Dear All,
As I am sure is the case across the board, recent announcements by the Chancellor have resulted in huge increases in requests for advice from clients. These range from simple "hand-holding" exercises to full-blown business plans to support loan applications and everything in between. Furthermore, in relation to local authority grants (and no doubt VAT and payroll support following today's announcement), my recent suggestions that clients contact the local authority have resulted in those self-same authorities advising that they contact their accountant - who has all the answers.
In light of the above, time which would normally be spent preparing accounts, tax returns and other compliance-related matters, is now being diverted. It is instead devoted to answering, researching and attempting to interpret the sporadic (and often scant) information being provided from "on high". Indeed, from Monday 23rd, I already know of a few clients who are looking for assistance with the provision of information in relation to CBILS loan applications. At the moment, it does feel like my only purpose in business is to be a professional advisor, financial advisor and HR advisor - all for UK Plc!
I know I will not be alone in this and realise that you will (pretty much) all be under the same pressure.
Now, here is the insensitive part! It is readily expected that professional advisors will assist their clients with navigating and understanding the daily changes in the protocol (that is, after all, our remit). It is also readily expected that such advice will be provided as part of ongoing service agreements. It is furthermore assumed that those same professional advisors will review their fee structures to assist struggling businesses (offering discounts, extended payment terms etc.). However, in reality (as a sole practitioner) I do not have the capacity to provide unlimited free advice and support. I am also unable to hold the hands of every business owner throughout this entire period (let alone to then discount or write off any potential fee income). Furthermore, at this stage, no element of any of the announced support packages applies to me, nor to my business so, the prospect of 3-6 months, working full time (and more) without any due recompense, is clearly concerning!
So, to my question(s)...
How are other accountants handling advice relating to Coronavirus? Are you simply providing free advice, free business plans, free cashflow forecasts (etc.) whilst taking the hit in-house? Are you charging clients additional fees for advice (I mean relevant advice, not generic advice) even though this could potentially be classed as unethical/ profiteering from others misfortune? Are you simply telling clients who to approach and (effectively) telling them they are on their own?
As I say, this is very insensitive and, in an ideal world, I would prefer to have unlimited time to provide to unlimited clients without any charge. Indeed, I do feel very sorry for everyone who is in an unfortunate position as a result of Covid-19. However, there must certainly be a limit to the help and assistance we are able to offer. After all, if we spend all our time attempting to freely assist clients with keeping food on their tables, who will then assist us in putting food on our own tables? We are accountants and most of us are not charitable organisations.
I look forward to hearing any thoughts on this matter even if the general response is just "there are many people in a worse position than me"!
Many thanks
Dave
***EDIT*** 21/03/2020 15:21
For clarity...
- I AM NOT A CHARLATAN! Quite the opposite in fact!
- I am not seeking to make a profit at the expense of vulnerable clients, am not seeking to kick people while they are down and am not trying to be greedy or profiteer from the unfortunate position our clients are in, through no fault of their own
- I, as I am sure is the case with many other sole practitioners, put clients first (all of the time), offer additional support (all of the time) and keep client bills to a minimum - just sufficient to keep food on our own tables
- I, as with many other sole practitioners, do not make huge profits, take grand holidays, drive flash cars, go for slap-up meals (even though many of our clients do!) and are only able to keep trading through making a modest living from even more modest/ non-existent ongoing fees
- I, as with many other home-based, single-person businesses are thus far ineligible for any of the supportive measures announced by the Chancellor (even though most of our clients are), and it has to be understood that these announcements will cause additional work for accountants
- Furthermore, on the subject of advice, I as with many others on here, always offer free advice - be it 5 minutes of the phone, 5 days preparing a report or 20 emails regarding HR issues. We simply "take the hit" out of our modest income. Indeed, for many of us, anything outside of preparing accounts, CT returns, tax returns, submission (not preparation) of VAT returns and submission of (not related advice regarding) payroll, goes uncharged - this can amount to anything from 2 to 200 hours per year! Clients just expect that picking up the phone, asking detailed questions, requiring additional works - is all part of the service! I, as with others on here would not wish it any other way!
- Indeed, my situation is slightly different because, I also offer a considerable amount of time on a pro-bono/ reduced basis to people who are struggling to get by and do not have the funds to, or do not wish to budget for, an accountant. It prevents them from ending up in trouble with HMRC! These are not clients who would approach (or be readily welcomed by) most large firms.
