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How should I proceed with a suspicious client

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Happy New Year.

I am an AAT Licensed Accountant and I have been in practice by myself for three years.

In August 2016 I was appointed to act for a Ltd Company.  The MD promised me records the same month.

I have regularly chased the records since.

I received incomplete records 3 January 2017 and the Companies House filing deadline is 7 January 2017.

I prepared DRAFT accounts the same day and sent the client on 4 January with queries.  He responded today (9th) telling me to submit the DRAFT figures.

I have spoken to Co House and asked for the penalty to be postponed as I am awaiting an authentication code.  The client one didn't work.

The client is now blaming me for the penalty and using profanities.

Furthermore, I have only been given access to QuickBooks online and requests for bank statements and paperwork have been declined.  Client has also ignored my list of queries and told me to submit the DRAFT figures.  Based on the description of some transactions I am fairly certain that QB is not accurate.

How should I proceed please?

Replies (17)

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By RM1974
09th Jan 2017 17:24

Also, I did send a very basic engagement letter, but I haven't received a signed copy back.

Thanks (1)
Replying to RM1974:
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By Harrison88
10th Jan 2017 09:22

No engagement letter? No submission.

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By ireallyshouldknowthisbut
09th Jan 2017 17:51

I would not proceed at all.

You don't have a signed engagement letter

What makes you think you are going to get paid for this last minute dash item of work?

It seems to be you are very green and unprepared. Treat this E list client as a harsh lesson in not how to proceed.

In terms of exiting from this mess, I would explain to the client in basic language that if the filing dealing is the 7th and you dont reply until the 9th, its going to be late. End of. And by the way if you want me to file these, you need to (a) sign the engagement letter (b) pay my bill [which is now going up all the time you argue with me] and (c) answer my questions.

Take it or shove it.

If you bend over they will keep taking you up the backside for the whole of the engagement.

Thanks (16)
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By Sheepy306
09th Jan 2017 18:00

I guess the first question should be......do you actually need this client financially?

If not then the answer to me seems fairly obvious, sack him.
But just a brief summary of the facts based on what you've told us:
1. He failed to provide you with the records despite promising them
2. You've had to chase him for the records regularly
3. You received incomplete records 4 days before the filing deadline
4. You prioritised his work and turned it around (pretty much) on the same day, despite this he still hasn't answered the queries raised
5. He didn't respond to your queries until after the filing deadline had passed
6. The client is blaming you
7. The client is swearing at you
8. You doubt the accuracy and/or integrity of the quickbooks data

I'm struggling here to see a single reason why you would want this person as a client, either on a professional or personal basis. He also sounds like a ticking time-bomb with regards to a potential PI claim, even though he wouldn't have a case it will still take time and stress to deal with.

Either way, you need to set the above facts out to him in an email/letter so that it clearly covers your back and tells him clearly your position.
If you don't want him as a client then just use those facts for a basis to resign. If you do want to retain him then you'll have to make the letter a little sweeter and tell him exactly the course going forwards so that this little hiccup in the relationship is purely a teething/one-off issue.
I assume that he's been told that the Draft accounts will remain on public record, even when amended final ones have been submitted?

Thanks (7)
Replying to Sheepy306:
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By RM1974
11th Jan 2017 20:03

Thank you for this reply.

I have agreed to submit the accounts to companies house but as the CT deadline isn't until May, I have now terminated.

What a weight off my mind!

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Replying to RM1974:
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By JSinden
18th Jan 2017 14:30

You have submitted accounts to Co Ho you know to be wrong ... ? surely not!? Do you have PII cover?

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Replying to Sheepy306:
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By lechiffre
17th Jan 2017 10:52

Sheepy306 wrote:

I guess the first question should be......do you actually need this client financially?

I think this is the last question the OP should be asking...

Send a full letter setting out all the issues and the timeline and extract yourself from the situation. You do not need clients like that.

Thanks (0)
RLI
By lionofludesch
09th Jan 2017 18:01

Get paid.

Get rid.

Omit the first step if necessary.

Thanks (4)
Replying to lionofludesch:
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By Alex_T
11th Jan 2017 09:46

lionofludesch wrote:

Get paid.

Get rid.

Omit the first step if necessary.

I agree with @lionfludesch.

If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

Thanks (0)
By Glenn Martin
09th Jan 2017 21:18

Lesson learned.

I have been a sole trader now for coming up 3 years. In my early days these messy jobs used to come along regularly.

i would always think that if I could turn them around there would be a good client underneath the current crap.

reality is these people never change and if your relationship starts off like it has it will only get worse until he leaves or you sack him. This type of client has a new accountant every 18 months or so.

I would send him a bill, tell him his accounts are late but you won't file anything until you have been paid and he has answered your queries.

I would imagine he will struggle to get anyone else to do them as it is silly season this month, so he might comply.

If he pays you, great if not look at as an expensive lesson.

Thanks (7)
Replying to Glennzy:
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By RM1974
11th Jan 2017 20:06

Glennzy wrote:
I would always think that if I could turn them around there would be a good client underneath

I know that feeling.

I will try and learn from your experience!

Thanks (2)
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By lesley.barnes
10th Jan 2017 09:51

I wouldn't proceed - you are worried the figures aren't correct and from what you say about lack of information and the evasive nature of the client I would say your instincts are correct. When the client is bullying you into submitting unsubstantiated figures you have to ask yourself what they are hiding. Cut you losses and get rid pronto.

Thanks (2)
Hallerud at Easter
By DJKL
10th Jan 2017 10:15

You break up with the client whilst singing,

"We can't go on together
With suspicious minds (suspicious minds)
And we can't build our dreams
On suspicious minds"

Thanks (2)
Replying to DJKL:
Man of Kent
By Kent accountant
10th Jan 2017 10:24

Have it playing in the background when you call him...

Thanks (2)
Replying to Kent accountant:
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By Hugh Simpson
10th Jan 2017 14:05

Kent accountant wrote:

Have it playing in the background when you call him...

... via Skype, wearing an Elvis jumpsuit.

Thanks (0)
Replying to Kent accountant:
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By RM1974
11th Jan 2017 20:07

This is too funny. I'll have it queued up in case he calls.

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blue sheep
By NH
18th Jan 2017 06:55

One lesson you might learn from this - the very first thing you should have got before starting any work is the signed letter of engagement.
Red flag from the start if they refuse to sign.
But we have all started off with these types, at the start you take on any client because you need to

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