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How to make 'friends' pay their fees

How to make 'friends' pay their fees

I recently had a 'friend' who would just not pay his fees. Whenever I gave him an invoice he said 'I will put this in my back pocket to remind me to pay it'

Needless to say he never did.

I took him to court and was awarded a decree against him, but he simply went bankrupt.

An AIB was appointed, and though it has been claimed that most creditors are unhappy with the results achieved by them, I would say I am more than unhappy.

It has taken him many months to establish the ownership of the residential house, in his name, his wife's name. or joint names.

But the final straw was when I learned that the bankrupt had taken certain assets of the business home with him for 'safe keeping' If he did this on his own, this should amount to theft. If he did it with the knowledge of the AIB, then I would feel that this is contrary to the ethics which state that an AIB should act in the best interests of creditors.

Have any members comments to make on this.

Finally, I would state that this had been a hard lesson, and all my contracts now state that no filing of any kind, wages, VAT or accounts will take place until all accounts rendered have been settled, and cheques cleared through the bank. There are no friends in business.


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03rd Dec 2012 17:26

Yes, Cover Thy Rear is a Good Motto

If you carry on doing work when client isn't paying, you have to ask yourself why are you taking the risk.

There are lots of thugs and other dishonest people out there who are only too happy to help themselves to your credit. On the other hand there are some very nice people - many of them clients of mine - who always pay before I chase, or if disorganised, pay when I chase.

Just learn to suss out who's who before you even send out an engagement letter.

Easy for me to say - I learned the hard way by forever being in court suing for my money. I now cherrypick who I will work for, based on the type of business and whether I like the owner.

I now have a rule that I won't work for friends, family or neighbours. That cuts out another load of aggravation.

So put this experience behind you, make sure clients pay up on time in future, and only pick people you like to work for.


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03rd Dec 2012 19:18

Hmmm - does not sound like a friend to me

I think he would have done that to whichever accountant took him on.  All of my friend/clients have paid immediately.


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03rd Dec 2012 20:24

One tip

I offer all my new clients with fees over £300 per year a standing order payment - and to help them go for this it is 12 months for the price of 10 in year 1.

There are 2 main benefits:

1.  75% of my income is standing orders, it's merely a case of checking who has missed a payment.

2.  Anyone who does NOT opt for a standing order is putting up their hand to say "I plan to slow pay or even no pay."  That is terrific news, and I manage all such clients accordingly.  It is a very reliable indicator, when anything along the lines of "payment up front" is mentioned they generally take themselves off to some unsuspecting mug down the road.

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04th Dec 2012 08:18

My argument would be do you invoice true friends?Or indeed take them to Court?


It sounds as though your friend was in financial difficulties so needed help.


If its a few hundered pounds and your friend is a true friend write the experience off.


Sounds as though your friend needs help in these difficult times.


If its fraud should you be associated socially with a fraudster?





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By Flash Gordon
04th Dec 2012 08:43

True friends offer to pay before you've even decided to charge them, volunteer payment before you've handed over the invoice, and argue that they should be paying you more!

Not so true friends ask for mates rates (with the implied suggestion that you forego payment despite it being a lot of work), then ask you to leave the vat off, then reveal that actually its far worse a job than you anticipated, then ply you with sob stories, then when you do finish the work & save their bacon they ask if it would be okay to pay over a long stretch of time!!

Still, on the upside, it's one less card to write this year :-)

If you do work for friends treat them the same way you'd treat a client re payment. And if they don't pay then either try a few sob stories of your own or remind them they owe you in front of other friends or family - shame is a wonderful prompt!

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04th Dec 2012 09:02

Friends and business dont mix.



Dont act for "Friends" unless they are in distress and as a last resort i.e. SOS!

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By Pelican
04th Dec 2012 09:41

Un-like moonbeam I cant cherry pick my clients.

I have an old school friend that I work for, when I send him an invoice then he will pay it straight away and it is in my bank account within a few hours.


Another close friend I have taken on and last night I chased him for an invoice payment. Although a close friend I wont carry out anymore work until he has paid up-to-date.

I am going to call him this morning and make him go on standing order.

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04th Dec 2012 10:39

Never had this problem to be honest.

I have family who are clients but they don't pay and there tends to be a reciprocal arrangement somewhere along the way. I also have many friends/neighbours etc who are clients but I treat them as any other client from day one. Same paperwork, same DD, same letter of engagement. I genuinely don't think any of them have come to me expecting a favour; I just happen to be a friend who is an accountant.

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04th Dec 2012 15:26

Thanks for all your advice and comments. As I said, I now always insist on payment being cleared before filing accounts.