However...
- I do know that it is generally accepted by many other accounting firms that anything other than generic/ general advice does not come free. Yes, the odd 5 minutes on the phone doesn't go on the time cards but a letter, report or business plan does!
- This question is therefore whether it would be appropriate to charge for time spent in carrying out additional work that may be required for a client to obtain benefits, loans, grants, lay-off funding etc. Clearly, the usual questions would be asked... is there a benefit to the client, is the client in a position to pay, is it appropriate to charge - given the circumstances?
- Picture the situation where a client has huge reserves, the business will barely be touched by the outbreak (or even benefit from it if they supply hand sanitiser and PPE - I do know one - not my client!), will qualify for the £10K business rates grant, will be entitled to a 9 month VAT break/ 6 month SA POA break, will apply for a 12-month interest-free loan, and will see little (or no) difference in bottom-line profit. This is not a "struggling" client, but they will need professional time equivalent to 2, 5 or even 10 times their annual fees in order to receive the support measures they are entitled to. I agree the client shouldn't have to pay to get what is rightfully theirs and shouldn't be put out in any way in order that they may receive it and, as we are the only cog between client and authorities, and cost (time and fees) should, therefore, fall to us. However... if the client can afford to pay?!
Finally...
- I appreciate the calls for everyone to "do their bit" but, for reasons given above, I, and many other sole practitioners (and firms), have been "doing our bit" for many years and, as a result, do not have endless reserves
- I accept that it may be the "right thing to do" to discount, write off, offer payment holidays or work for no fees but the practicalities are - with many of my clients, the only way I could discount further would be to start paying them a retainer!
- I further accept that we have a moral and ethical duty to provide our services, without charge, until such time as the situation has improved (could be 12 weeks but, with a potential recession, could be many years)
- I also understand that any ongoing recharges of costs incurred for a client (e.g. cloud software subscriptions, annual fees paid, CH form fees etc.) should probably cease - i.e. we take the hit
- However, the practicality is... many sole practitioners are not taking a small hit on profit, they are taking a hit on the minimal income they need to "get by" (cheaply) - for the record, I live on substantially less than £10K per annum (in the North) - considerable less than the majority of my clients!
- I do appreciate that, to some on here, sole practitioners operating as I do, are viewed in a dim light. We are often seen as a thorn in the side of larger firms and are regularly held responsible for "de-valuing" the profession. However, please remember, and in "ordinary times" we take the clients you possibly won't (too much work for too small a fee). If we're not here, and we don't take 'em, they'll either fall below the parapet, cease trading, or fall foul of HMRC!
I hope this amendment has put a bit more light on the situation? I have previously been answering all (or most) of the posts in line with the above. However, I hope this explains in a little more detail the issue I'm getting at? It really isn't a case of "pocket lining" or profiteering! It's more about ensuring business continuity and basic living so that we are actually able to continue supporting clients throughout these uncertain times.
Kind regards
Replies (45)
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I would say with all due respect you need to get a grip and if you really care about your clients and fellow human beings start to provide whatever they need and forget about your own profit.
It might sound harsh but we really are all in this mess together and if that means you have to work a few extra hours so be it.
I was considering lowering fees nevermind increasing them, the fact of the matter is that if you take the attitude that you are going to charge more you will not retain clients and those clients may not survive this anyway.
Sorry to be so blunt but your question is wrong on so many levels imho
Thank you for the OP. It is a question. I had in on my mind as well.
I will charge for my time. I am running a business and I am not a charity. I cannot go to my local supermarket and not pay because we are in this together. Neither will I be exempted from paying my bills.
I do not expect to be charging for my time as I want to have a client base at the end of it.
With self isolation I will not be spending much money anyway and now all my holidays have been cancelled and the refunds coming in.
I know all of my clients personally and will do whatever it takes to help them through it and not make a charge for it .
Lets hope your clients that are left will think the same when all this is finally over .
I will not be charging any extra fees and expect to do a lot of handholding/applications over the next 6 -12 months with a lot of my normal monthly/quarterly fees being stopped/waived.
Sorry we are not charities or Gov with unlimited funds.
I can certainly not see the plumber to help with your internal flooding for free even where you are older or whatever. They are in business so not exactly an eldery cancer patient to whom I would show sympathy and do a freebie. We all presumably do pro bono work at times.
