New clients

New clients

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What do you do with potential new clients...

OK this isnt entirely a sensible question but its after closing on the 31st and we all need a laugh!?

My question...just what do you REALLY say to a person who knocks on your door 2 working days before the 31st complete with a standard carrier bag full of invoices and wants you to be his accountant, and complete his accounts and tax return in 2 days flat???

It has happended to me on 3 occasions last week.

I politely spoke with them and said along the lines of 'it would be unfair of me to suggest I could help at all at this late stage' trying not to laugh/scream!

Funny how all of these individuals had awfully incompetant former accountants, who all gave them a second rate service and charged FAR too much!

Clients who'd bother with them???
Nicola

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By User deleted
09th Feb 2005 11:12

Do you really want clients like that????
Ultimately it depends on what type of client base you want to build a practice around.

Personally from experience those that come knocking on your doorstep in late January are generally never going to be a quality client.

If they cant be bothered to deal with matters on a timely basis the accountant is often the last to get paid and requests for information will not be dealt with promptly etc.

I'd rather have clients who appreicate my work and who work with me.

You can also be assured that those clients who are oh so quick to put down the past accountant as providing a bad service, charging too much etc etc will be saying exactly the same about you in a few years to someone else.

Good luck!

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By SimonP
09th Feb 2005 02:04

Maybe I'm a sucker ..
... but I have never turned away a client who brings his SA tax return along late provided he also brings his accounts paperwork as well. If it is a new client then I insist upon a payment on account.

Quite frankly, it really shouldn't take too long to estimate likely profits, erring on the high side, and file a provisional return thus avoiding the dreaded £100 penalty.

I realise I am maybe making a rod for my own back but why turn away fee income just to be bloody-minded.

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By User deleted
04th Feb 2005 18:08

New client
Re : unpaid fees comment "still a client".

In normal terms of business a "stop" applies to a customer with an unpaid overdue account.

So a bad client can choose in such circumstances to choose another accountant (and not pay them either probably) or try and string along the existing accountant.

An unpaid accountant can NOT be forced to continue to support a bad debtor, unless someone NOT in the real world is going to try and impose otherwise.

The only issue I see here is ensuring that the bad debtor client is made aware of withdrawal of support until such time as his account is in order. A good point for any engagement letter.

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David Winch
By David Winch
05th Feb 2005 11:55

Withdrawing support

Mark

You make an important point that the client is made aware that support has been withdrawn. Do not merely have it in the engagement letter, spell out what you are (not) doing when you withdraw support and explain why you are withdrawing (just non-payment or do you feel the client is doing something reckless, improper or even illegal?). Tell the client face to face and confirm it in writing.

I have seen directors of insolvent companies blame all their problems on their accountant who failed to advise them that they were heading for trouble. From the director's perspective all the company's problems stem from the accountant's failures - how were they to know that getting lots of orders and being so successful could lead to something they have since been told is 'overtrading'?

And, yes, they may have been a bit dilatory about paying the bills (including the one from the accountant) but no-one told them they could be personally liable to pay those bills, or that it could be a criminal offence and that they might go to prison for something called 'fraudulent trading'.

It is all that accountant's fault . . .

Don't let it happen to you, guys! It is not good enough just to quietly run away and hide when you foresee trouble, even for a 'bad' client! You risk having to defend your inaction to your PI insurers, your professional body or even in a court of law.

Even if you have done nothing wrong the waste of time and anxiety involved in defending yourself is considerable!

David
[email protected]

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By User deleted
05th Feb 2005 12:45

£100 Penalty Season
Yes these types are to be found everywhere at this time of the year wandering around like lost souls in need of salvation. The £100 penalty brings them all out of their hibernation.

First rule: Dont promise anything.

Second Rule: Is all tax paid up front anyway? No sweat then.

Third Rule: Probably most important. Dont do anything without security or money up front.

Fourth Rule: Tell them not to leave it so late next year or you'll charge a premuim- again!

Bye!

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David Winch
By David Winch
04th Feb 2005 09:24

Point for Stephen Quay - Money Laundering

Stephen

You will by now have seen the new client whom you mention who has been in business for the past 3 years without informing the Revenue.

