Accountant giving training to clients -chargeable?

A client's bookkeeper left part way through the year and I have given training.

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A client's book keeper left part way through the year, leaving him in a tricky situtation as he lacked both time and skill to carry out these tasks himself. He employed his daughter to maintain the business records using the accountancy platform that was in place when he had a book keeper. We provided hands on training to the client and took multiple follow up calls from his duaghter asking questions and to make corrections to her errors. We have come to bill this time off but they client feels that it shouldnt be charged and be treated as goodwill/ included in his annual accountancy fee. Has anyone else been in this situation? How was it resoloved? 

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By David Ex
13th Sep 2023 12:10

Unfortunately, your goodwill is being abused. Unless it was a trivial amount of time (which clearly it wasn’t) why should you do it for free? It’s clearly nothing to do with his annual accounts. Easy for me to say, but stick to your guns.

Hindsight is a wonderful thing but you should have agreed extra charges up front.

Good luck.

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By JRX
13th Sep 2023 12:25

What does it say in your letter of engagement? Did you update the letter after being instructed to carry out this work?

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Replying to JRX:
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By Bridgebl01
13th Sep 2023 12:52

No update to the engagement letter was done, it was dropped on us at the last minute and needed dealing with straight away.

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By B Roberts
13th Sep 2023 12:42

What business is your client in?

If a builder quotes to build a wall on the basis that you will dig the foundations - then you say there is a change of plan and ask them to dig the foundations, would they do it for free?

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Replying to B Roberts:
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By Bridgebl01
13th Sep 2023 12:55

manufacturer of machine parts

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Replying to Bridgebl01:
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By adam.arca
13th Sep 2023 13:22

So make the point to your client that him asking for free accountancy is like you asking him for a job lot of machine parts (and not just a job lot where the sales value is equivalent to your fees but a much larger job lot where your client's profit would be equivalent).

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Replying to Bridgebl01:
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By B Roberts
13th Sep 2023 16:11

Bridgebl01 wrote:

manufacturer of machine parts

Thanks - ask him what would he do if one of his customers asked him to train them how to manufacture machine parts for no charge?

Also, if they then mess up the manufacture of those machine parts that they will put it right for them (again, at no charge of course).

He will look at you as if you are mad!

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By ireallyshouldknowthisbut
13th Sep 2023 13:47

Whilst this won't help here, next time you must ALWAYS explain to a client when extra fees are incurred, ideally before hand, but sometimes its "in the middle". A simple "this is taking a long time, is it OK if I put this on the clock outside of our fees?" will do. Sometimes you might only do that from the point you say its extra.

The main risk here is you damage all the goodwill from training the daughter, and I would focus on the long term here.

I would approach this first with an apology that you failed to make clear this was an 'extra', and then point out the amount of hours taken vs what you normal spend and why its material. [Or uses Adams's approach] Stress you value them as a long term client and see what they say. I would not start with it, but be open to negotiation on discounting the bill as a goodwill gesture.

It all comes back I am afraid to not setting expectations at the start, which to be fair is sometimes hard to do, but still needs to be done.

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By RobbieT
13th Sep 2023 15:31

Most certainly chargeable. Fair play to the client for trying to get a freebie, but training is (I assume) outside of your contracted services in your LoE, and one hopes there are words saying anything outside of the contracted services (say, prep of accounts & CT) are chargeable separately. Hold your ground, but use it as a "learning opportunity" - ensure your LoE has provision for a charging basis of non-contracted services, AND that you don't start separately-chargeable work ahead of 1. identifying it as such to the client and 2. agreeing a fee basis. I doubt there's an accountant here who hasn't been caught out by issues of this nature.
If the client sticks to their guns, I'd be strongly hinting at a disengagement.
FWIW I have a menu of services with prices / rates that prescribes a charging basis for non-contracted services, and forms part of the single-document, so they can't say they weren't advised in advance.

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By FrankTax
14th Sep 2023 09:18

100% chargeable

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By OldParkAcct
15th Sep 2023 09:09

Write it off and use it as a lesson for the practice.... never start work without first agreeing what it is going to cost and when it is going to be paid.

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Donald MacKenzie
By Donald MacKenzie
15th Sep 2023 10:13

This is an example of why fixed fees are not always the best way forwards. Why on earth should you do work, not included in your expected workload, without charging.
My invoices to clients can go down or up in any given period. It depends what I do for them.

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John Hextall
By John Hextall
15th Sep 2023 10:21

That's a tricky situation. Why did the bookkeeper leave? It sounds like he is a bully and if you cave in, he will get worse. Stand your ground, maybe with some nominal concession. You did bend over backwards to help him out rather than holding him to ransom in his hour of need (which is probably how he would have looked at it if you had done the right thing and agreed the extras in advance). Maybe his fees have to go up next year. Good luck!

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Morph
By kevinringer
15th Sep 2023 10:34

Trivial amounts of time I write off/include in the annual bill. Anything more than than trivial I charge for because we are being asked to supply more services than we had previously agreed/contracted. Why should the accountant be expected to train clients' staff free of charge? If the client doesn't value your time and insists training should be free, I'd tell them to obtain their free training from elsewhere.

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By Husbandofstinky
15th Sep 2023 12:52

Been there and done that.

I know many would charge and honestly I think you should. However, despite spending plenty of time with these jobs (training spouses for the BK), I find it pays back in dividends (assuming long term client) and have not charged them for it directly.

Indirectly they are the same fees plus and annnual accounts are now an absolute doddle and easy money. There's our pay back. Yes they could move on, but I reckon more fees have been recouped with grade A+ records, a TB post and check plus EOY adjustments following some decent time training put in from the outset. You could have it all and charge for both I suppose.

Just my take on it but I would also add the caveat on a client by client basis i.e. will you get your time back (and indirect fees) over the next couple of years. By year two easily covered indirectly I reckon and hopefully happy days going forward.

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By gphemy
15th Sep 2023 12:53

How much has the client "saved" by not paying his book-keeper?

... net of however much he is paying his daughter ... oh, my mistake, she is doing it as a favour for daddy. Isn't she??

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By SteveHa
15th Sep 2023 13:26

What does your client do? Ask for some of that for free, as a gesture of goodwill.

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By Tax Dragon
15th Sep 2023 13:37

Suppose the person you have trained makes a mistake. Suppose that costs the client. Do they have a case against you? Maybe.

And maybe you are not insured against any liability, because it's not covered by your engagement.

And maybe there's no cap on that liability, because your normal terms of engagement haven't been brought into play.

Whether or not you view this as scaremongering, it's a situation that's easily avoided. And, in avoiding it, you get a fee agreed up front - bonus.

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