroom floor.

She went to the answer the door and stood talking to a visitor, then noticed the dog was not at her side. She realised she hadnt closed the bedroom door and returned to find one stupid collie laying in the middle of what looked like a hurricane in a paper shredder. Well, he thought he was helping !!!!!!!

 

 

 

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16th Jan 2010 17:32

.

Absolutely agree with Ken Howard's post to charge in full for all work in principle, what I have found with shoe box type clients though is that they don't want to keep anything near reasonable records but they don't want to pay for them to be sorted out either! With this type of client the options that I would consider would be:

 - Provide excel template and invest time training client how to use properly;

 - Accept current format and price accordingly;

 - Try to get the bookkeeping passed to us so we could do it in house making year end work minimal;

 - Try to get client to have internal bookkeeper if volume sufficient;

 - Say to client that unless solution is agreed by both parties then there is not a match and help them find an alternative practice that would suit their circumstances better so as to not part on bad terms.

 

 

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17th Jan 2010 12:59

Bulk job

Why not charge them by weight of unsorted paperwork ?!

Say 50p/gram ...!

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17th Jan 2010 14:08

Some clients never will have a clue

I got a new client who wanted to use MS Office Accounting. He brought the accounts to me and they were a mess. He needed the VAT return doing quickly so I did it from the vouchers he had.

I explained what he had to do in MS Office Accounting. He'd passed a foundation course in accounting and trained with a medium sized firm. He came to me again and the accounts were in a mess. I again did the VAT return from the vouchers he had.

We discussed it and he said he'd contact the Institute of Bookkeepers and get a bookkeeper. I phoned him and asked to see his accounts later but he never came round. He said these bookkeepers (he had more than one) said they were really good and could do his company's accounts and tax returns and his personal tax returns. Finally, at the end of December he came to see me. His accounts were due 31 January. They were a total mess. His bookkeepers would tell him that they'd submitted VAT returns and CIS returns but he'd get fined/penalties  because of non-submission. He blamed me for saying he could try the Institute of Bookkeepers. I explained that if he'd brought his records to me when I asked I could of told him about the problems. I also explained that he should had least look at what his bookkeepers said they were submitting and preferably submit it himself.

I advised him he should look at QuickBooks and if he wants I can enter his accounts on QuickBooks or use Excel if he hadn't decided. There really isn't many transactions. 

It's amazing how people can look at a debtors report and can't understand that it is supposed to be the amount they are owed. I ask what a negative balance means - they say they don't know.

I was given some accounts with turnover of £17k and very little activity. One creditor alone was supposed to be owed £135k! Also, they were entering supplier invoices and the other side of the entry was being put to creditors! They seemed to be oblivious to the nonsense that was being produced.

It's like if I tried open heart surgery and all my patients died but I thought everything was ok!

 

 

 

 

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By Anonymous
25th Jan 2010 13:48

Shoebox

Your first shoebox, well at least you've broken your duck now.

I deal with the bank statement and credit card first, and find appropriate receipts and sales invoices, then sort the rest presumably paid by cash excluding the usual private receipts as you go.

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By Anonymous
28th Jan 2010 17:00

Shoe boxes

If you get the client to sign up to online banking, they can download the credit card and bank statements into Excel, which saves time .

 

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By Anonymous
04th Feb 2010 21:53

incomplete records

When I worked in Clapham 25 years ago, the dodgy character in charge of the local fish and chip shop decided that a good policy was deliberately 'leaving' the invoices scattered round the fishy and lardy surfaces in the kitchen before giving them to me.

By the time the VAT man came around, they were very, very unpleasant. We had a frightening VAT visit due to the terrible records, and I couldnt stand it and so left him looking through them saying he'd take all day. Apparently he lasted about an hour, and I saw him in the bookies later that afternoon. For once, no VAT adjustments were needed. I learned a lot in that job. 

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10th Feb 2010 13:38

Bags of receipts / invoices

I am a free lance bookkeeper and have a few clients who use more than one bank account, especially in the current climate when they have been forced to pay bills from their personal account etc.

The only way round it is to use the receipts and invoices and it's usually impossible to reconcile to the bank accounts.

As I charge an hourly rate i don't mind receiving bags or boxes of receipts etc.  This is bread and butter to a bookkeeper and i have accountants who pass this stuff on to me!

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By Spudsy
10th Feb 2010 17:31

Bag or a box it's all money in the bank

Totally agree with Tracy hence the name of my website toake the rough with the smooth all make life a bit more interesting

 

-- www.bagofreceipts.co.uk

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By Anonymous
10th Feb 2010 20:30

bank accounts

A bank account has to be the basis of accounts preparation. Quite simply you need to know how much has been withdrawn from the bank to pay for all those horrible invoices.

then you need to establish how the cash payments were financed.

A book-keeper prepares the data the accountant makes sense of it.

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10th Feb 2010 23:55

Some reality please

"A bank account has to be the basis of accounts preparation. Quite simply you need to know how much has been withdrawn from the bank to pay for all those horrible invoices.

then you need to establish how the cash payments were financed.

A book-keeper prepares the data the accountant makes sense of it."

If people use more than one bank account, mix business expenditure and private expenditure in all the bank accounts and you can't tie payments out of bank accounts with documentation and the documentation doesn't show whether it's been paid by cash or bank I would suggest you are wasting your time.

Effectively, all the payments from the bank accounts are not matched with invoices so you have to rely on the supplier invoices exactly as Tracy explained.

What would you do differently?

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By Anonymous
11th Feb 2010 10:17

lost invoices

This type of client issue cheques and pay by debit card through the bank and the invoices disappear.

Apart from any other consideration the first thing HMRC do in a tax enquiry is examine the bank.

I write as a person who has conducted indepth enquires on behalf of other accountants and the main factor in not being able to challenge HMRC assessments is that the accountant did not prepare reasonable bank and cash reconciliations.

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11th Feb 2010 11:19

What is the point?

Wouldn't anything prepared by an accountant from the bank statements be a complete nonsense?

Payments per bank statement £xxx

less: Invoices known to have been paid via bank £0

Unexplained payments per bank statement £xxx

You could have many such statements which add very little of use.

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By Anonymous
11th Feb 2010 12:38

Helpful Peter

Your response is helpful Peter.

What about Ltd companies where again business and personal is mixed up!

 

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11th Feb 2010 13:53

Different rules

If it is a limited company then you would have to do whatever it takes to get the information, eg. get returned cheques from the bank. Anything that cannot be explained should go to director's loan account.

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