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Cloud Accounting / Professional Clearance

Handing over Internal Bookkeeping.

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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.

Replies (15)

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By Andy556
03rd Nov 2021 19:59

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.

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By David Ex
03rd Nov 2021 20:10

Self-Employed and Happy wrote:

Is it unreasonable to not transfer the license over?

Andy556 wrote:

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.

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Replying to David Ex:
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By Andy556
03rd Nov 2021 20:31

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

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Replying to Andy556:
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By David Ex
03rd Nov 2021 20:33

Andy556 wrote:

All the latest cloud software companies do. Xero, QuickBooks, Sage Cloud etc.

Ta. My ignorance then!!

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Replying to Andy556:
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By Self-Employed and Happy
03rd Nov 2021 20:58

To answer a few Questions.

The client knew about QBs as originally they were going to use it themselves (never happened), instead every Month I would be sent the CSV to import plus reports from their company appointment software, I would then just categorise everything, then at the end of the year they'd bring the folder with all the invoices so I could scrutinise items more closely / make sure I had invoices for items I had categorised as business expenses.

Whilst I have no problem whatsoever handing over a detailed Nominal Ledger showing transactions plus Y/E Adjustments etc it just strikes me as though what I have completed is internal (much like categorising CSVs via spreadsheets), therefore if information was needed at a later date it would be easier for me to bring this up from a read only file of QBs than trawling through Nominal Ledgers saved for each year.

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Replying to Self-Employed and Happy:
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By Andy556
03rd Nov 2021 21:08

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.

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Replying to David Ex:
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By mumpin
03rd Nov 2021 20:35

"Maybe my ignorance"

If you were to say "Modern life is rubbish", I would agree with you!

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By rockallj
09th Nov 2021 11:41

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.

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By JD
09th Nov 2021 11:56

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.

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Replying to JD:
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By Self-Employed and Happy
09th Nov 2021 12:49

This is where my feelings lie, our Ts & Cs under our heading "Retention of papers" states

"We will seek to agree a position on access to cloud-accounting records to ensure continuity of service"

On the basis the client themselves has never had access, then not handing it over does not affect continuity of service as the newly engaged firm can choose their own method of recording.

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Replying to Self-Employed and Happy:
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By Heating_installer
09th Nov 2021 17:17

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?

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Replying to Heating_installer:
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By atleastisoundknowledgable...
09th Nov 2021 17:41

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?

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Replying to atleastisoundknowledgable...:
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By Self-Employed and Happy
10th Nov 2021 09:17

Purely from the perspective that if there was a HMRC Investigation later down the line it would take me far less time to answer Questions if I have the QBs file myself than going through lets say thousands of lines of nominal ledgers that I could bypass with a click.

Like I have said before, if they had access, were raising sales invoices, were using it for the actual running of their business then I of course would never even question it as it would affect the running of their business (or per the T&Cs the "continuation of service").

It's just a question that has popped up because I wanted to know other peoples feelings on the matter, I guess it's an issue that will continue to crop up, someone earlier mentioned beefing up their T&Cs to cover this in more detail and we will be doing the same.

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Replying to Self-Employed and Happy:
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By Heating_installer
12th Nov 2021 23:02

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.

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By Rgab1947
10th Nov 2021 11:52

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.

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