We recently lost a Business due to two Directors wanting to go their seperate ways, they owned 2 companies between them, neither are VAT registered as they trade below the threshold therefore no requirement for MTD.
Professional Clearance letter comes through and they are told we do the internal bookkeeping on Quickbooks, no photos on Quickbooks (they are in folders) just used as a simple categorisation tool so we can transfer easily to Accounting Software.
They ask for the usual Accounts / TB etc but also for QBs to be transferred to them, we haven't lost a client before but normally I wouldn't hesitate to transfer as most other clients have access to QBs and raise invoices / match income and have input etc themselves, however the client has never had access to this Quickbooks it's purely me being lazy etc, we'd rather keep the file as a read only back up in case of any future HMRC Investigations.
Is it unreasonable to not transfer the license over? (but to provide of course everything else requested in the Clearance letter)
In terms of "information" held about the client it's akin to spreadsheet working papers being held which we wouldn't all of a sudden just lose access to upon losing a client.
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Do you charge the client for bookkeeping? If so then it would suggest you should transfer the licence as they've paid you to carry out the bookkeeping on QuickBooks.
If it's just for your purpose then how does the client know you use QuickBooks for them?
If you are just transferring the clients own bookkeeping that they've done on spreadsheets to QuickBooks for ease to import into your accounting software then that's really your workings and not the clients. That would suggest you don't make any corrections or do any actual bookkeeping on QuickBooks. If that's the case then I'd give the audit trail of any adjustments made and not the licence.
Is it unreasonable to not transfer the license over?
If so then it would suggest you should transfer the licence ….
Zero experience of this but who is the licence holder? Surely no software business allows transfers? Or do they? Maybe my ignorance.
All the latest cloud software companies do. Xero, QuickBooks, Sage Cloud etc.
What usually happens is that the accountant signs the clients up to the software. The client and/or the accountant carries out the bookkeeping.
The accountant usually signs up to the software as they receive a discount on RRP and either profit from charging the RRP or pass the discount on to the client. So officially the accountant usually has the licence but the client is paying for it either as a stand alone recharge or included in the fees charged.
This is were the confusion comes from handovers. In my opinion the client always has the rights to their own bookkeeping so the licence should be transferred.
However in this case the OP is saying they only use the licence internally for ease with their systems and by the sound of it I've assumed no bookkeeping is actually carried out. The bit I'm confused about is if this is the case then the client would have no reason at all to know the OP used QuickBooks internally
All the latest cloud software companies do. Xero, QuickBooks, Sage Cloud etc.
Ta. My ignorance then!!
That's a tricky one then, speak to the client and explain why you think it's not their right to have it and hope they agree.
Sounds like a monthly bookkeeping job as you do it each month so if they pay you for that service then I'd personally transfer the licence. If they don't and you just do it monthly to make it easier for yourself at year end then you've got a case to keep the licence I'd think.
"Maybe my ignorance"
If you were to say "Modern life is rubbish", I would agree with you!
Sounds to me that the QBO is really your working papers and not the client’s data. So I don’t think you should transfer the licence.
The csv file *is* the client’s source document and should be made available to the new accountant and client.
First point of reference would be the engagement letter defining what belongs to who - we updated ours after having similar issues for what was being used as an internal tool.
If you were instructed to complete the book keeping, then reasonable for the client to request or have received the usual reports (that is what they may have paid for), but in my humble view you are no more obligated to transfer (the tools of your trade) the QBO licence than if you undertook your work on excel.
For my education as I may have to do this soon:
I assume that if the licence is transferred to the client or their new accountant, payment for said licence will become the responsibility of the new holder?
Do QB charge you to undertake the transfer?
If there is no financial downside for making a transfer, what data/info would the client see that was not in the paper/CSV records already made available to the client/accountant which presumably are generated from the QB file?
This is a good point - why don’t you want to transfer it?
My viewpoint is that it’s yours and shouldn’t have to, but why don’t you want to? Isn’t it less hassle than arguing over it?
So the data/books and the licence is the 'same' thing in QB?
In my bookeeping software (Solar) I have a licence for the software and can use it for as many books as I wish (3 - my company, property rental and our personal affairs), the cost of the licence being comensurate with number of sets of books in use under my licence.
Why not transfer the license? Sour grapes?
Its no cost to you and done in 5 mins.
Fail to understand you want to hang on to the license. I mean you cant use it for anything. Anyway I presume you have an accounting QB license.
Forgive me for jumping on this thread, was looking for some guidance from ICAEW or similar on this subject.
I have a new client and know their previous advisor used Xero to complete VAT with no client access. I will request transfer of the Xero subscription but expect this to be declined.
Any further thoughts/updates on the matter?
Is it a limited company and are these the accounting records of a limited company springs to mind. (CA 2006 s 386-289)
Not a limited company in this case; the argument "who owns the data" does feel relevant though