Our ex-client limited Limited company is refusing to pay our invoice of £3200 as the new accountant has mentioned there were errors in the accounts.
The new accountant has sent a list to the client which has been forwarded to us by this ex-client. Errors mainly involve the director loan account where we believed they were personal expenditure at the time due to lack of information and secondly there were some items that questionably should be under revenue expenditure and not capital. Unfortunately the client wasn't really helpful at the time and information was provided at the last minute. Client has signed the accounts and the luckily the letter explaining some of the figures in the accounts.
Could we have done a better job ? Most definitely if the infromation was sent when we had requested it three months earlier instead of a week before the accounts filing deadline and the client was more helpful. Certainly we would have recitified the "errors" if we had continued the engagement. The problem is the client is unwilling to negotiate and refusing to pay anything. I am im fine if the client wants to deduct the amount for any rectifications in the accounts.
I am now seriously thinking of taking the matter to court but now it is not clear cut even though we have done the work and acted reasonably in this very difficult engagement plus we have a lot of other evidence. We never even charged for all out time and want to get paid. This client is also being rather obnoxious.
It is a lesson learnt but I don't think as an accountant would be helping the client to pinpoint faults if it was the other way round. I would just be concentrating on getting the balance sheet correct.