I will charge but will extend terms if they struggle.
I do send out info as I always do and never charge. But a budget and cash flow projections and what have you. No its work so is charged.
Hi Dave
Being a solo practitioner, I am in a similar position to you. I have sent out a mailing to all clients covering the details of the measures announced so far, and given clients links to where they will be able to get additional information as it is released. I have also included contact details of the Government’s Business Support Helpline (0300 456 3565), where I hope a number of them will go to ask various queries.
Beyond that, I am responding to individual queries, partly out of civic duty, partly out of loyalty to the client (and partly out of self interest as I don't want to lose the client). So far I have not had the impression that my clients are expecting "hand holding". Should a client expect more involved assistance, such as with business plans or cash flow forecasts I would certainly expect this to be paid work and would be weary of the credit risk of a client.
Whilst having sympathy for clients, and helping where you can, I do believe that you are entitled to factor in commercial realities and your own personal capacity when deciding on where you give your time.
I would also be interested in hearing other peoples approaches/thoughts.
Chris
Look to be honest there is going to be less work around no one is filing VAT returns, others will delay self assessment unless they are entitled to a refund, no one is going to be a particular bothered about other filings as well. None of us can do anything apart from work at the moment so might as well help others.
I am just calling clients to provide them moral support and see if there is anything I can help him with. Obviously I wouldn't dare to charge them for any advice.
Yes if they require a cashflow or business plans then will charge if they can afford it. If they are desperate then I may decide just to produce it for them free of charge. I believe if you do a good deed for someone it will come back either through this client or another way in life. Yes we have a business to run but there has to be a human element too when so many will lose their jobs and businesses to no fault of their own.
To be honest, anything Coronavirus related, I'm doing for free.
It feels like the right thing to do.
So you only currently charge 20% of the time you work? Again, I find it astonishing that fellow accountants put such a low value on their time. I do the odd bit, as I'm sure we all do, but if I found myself working a lot of hours that I'm not getting paid for, I'd seriously question my business plan.
hmm, in that case your original question was somewhat misleading as 99.9% of people on here will not be in the same position as you are and we can only respond according to our own circumstances.
All I can say, and I think I am probably fairly typical of other small practices, in a normal week I probably work average full time hours spread across the 7 days, that gives me a decent living. This week has been exceptional and I have been working 12 hour days. I will not be charging any more for that time.
I agree with Tim
We value ourselves so low, unlike to law professionals where hourly rates are set standard for all levels of staff and clients do not haggle.
This is one reason fellow professionals find hard to quote bigger fees because someone else is willing to take a lower fee in return for the same service even if it means working longer hours or poor service.
This is just my general observation, not targeted to the professional who wrote this article.
My thinking is that if I can do my bit to guide clients through this, then I will keep a grateful client at the other end.
I’m giving support & advice as best I can, in lieu of less work being done over these months.
We’re giving general advice where requested and pointing clients to other sources of information in the hope they will start to source information from there rather than ask us every time something else is announced.
Most of our clients pay monthly so we have given payment holidays to some clients in the entertainment & event industries and suppliers to them as their income has plummeted to virtually nil.
Not been asked to do any forecasts or cash flows yet, but it would depend on the client as to whether we charge for this, and if we deferred payment for doing them.
The tricky bit will be advising about some of the Rates based support packages before we have the small print (and possibly even when we do), there is scope to mess up and one has to ask whether , in the event of a client legal claim that poor advice was offered, that one could readily demonstrate appropriate qualification and training.
Loan applications, fine, pointing out what is available, fine, advising? -not so sure.
nonsense, you just tell people we do not have all the details, this is what we think will happen and refer them to their local authority
“
Following the suggestions in this post, I realise that many of you are ceasing to bill clients indefinitely and, I assume writing off all work in progress. Afterall, and in the eyes if many clients, our profession is a "zero-cost" business. Theee actions just reinforce that assumption. I will therefore do the same in the hope that SAGE, Iris, Associations, subcontractors, staff (not relevant to me) and other service providers will do the same. “
All very laudable, but you’re on a hiding to nothing. Do you think my professional body is going to waive my fees? We have to live through this too and put food on the table.
Precisely what I was saying, pointing out to them what is out there is fine but that is not advice re what they should do, advice is dangerous without full knowledge.