The main method used by some clients to avoid payment is to wait until 31st January, turn up and say 'Will you take a cheque?' My standard answer is 'Do you have a bank card?' when they say they do, I reply 'Well there is a 'hole in the wall' machine just down the road. Get the cash and come back with it and I will give you a receipt and file your accounts' I always get paid, though I have lost some clients through this. Anyway their accounts are always accompanied by the statement saying 'Prepared from the information supplied etc.

However, though it is a minimal loss, I would appreciate any comments on the AIB's actions and non action. Would allowing removal of assets be considered as negligence or collusion?

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By chetan
04th Dec 2012 16:15

"A friendship founded on

"A friendship founded on business is better than a business founded on friendship."

John D. Rockefeller

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04th Dec 2012 16:38


Thanks for that. But have you any wise words about an apparently incompetent AIB?

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04th Dec 2012 18:54

Friendship/ AIB

I am perturbed that this accountant in bankruptcy has been apparently so lax knowing that I am also a qualified accountant, though not versed in bankruptcy law. It tends to make one wonder if this scenario has happened before, and not been challenged.

Should I verse my concerns to his professional body? Comments welcomed.

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07th Dec 2012 10:59

Assets of the business

It is very unlikely that the AIB would have consented to the assets being in the custody of the bankrupt. The AIB would have requested their return and has powers under the Insolvency Act to take the bankrupt to Court for an order seizing the assets. The AIB would always seek the voluntary cooperation of the bankrupt in the first instance to avoid incurring unnecessary costs. A problem arises if the bankrupt is uncooperative and if there are no funds in the case to mount the Court application, or if the value of the assets is so small that the costs of the Court order would outweigh the benefits to the estate. In this case  the AIB will take the commercial view that it would not be in the benefits of creditors to pursue the assets.

If you have concerns you can write to the AIB and request information on this point. If the response is inadequate the option is open to you to  escalate it through his firm's complaints procedure.

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07th Dec 2012 11:44

HWD    You sound like a
HWD    You sound like a "friend" to be avoided !

The "friend" may become an enemy.


In the circumstanes I would prefer to advise the "friend" than you.


I think he has taken the right course and written off the debt to you.

Call yourself a friend --parasite more like

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to GlennAlderdice2016
07th Dec 2012 12:04


uktaxpal wrote:

Call yourself a friend --parasite more like

Is this really appropriate?

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07th Dec 2012 14:20

uk tax pal

The debtor who went bankrupt owing me and other creditors is the parasite.

Brainheg has summed up the position. the bankrupt has assets, plus however many he has taken, or been allowed to take, for 'safe keeping'.

The case will be reported to the accountant's governing body in Lincoln's Inn Fields and Glasgow.

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07th Dec 2012 14:30

The "Rich" accountants never

The "Rich" accountants never file accounts unless they have been paid.

In fact ICAEW/ ACCA rules do say that accounts should not be certified if there are long o/s fees.

I have it printed on my bills that if fees are not paid, we reserve the right to not file, and to charge stat. interest.

I have a client who does some repair and alteration work on my clothes as needed. My clerk says why do I insist on paying him, when he always offers a freebie, as a friend.

I tell him, its not because I am holy and righteous. It is because it is his living, (as accountancy is my living), and "Tesco" does not accept "Favours" in exchange for groceries.

If your friend does not understand this, he ain't your friend.

As far as the insolvency practitioner is concerned: He is business as well, to earn his fees, If he is a respectable person he will do his best for the creditors, but do not expect him to spend hours of unremunerated time on any one case.


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07th Dec 2012 15:04

Dont understand why you refer to him as a friend so I will leave you to it.


It may come back to haunt you one day.

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08th Dec 2012 16:36


More likely to haunt the accountant handling the case. When I asked him why one specific asset was not on the list of assets sold, he replied that the debtor had taken it for 'safe keeping'.

At first I was surprised that such a bulky item, which would be of no use to anyone in the retail business, especially as he had been forced to leave the marital home and was living in rented property, then I wondered how the accountant knew about it. Had it been take with or without his knowledge and consent.

Anyway, thanks for all comments made, I have now got the address of his governing body, and after reporting my concerns, I will leave it to them to discipline him for his actions. 

Then I will let it go.

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08th Dec 2012 17:19


I believe that ICAEW/ACCA rules also state that accountants in bankruptcy should always work in the best interests of creditors, without any stipulation about fees.

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10th Dec 2012 09:34

Hugh W Dunlop

The AIB does need to fulfil his statutory duties and act in the best interest of creditors, but he is not required to use his own personal funds towards funding court action, and he is not required to pursue any action which is not in the interest of creditors as a whole (i.e. if the costs of the action outweigh the benefits)

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