Cost and worth.

Cost and worth.

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Just a quick question. I've been given the task of preparing the books for a sole trader. He has been trading since March 2012 although he had setting up costs prior to that date.
Unfortunately, he has given me all of of the paperwork, all of it in a muddle, basically 20 months worth of papers in a box, unsorted, weekly, monthly or otherwise. There is missing information including check stubs, bank statements etc .
It's a bit of a minefield. Just wondered if anyone had come up against this before and what a fair charge would be. My services include completing tax returns, business advice etc.
Any answers welcome!
Thanks,
Sarah

Replies (6)

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By Moonbeam
08th Nov 2013 11:27

Could be a payment on account job

I know the sort of client you refer to. Not only is the stuff in a mess, it will contain a fair amount of receipts for duvet covers, and other items not to do with the business.

First question is, what did your letter of engagement say? You did have a LOE didn't you? Second question is, what did you say it would cost? I think you are saying you haven't agreed anything yet, but I'm not sure. It's really essential to have something in writing that both of you have signed.

I would have a quick look through his bank account, noting the number of transactions per month. That would give me a flavour of how many transactions there are (unless, of course there are lots of cash ones). I would think about my last really messy client and estimate how much time it would take me to sort out a month, and then work out some sort of estimate based on that. I would then tell client "Because it's a mess I don't know what problems I'm going to encounter. I think I will need to charge (whatever figure you've come to) up front, and will need to take this from you before I start work. Depending on what happens subsequently I may have to come back to you for further funding."

If he doesn't like it, don't proceed. If he's OK about it, then put it all in writing and ask him to send you an email stating he accepts this. Await the funds on your bank account and then proceed.

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Replying to Matrix:
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By Sarah1606
08th Nov 2013 11:33

Firstly, thank you for your reply. The trader in question is my brother in law which makes things a little difficult as you can appreciate. No LOE but I did give him advice prior to his setting up and he headed absolutely none of it. Absolutely loads of transactions, cheques, debit cards both business & personal. Loans, debt agency payments etc etc. missing receipts, invoices, items purchased with cash which seems to have been growing on the magic money tree if you see what I mean!
As I said, a mess!

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By andy.partridge
08th Nov 2013 11:40

You need to tell him

Tell him it's in such a mess that it will cost him £X per hour just to put it in a manageable form to work from. Once the paperwork is in a decent state you can quote as you would for any other client.

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By Moonbeam
08th Nov 2013 11:41

Be Careful

I personally don't work for friends and family, so I don't have to worry about business problems complicating my personal life. Others on Aweb are very happy to work for family.

Do think about whether it's wise to proceed. You are going to have to lay down the law and he may want to walk all over you because you're family.

At this stage it would be relatively easy for you to say you would rather not get involved. If you want to be involved, you are going to have to be quite tough to protect yourself against both him and HMRC.

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By ireallyshouldknowthisbut
08th Nov 2013 12:16

.

One get out is to tell him you don't have the experience/knowledge/ability to do this type of work, and he wouldn't want you making a mess of it would he, because the last thing you would want to do would be to fall out with family over a work issue, so its best for the both of us if you get another accountant to do it.............and run like hell. 

 

Given you have already put all the time in upfront to explain how to do it, and you have been ignored it wont get any better.

 

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By Sarah1606
08th Nov 2013 12:52

Thank you all, lots to consider.

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