For instance if a client is considering , to save money, giving up a month to month lease, if they so do and it turns out the qualifying date for the £10,000 grant is after they have given up the unit, they lose, but if they carry on letting it as someone advised them about the grant and it turns out the eligible date was 21 March, they may have expended money on the lease they could have saved- without the detail re how and when one precisely qualifies beyond requiring at some point to be eligible for Small Business Bonus Scheme advice is not possible.
Surely this is all about balance. Most of what we have done so far will be for free and we all need to help one another at this time. However a client with £1m of cash who wants to know the result of paying off loyal staff? Maybe a fee? When we come to helping claim grants and 80% of wages, this will no doubt be on a case by case basis.
We are offering free advice to client and non-clients alike, all we have asked in return is for these businesses to make a donation to a local homeless charity or food bank, even if it cannot be done now, then some time in the future.
There is a bigger picture here than how much money I have in my bank account, so if we can help another business, we will.
May I refer everyone to an article I wrote a few days ago on this very subject. Please note: the article was written before the government announced its initiatives
"Covid-19 - helping clients through the crisis'
https://www.accountingweb.co.uk/practice/practice-strategy/covid-19-help...
in that article I pointed out that
"clients are looking for a guide. They want to know that there is someone there who cares about their business, so send an email round to clients, and phone any who do not email"
"Tell them that you will keep in touch and stress that they must do the same. The sooner that you are made aware of any problem, the easier it might be to solve especially with reference to HMRC payment"
and:
"As accountants, we are best placed to consider the financial impact that this outbreak will have on each of our clients' businesses and ours".
and most importantly..." If they go under then we also lose business".
>> I have written 4 blogs/notices so far and sent them round to relevant clients. I've told them that I am here and directed them to info on HMRC's website and the FSB site.
I've had a couple of clients ring in a state and in need of guidance and a sympathetic ear - one has worked it out that he has 5 weeks and that is it even with any loan (he's a bespoke kitchen fitter'). There is so much being announced, downloaded, emailed, said on Tv that its difficult for many clients to know what is what.
Sorry... no I'm not charging. Many of my clients have been with me for years and years. These are unusual distressing times, never encountered in the majority of our lifetimes and (hopefully) will never be met again.
Clients who get through this will remember your help and stay when things get better.
The USP given on nearly all accountants websites is ' we care about you and your business'.. now is the time to put your money where your mouth is as they say.
You should not feel guilty about making profits. I would not be so concerned about the opinions of others. They may have the luxury to be so charitable.
So these people who are providing help for free, are you saying that you have cancelled your monthly fees so that all income has ceased? Or are you talking about ‘only’ the clients whose businesses have had to cease?
I too am spending a lot of time helping clients at the moment and I have some huge decisions to make next week about who should still pay the monthly fees and who shouldn’t.
So far only one client has had to close, although I fully expect that to change in the next week.
How exactly do we survive if we stop taking monthly fees?
I’m just trying to find out what the consensus is this.
How exactly do we survive if we stop taking monthly fees?
Couple of options
1. Living off built up reserves and cut costs
2.Take the advise you are giving clients; get £10k rates grant, take out interest free loan.
Personally I wouldnt stop. If client asks will see if can reach agreement over the next 3 months.
Only have one client ask so far. They have rental accommodation that had dried up overnight and they want to cut costs so they can pay mortgages on them. Advised them to apply for 3 month holiday mortgage which is their biggest cost.
[quote=]
So these people who are providing help for free, are you saying that you have cancelled your monthly fees so that all income has ceased?
I dont see cancelling all monthly fees as an option at this stage, the clients need us more than ever to bring some sort of clarity to all the confusion and to help in claiming whatever they can. Therefore we need to survive.
In addition to that not all clients will struggle to pay so this has to be on a case by case basis.
The message I am getting back from clients is, "your payment is one of the essentials we will not be cancelling until it gets to the point where we cannot pay". I am sure other clients that we may not have a very close relationship with will be thinking, "thats one I can cancel but leave it for now in case we need them".
The other aspect is that the worst is yet to come and I can see big problems in a few months when we start SA season billing as 50% of our business is annual billing and expect a lot of those clients will be paying late if at all, so to my mind we need to be building up whatever resources we can now so we can continue to operate right through the year.
Wrong.
You were suggesting charging more in the current situation.
I took exception to that.
We are not charging any more for more work in the current situation but where we can we will continue to take payments expecting that at some point with some clients that might change.
