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How to approcah clients re bookkeeping issues?

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Im finding that now more and more clients are using Xero and QB that more and more errors are creeping in and previously we have just put them right with the odd email to tell them where they went wrong so they dont make the mistake again.  However an extra 10-30 minutes per job is really starting to add up and I need to find the best way to go back to the client with some options. 

The main problem is that Xero and especially QB are selling the software as being a magic wand to bookkeeping when its quite clearly client this morning wanted to file their VAT return with a £3k refund until I pointed out that they hadnt paid off any of the sales invoices and therefore Xero wont include them on the VAT Return as they were on cash accounting.  When weve actually had a look at the purchases they have duplicated things by manually paying off incoives and then also coding out the bank feed payment too.  In short, its a bag of crap but I always struggle how to approach this especially with clients who are on a fixed fee.  I appreciate Ive made life hard for myself here but I need to sort it out now for the existing clients and make sure I dont make the same mistake again with new clients.

How do you approach the situation with clients?  Any help appreciated thanks.  Initial training would probably be the best answer but clients think its so easy and dont think they will need it.

Replies (23)

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By ireallyshouldknowthisbut
04th Sep 2019 12:13

I tend to show them how to do a couple, and then say, "and you do the rest"

o, and BTW this is your bank balance, it should match whats in the system.

At this point, either they do it, or say "er this is hard, can you do this?" and you can say, sure, its £XXXX

Thanks (4)
Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
04th Sep 2019 12:47

You need to just say what you've said here (without the bag of crap part!), more or less.

Be honest. "Either I can show you how to do it properly, or I will have to charge you for my time in correcting your errors."

I have always given my clients a price based on a certain standard of bookkeeping, and always given the caveat that any time spent correcting books not kept to a standard will be chargeable. In practice I'll do about an hour without charging, it depends who it is and the scope of the errors.

But essentially, you need to approach them and just tell them.

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By pdtaylor78
04th Sep 2019 13:02

Our engagment letters state the following:

"If you provide us with a standard of books and records that is lower than that set out in the letter of engagement and any other discussions we have had with you then we reserve the right to charge additional fees for any additional work this creates for us. For example, if you have agreed to reconcile the bank account, but have not carried this out then we would need to make an additional charge if you wished us to do the reconciliation."

In practice we tell the client what is wrong, what is required to correct it and then give them the option of doing it themselves or paying us to do it for them.

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By mrme89
04th Sep 2019 14:03

I wouldn't go back to the client and risk p1ssing them off for sake of 10 minutes of corrections.

I think you need to just factor in bookkeeping corrections into your pricing.

If you have a job where they've really messed it up, then I'd go back to them and explain what has gone wrong and give them the choice of fixing it or for you to fix it and include your quote for doing so.

If your fixed fees are at a level where 10-30 minutes is becoming problematic, you probably need to increase your fees across the board by quite a lot.

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Replying to mrme89:
By Mr_awol
04th Sep 2019 16:26

Exactly. Half an hour extra on an accounts job shouldn't be a big deal. Even on the bookkeeping jobs where the fee is usually somewhat tighter, it probably isn't a big deal - so long as it doesn't turn into half an hour 3-4 times a quarter.

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By InterimAccountant
04th Sep 2019 14:08

When I started as an articled clerk some 35 years ago I 'cut my teeth' on the dreaded Simplex books which meant almost completely rewriting the clients books.

This problem is not new. You either utilize low paid trainees or charge your customers more.

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By Mr_awol
04th Sep 2019 18:20

This is one of the real success stories of accountancy over the last few years. I'm talking about the cloud software providers' marketing departments and account managers who have managed to clean up on two fronts - charging a premium price whilst swerving the cost of customer satisfaction.

I'll use Xero as an example as they have the strategy perfected I feel, but they all tend to operate in a similar way (except Freeagent, perhaps). My account manager and 'practice consultants' were full of enthusiasm for monthly fixed fees, with me signing up to bulk licences and absorbing the cost. They tried to convince me that gold/silver/bronze crap was a cunning plan, and even encouraged me to ditch timesheets as they become 'irrelevant' with 'value pricing'.

Of course I wasn't going to ditch timesheets regardless, and weren't about to go all g/s/b either - but many do. This leaves the software provider in a perfect storm of money-making glory.
1) If you bulk buy the licenses, you make sure you use them, even if it isn't necessarily the best method for every client.
2) If you don't use them, it's pretty hard to keep an eye on what you are and aren't paying for. Even more so if you aren't recharging the software and are thus not reconciling expenditure to income and profit margin.
3) If you offer the tiered nonsense, then you get used to correcting the mess produced by automated accounting systems for free. This means that they can charge a high price for an ok product.
3a) If you are absorbing the cost, you are at their mercy
3b) If the client is paying full RRP, they accept this because the software is, in their eyes, excellent. In reality, of course, you are doing the adjustments for free.
4) There are lots and lots of smallish practices, operating only in the cloud, who will let the software churn out a load of crap and accept it with little regard to accuracy. They are heralded as success stories. This stops you jacking up your prices for any clients using ok software badly.
5) If you've fallen for the whole marketing ploy, you are now working harder to get accounts less accurate than you were before, charging your clients more than you used to because you've conned them into going onto your 'silver' package (which promises vague accuracy) and you don't prepare timesheets or monitor costs of the licences for which you are paying much more than you were at the beginning and you have no idea who is paying for what or indeed whether half the licenses coming out on monthly DD are even being used. The only thing left is to come on AWeb and belittle those 'old fashioned fools' who didn't have the 'foresight' to join your 'progressive' firm in abolishing timesheets and moving onto value pricing!

