I've recently had a new clioent approach me to take on their accounts and tax affairs. It's a new company and hasn't yet had it's first year end. They originally signed with another firm who prepared their business plan and helped with raising funding. However, this accountant was extremely slow at doing anything and has caused the clients loads of problems. They have had numerous arguments with the accounant over the length of time to do anything (4 months for business plan financials for example - and no, it's not a complicated business needing loads of work!). The relationship has got so bad that they decided to seek alternative help. I know one of the directors personally, so I know they are not a "problem client".
From the paperwork they have shown me, it looks as if they've signed a fairly standard engagement letter. However, the outgoing accountant has told them that they are tied in for a year and that there is nothing that they can do about it. This sounds wrong to me. Has anyone else come across this? Is it anymore than sour grapes?
For reference the outgoing practice is an ICAEW one.
stuart
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Engagement Letter.
Many contracts are structured so that the invoice and payment is done in twelve monthly installments via a standing order. This is more reliable than the standard practice of invoicing when work is completed and hoping it gets paid.
He might be obligated under the terms of the engagement to pay his monthly payment for the full 12 months, but he certainly can not be obligated to continue to use their services. If he wishes to discontinue payment, he should seek the advice of a lawyer before doing so, as a CJD would look bad for his company credit reports.