Sorry if you took offence that really was not intended, I am sure you will do whatever you feel is best for your clients.
It's an interesting problem, thank you for asking the question. For own our small practice (two partners - only) we are providing all that we can on an "as needs" basis. I sent out an email to all clients with the first batch of measures and have answered as many queries as I can thereafter. Each subsequent clarification or addition to the measures have been communicated also and I have reiterated many times that we will be swamped IF clients do not drive their own applications.
As is usual with our practice - some clients do not appear to need any help, some couldn't even tie their own shoe laces without massive help. Then there are those who are not being helped by the system - Banks are not being helpful, Local Authorities are an unknown quantity for us at this time.
I do not consider that I will charge any of my clients anything extra for ongoing advice - I have urged them all to continue paying their monthly fee's because (presumably) they will still want PAYE and VAT returns filing etc.
The only additional charges would be for Cashflow forecasts or management accounts where we do not provide them to the client as a matter of normal business.
Long winded - apologies for that. I doubt any of us can support all of our client base if they all need unlimited help try and target your efforts to client size and capability would be my advice
We have updated our website blog regularly with simple summaries of the government support as soon as it has been released. We have then directed clients to the website. We have also updated our FB page and shared that with a lot of local groups, offering free advice to non clients. The amount of actual calls and emails has been small - but 3,000 have looked at our posts and website.
I've probably spent 30+ hours in the last week doing this, and offering advice to our clients. I now actually have to start running the payrolls myself today as my staff are self isolating.
I sympathise with you in that we are a 4 person practice and as we work from home we are not eligible for most of the support. My parents are elderly and at risk, my daughter has had her A-levels cancelled and I predict that half our clients will probably not be able to pay us going forward for a while. Some clients have also directed their anger and frustration at us, which has been pretty horrible.
Our philosophy is - we understand what support they can get, and these people don't. They're worried, and scared, so if we can help them to feel better we will. We're not charging anyone, and we're not dropping anyone that can't pay. If we need to apply for a government loan so we can give clients longer to pay, we will. If they are furloughed and not trading we will reduce our fees as much as possible.
Yes, all of this might get us some new clients in the future, but that's not why we're doing it. We're doing it because we think it's the right thing to do.
Yes, all of this might get us some new clients in the future, but that's not why we're doing it. We're doing it because we think it's the right thing to do.
Sally, we are in exactly the same situation, and have taken exactly the same approach - there is so much confusion out there and we are trying to bring some clarity, most of our clients have been with us for years, this is not the time to be thinking about our profits, survival mode for everyone
I too am a sole practitioner & work alone. Last Wednesday, I had an e-mail from my Institute - ICAEW - sending me a practice assurance questionnaire to complete within 3 weeks. I wrote yesterday asking them for an extension & was given an extra 2 weeks!!! Are these people for real or do they live in their own little bubble? Meanwhile I have every client ringing me & asking for help which is hard to give as we don't yet have many details & no, I won't charge extra but I have total sympathy for the OP.
Ok. What I have observered is if you work for a govt/ local authority you will get full pay (Courtesy of us tax payers). If you work for alarge company you may well be working from home for normal pay. If you are a business with reserves you are expected to pay and get nothing back. If you are a business that spends all the profits you will get help.
I am being asked questions by my clients that I can not answer. Eg how to we get the rate grant. Apply to Local Authority but how, they dont appear to have details from HMRC yet. How do I get back the 80% cost of Furlongh ?
Am I alone. We wont stop collecting our monthly fees if we are approached we will give a three month holiday and then collect the missed payments over the remainder of the term. How are we going to afford this - dont know as we have small reserves and probally wont be able to claim the Furlongh because it will be in the future when we know how hard this has effected our business,
As a sole practitioner with 5 staff and an office with a £16k rateable value (so no grant or rates holiday) i'm struggling to pay my bills if cashflow drops much more. I have made the decision to furlough half my staff so i can get some help with wages but that gives the remainder a heavy workload. For monthly clients I will be offering a 50% reduction - not in the fees but in the payment and they will have to catch up over the second half of the year. For time billed clients the time spent will definitely include specific Covid19 advice and help but again i'll try to offer sympathetic payment terms.
I agree with the comment that my clients won't be offering handouts or free work except possibly to vulnerable / at risk individuals and if i have any of those on my client list i will help them.
I have to protect my business and employees.