My father said this to me many years ago. As a rule of thumb I think it is true. What is your experience?
A lot of people like to deal with someone they know.
My father (lawyer) was similar, he told me that family and friends need to pay you, it is not you want their money but if for their own good, you need them to follow your advice and to get them to do that put a price tag on it, they will value it more.
Now at age 57 I know he was right.
A good rule and like any rule there are exceptions to prove it.
A friend became a contractor and we had a successful business relationship and are still friends and my bookkeeper is one of my best friends and I now work for all her clients and her husband. Another friend has just started in business but she has made it quite clear she doesn't want to use me and admitted it is a shame.
Although to me it is just numbers, I don't obsess about how much people earn, but if they don't want me to know then that is fine.
I act for one of my closest personal friends.
But on a strict client basis, and we don't talk work when its play time and vice versa.
This is however the exception, I normally run a mile for acting for friends and family.
As a general rule, I am the same. I do the Tax Return for my sister and also my nephew. Both are simple and very straightforward Returns. I wouldn't want to get involved with Tax Returns for friends.
I consider it a privilege to be able to help friends and family. If I cover staff costs, that's enough for me (although Mum n Dad are FOC).
I'd sooner know they were in safe hands than elsewhere.
I have lots of friends who are clients, they know they can trust me and I will go the extra mile for them, in return they always pay what we agreed on time.
Whats not to like?
I loaned my friend, also a client, £10k to tide his business over over because I was too busy moving house to knock together a business plan for his bank.
I act for quite a few people I would class as friends they were really the first clients I got once starting out on y own.
They get things for mates rates, and often push the barriers (info at last minute etc) but they have collectively been a very good source of referrals.
There are a few exceptions but in my experience situations can easily arise that will destroy even the best of friendships or family relationships, so I try hard not to act in a formal capacity for family and friends.
It is like the two friends who go into partnership because they went to school together only to find that they end up hating each other as their new venture fails, due to personal disagreements.
I have friends that became clients and clients that became friends. I wouldn't change any of them!
The question is : When you find any anomaly in the records of your friend or relative, do you make that Suspicious Activity Report ?
To inform is so dishonourable.
To inform is so dishonourable.
So much easier if it is a friend, you can be perfectly blunt. "Where did this amount come from? I am putting down as earnings/takings unless you can convince me otherwise."
Sigh... just dishonourable. It's a matter of (enforced and misapplied) ethics (thinly disguised as jingoistic duty) v. one's own personal standards / morals.
More than happy to act for friends and also charge them less for it. I always make sure to put the full amount on their bill though and show the discount in case they refer someone else on who thinks I'm a bargain!
I have many clients who have become friends or close acquaintances but no friends who have become clients so agree with your dad. Can lead to problems if things go pear shaped for whatever reason especially when HMRC get involved.
As a general rule I'd agree with the OP and DJKL, but for me one of the exceptions is also one of my very best clients. He was my best mate at school and is still a very good friend but the reason I think it works for us is that he was in the advice game (but not as an accountant) before he started his construction company and he fully appreciates that a) we need to do things he doesn't understand and b) we need to get paid for what we do.
I think I'm very lucky to have a friend who expects me to play with a straight bat, otherwise I find that friends and family work tends to be a pain in the proverbial.