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Replying to Mr_awol:
Hallerud at Easter
04th Sep 2019 17:24

Hurrah- stark honesty re where you are all heading.


1.Large numbers of smaller clients are not capable (due to lack of time/application/inclination) of keeping decent books, correcting these takes your time and that time is your money.

2. Even if you train your clients (and most can with a lot of patience be trained) this tends to be a bit of a loss leader, so sort them out then risk A N Other low balling you on the fee, distinctly unattractive, I never experienced but had very few clients which I kept tight to me, not so easy with a bigger practice.

3. Client perceptions of the value you add when they do "all" the work are low- fee resistance, especially with daft actors on TV extolling the ease of knocking out accounts- I wish he was unforgotten.

4. More and more client take-on from previous accountants are going to be shambolic as you need to spend time (likely in part unpaid) eliminating the prior year errors in the carry forward figures.

The solution in my head is stop working for smaller clients, only take on more substantial business entities in an employee/director/ company secretary role and ensure day to day/week to week that the figures are sound, add value from that base re general business advice etc and actually have a more interesting working existence.

Certainly this is where I have gone though I accept it is easier to do if you have a core income from one employed position and the rest are add on roles, but it does appear to me that the race to the bottom with fees is on and this is going to become more stack em high sell em cheap, no quality control re what is produced, we do not care we earn a fee , HMRC rarely checks and nobody cares what goes to Companies House- I do not want to take part in that sort of race.

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Jennifer Adams
By Jennifer Adams
05th Sep 2019 17:49

I dont.
Clients never ever get the bookkeeping right. I'm fed up with hearing 'you wont have to do much... Sage says it all balances'.. then you find £5K + under suspense.
The last straw was reworking a clients bookkeeping for whom I charge a smallish amount as its a small non profit making company.
I spent ages reworking and teaching the client where they had gone wrong so correct figs could be carried forward before I thought... what are you doing?!

So I now no longer take on any client who does their own books. My firm does everything (incl payroll and Co House work where relevant) or not at all.

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Replying to Jennifer Adams:
By meadowsaw227
06th Sep 2019 10:25

I agree totally, only a couple of bigger clients run their own systems, we do everything for the rest.

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Replying to Jennifer Adams:
By Vallery Lee
06th Sep 2019 13:29

I wish I had the nerve to do this, but fear I would end up the loser.

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By SBS33
06th Sep 2019 10:36

Hmm. I would start off by proofreading everything I write. Apostrophes are also helpful when communicating with clients.

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By Rgab1947
06th Sep 2019 10:51

I can only sympathise as I have the same problem with clients who use QBO. I do not like it that QB is advertising it as an AI driven program that can do everything bar clicking. They don't want bookkeepers because its just a click away!

I fix small errors that are easily to do but resend the time. However if repeated or a lot I refuse and tell clients to get a bookkeeper which I am happy to organise but they pay direct.

Some say thanks but carry on. I then charge my full rate as else they can take a hike.

I have complained to QBO but do they care? Nah! It sales baby, it sales!

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By indomitable
06th Sep 2019 10:53

Yes had this problem a few years ago and absolutely agree clients like to think they can do the bookkeeping but in most cases they obviously cannot. How could they, they are not trained.

We do give the client the option to do the bookkeeping, but make it clear we require a completed trial balance (although in our engagement letter we do state we will do the final entries such as depreciation, accruals prepayments, WIP etc.

The ones that want to do it themselves we give them a list of bookkeeping tasks that need to be completed on a monthly or quarterly basis and then go through the ones they can do and the ones they want us to do. That way if they are not done we have leverage to charge them for it.

If the client has done their bookkeeping but we find alot of obvious errors, we point out the legal responsibility of directors to keep adequate books and records, they have a choice then we can review them and correct them or they can but we will not prepare or file their accounts and tax returns until this is done. In almost all cases they get us to correct them. Usually what happens then is they get us to do the bookkeeping.

Some clients especially the very small ones wont have it and they object to us charging for bookkeeping, thinking we should do this for free even though they agreed to do it in the first place, invariably these are not the sort of clients you want as they do not value what you do

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By enanen
06th Sep 2019 10:59

offer them to sort it or charge them to sort it

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06th Sep 2019 11:40

Some clients are just plain PITAs ... I had one using an excellent spreadsheet-based system which flagged most normal errors, so that in 99.99% of the cases you could at a glance see you'd made a mistake (OK, let's make that 100%....)

