We operate as a micro home-based practice and I am an AAT Licensed Accountant.
We have a couple of larger bookkeeping only clients who are pushing us to deal with supplier payments using their online banking HSBC/Lloyds.
I can see that this has been discussed before, but things are moving fast, and I wondered if this was becoming more common?
Most of the comments on the previous threads urge caution and I will be contacting the AAT and our insurers to confirm their position.
AAT say this about client monies:
A firm sometimes has a power or control over a client’s own account. Even though this does not strictly meet the definition of clients' money, the firm must ensure it has the specific written authority of the client acknowledged by the Bank before exercising that authority, and it must maintain adequate records of the transactions it undertakes.
Ideally, we could go as far as setting up payments on a client’s system after they have been authorised through the usual procedures but leave it for them to press 'pay' as final authority. Is this possible with HSBC/Lloyds or are we OK to press 'pay' following an audit trail of directors’ authority and assuming the correct bank authority is in place?
I know that Xero works with Transferwise to make supplier payments and I guess that payments will be made direct from the software in the future so I expect bookkeeping client's may want their bookkeeper to make payments in the future.
There appear to be quite a few larger outsourcing offerings of a full accounting function or purchase ledger management (including payments) out there.
It would be great to hear from anyone doing this for clients under their general practice (if permitted) and any other comments regarding best practice and risk management.