You will have to give careful consideration to whether you are obliged to report this to your MLRO or to NCIS under section 330 Proceeds of Crime Act 2002 and regulation 7 Money Laundering Regulations 2003 (as well as dealing with the Revenue).

The new client's omission may amount to a criminal offence under section 144 Finance Act 2000.

The key question is "Did this client deliberately, dishonestly and knowingly fail to inform the Revenue that he was trading at a time when he realised that he ought to have contacted them?"

If the answer is "Yes" then (assuming that there is some tax liability arising from the trading) you have to report to your MLRO (if you have one) or to NCIS.

AccountingWeb has produced a money laundering CD aimed at helping you understand this legislation and ensure your compliance - further details are available here.

If you are an MLRO you can get confidential one-to-one email support, information and NewsAlerts from my website www.mlrosupport.co.uk.

David
[email protected]

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By David160
04th Feb 2005 00:14

Enthusiasm to help the bad debt client.
You say

As for blaming previous accountants, sometimes may be fair comment, but often it's a case of a previous accountant lacking two things :-(1) Money for unpaid fees and (2) Consequently enthusiasm to help the bad debt client.

As I understand it a client is a client until you formerly resign, or the client formerly sacks you. So if you lack enthusiasm for a client, (whether due to unpaid fees or not) and fail to do the work properly or on time, you can be sued for negligence, even though the client owes you money.

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Stephen Quay
By squay
31st Jan 2005 20:20

And Old Clients!
I had a new client phone up a week ago. He's self employed and been in business three years. Yep, he's never filed a tax return either. I politely told him no chance by 31 Jan and we arranged an appointment for Feb 2. He's bringing everything over so I can sort him out and get IR off his back.

But my reason for this post is the existing clients who repeatedly deliver their accounting records, shoe boxes, etc in Jan every year. I have three sole traders and a partnership to do and they know I won't touch them til Feb but every year it's the same. I can't understand why their so late when accounting year ends are 31/12/03 and 31/10/03. The accounts and returns can take a week to prepare each with all the book-keeping as well.

Still I shouldn't complain this lot will see me nicely through Feb and keep the cash flow moving in what could otherwise be a lean period.

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By User deleted
01st Feb 2005 13:59

New clients
Clients who have GOT THEMSELVES into a mess and want accountants to sort themselves out are seldom entirely free from blame.

So, a word of caution - will you get paid ?

It is not unknown for such clients to end up owing quite a lot of tax - and they might feel inclined to pay IR before you.

Get a standing order set up from day 1 or a deposit against fees.

As for blaming previous accountants, sometimes may be fair comment, but often it's a case of a previous accountant lacking two things :-(1) Money for unpaid fees and (2) Consequently enthusiasm to help the bad debt client.

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By Robert Clubb
01st Feb 2005 11:58

Caught Again!
It's the clients who come to you late, you help them by drafting their Return, you give them details of the missing information and they swear they will come back to you in hours........Then you never hear from them until they get the Penalty or Surcharge Notice.

They are the one's that really hack me off!

The more years you get of abuse from clients the less likely you are to respond favourably to the genuine case.

Never mind, only another 365 days to go before we will be in a reflective mood again.

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Stephen Quay
By squay
04th Feb 2005 12:31

New Client
David, yes I did see the the new client and no its not a MLRO case. He registered with IR under CIS in May 2001 which was the start of his self employment. They made determinations for 2001-02 and 2002-03 and are following recovery procedures for the tax he probably doesn't owe. I have a pile of CIS25 vouchers to sort. I am sure he will be receiving a refund when I've finished.

It's sad that he's left his affairs to get to this state but he has had a lot of personal problems and which I believe are genuine. When the tax determinations arrive they just get overwhelmed. We actually sat and opened several brown envelopes together. When I've sorted him out, which won't be too difficult, he should become a regular client.

In answer to the other respondents, he's bringing over a cheque on account in a couple of days and said when I need more just shout so I have no worries about being paid. He's never had an accountant before so no problems there.

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