Now her spreadsheets showed clearly that, with income of just £20k, she had made charitable donations of over £250k ... and what's more, the spreadsheets highlighted this error in three different ways, all of them in insanely bright red ... when I queried this, very politely, she stated that her spreadsheets were totally accurate and that, apart from anything else, she taught people how use Excel, and, as such, she was something of a power user .... which of course I had to agree with, since, if she had managed to nearly hide over £250k other taxable income, with only three warnings signs giving the game away, she was indeed a truly amazing Excel power user ... even when I spelt out in three separate emails that she had made an error of over £250k, and that it was totally impossible for her to have made over £250k of charitable donations when her net profits were in the minus bracket and she had no other incomes, !!!!!, she continued to assert that the spreadsheets were totally accurate.

We parted company, and she is now using a "friend" accountant who had previously tried to get her to hide a property sale in Australia, and who promised that she was paying far too much tax (zero, on net losses, but what the hell!), and who, naturally enough, is not registered with anybody, and who hasn't registered her as his client at HMRC (who had me down as her accountant until I spotted this three years after we parted company) ... so, some times you win, and sometimes you don't ... parting company was a HUGE win, in my eyes.

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Glenn Martin
By Glenn Martin
06th Sep 2019 12:21

Have you looked at Xavier analytics? It plugs into Xero and audits your data, removing duplicates and cleans up the crap in your system and reports on the errors and gives a quality score

Its not expensive at £5 per month but will save you time and just rebill the extra costs to the client if there score does improve.

I am looking at trialling it soon as its a constant battle getting good data from lower skilled clients who insist they can do it.

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By Vallery Lee
06th Sep 2019 13:20

I find this a lot. I list the errors and then meet the client, or email them. I keep a copy of the list and attach it to the next fee note so that they can see why the charges are more than they expected. The worst recent one was when I had spent 10 hours correcting postings - I listed it on the fee note. It is probably easier for me to do this as I do not make fixed charges and do all work on a time basis.
As MissAcounting so rightly says the sales pitch to sell accounting packages is that anyone can do it!!

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By chrisdxuk
06th Sep 2019 14:02

This posting highlights a real bug bear with clients. Their innate disregard for the time and effort in identifying errors and correcting them. Twenty years ago, I had one client who somehow managed to avoid five (yes, 5) years of partnership accounts.

Took the books and records, incomplete records adjustments as far as I could. even so I had some what I thought were legitimate queries but, they went off like a bottle of pop. Complained to my Managing Partner and so on. I doubt if, we recovered half my time.

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By Charlie Carne
06th Sep 2019 17:08

As Jennifer Adams has suggested below, you should insist upon doing the bookkeeping for those clients who are incapable of doing it themselves. I don't go as far as Jennifer in insisting that we ALWAYS do ALL of the bookkeeping, but I do what is required, based upon the client's ability. I almost never let them do the bank rec unless they are experienced at bookkeeping, as modern cloud software makes the bank rec very easy if the books are correct. Therefore, i will attempt the bank rec each month and, if it won't reconcile, I tell the client immediately and, if there are more than one or two tiny errors, I then insist that we do the bookkeeping, as they are clearly not capable and it is much quicker for us to post 100 transactions using AutoEntry (for purchase invoices) and bank feeds than it is to correct errors on just 10 transactions. If you wait until the year-end, it is MUCH harder to have this conversation with the client, so take advantage of the fact that the books are in the cloud and review them monthly.

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All Paul Accountants in Leeds
By paulinleeds
08th Sep 2019 18:23

Every man and his dog can do bookkeeping. It's easy. You just list your income and expenditure.

The interesting point arises when you ask for client why their receipts minus their payments, adjusted for the opening bank balance, does not equal the closing bank balance.

When you ask why they have not checked it, they say that they have already checked everything to the bank statements as they were entering it. I say yes, I’m sure that you have, but can you still tell me why your income less payments does not be equal the balance on your bank statement.

Then you get clients operating through a limited company that ask the purpose of recording private payments to the themselves, when it will not affect their profits. When you try and explain about Balance Sheet and accounting for spending the company’s (not your) money and not just preparing a single sheet Profit and Loss Account their eyes glaze over.

Of course, explaining the difficulty of maintaining quality accounting records is not assisted by the stupid idiots on the TV where you just photograph the receipt as you leave the shop and low and behold everything appears in your accounting system! Lies, lies and more lies.

You just have to charge clients for fixing their records. When people start paying the start thinking about what they are doing. If you were a mechanic and somebody brought their car in having had a go themselves then of course you would give them at least 30 minutes of free assistance to fix the mess that they had created!

I have always found that if you explain to the client what they are doing wrong and why you are charging them more then they either realise they cannot do the book keeping and let you do it (for a fee) or they agree to pay you more. The third alternative is that they leave the firm.

I always say to clients I am in business and I am not a charity.

Another one is if you pay peanuts you get monkeys.

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By Tickers
12th Nov 2019 08:56

I know I'm late to the thread but I posted about this a few years ago and I was set upon by AW members who said I was living in the past and needed to move with the times.

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By SouthCoastAcc
12th Nov 2019 10:49

Unhappy to admit I'm awful at this, I have a fair few who "do" their own bookkeeping. I wonder if it would be less effort to do it myself as a lot of the time it ends up in a massive muddle.

The other day it took me half a day to correct one clients work!

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