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Making payments on behalf of a client

What do you charge?

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We do the Xero bookkeeping for a small company (t/o c£400k), it's about 2 hours/week. They have asked us whether we'd make bank payments for them (c40 pcm, normally £100-£1k with a handfull of c£10k pa). Obviously I said yes - but what would you charge? Time? Per item? I'd prefer to fix so I don't have to edit invoices each month, but don't know what.

The last time that we did this was a few years ago. We charged £25/h for the bookkeeping & £50/hr for the payments - which was only about £25/wk!

 

Thanks

Replies (24)

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Hallerud at Easter
By DJKL
14th Jan 2020 12:39

Have you considered your liability if you make a mistake, wrong person gets paid, invoice gets paid twice etc etc ?

Whilst I do payment runs as part of my day job I do so as an employeee, if a payment goes astray somewhere I have no personal liability, not sure I would fancy doing this if in practice.

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Replying to DJKL:
ALISK
By atleastisoundknowledgable...
14th Jan 2020 12:41

DJKL wrote:

Have you considered your liability if you make a mistake, wrong person gets paid, invoice gets paid twice etc etc ?

Well exactly - that's why I'm struggling to put an appropriate fee on it.

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By Moonbeam
14th Jan 2020 13:27

Your insurers won't cover you for this. I've asked mine several times over the years , which is how I know.

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Replying to Moonbeam:
ALISK
By atleastisoundknowledgable...
14th Jan 2020 13:31

Oh.

Who is your insurance with?
When I was with a top 20 franchise firm, they used to do it!

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Replying to atleastisoundknowledgable...:
By Moonbeam
14th Jan 2020 13:42

I've had various insurers over the years. Perhaps things have changed. It's a long time since I last asked the question.

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By Roland195
14th Jan 2020 13:51

Do you think your client would pay fees at a realistic level to compensate for the level of risk, admin burden of procedures & engagement letters, Insurance etc?

I'd doubt it and it also suggest that if you go through the necessary processes to have you client confirm & authorise payment, it would be easier for them just to make the damn payments themselves.

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Replying to Roland195:
ALISK
By atleastisoundknowledgable...
14th Jan 2020 14:40

The idea would be that we'd send the client a proposed payment schedule, they'd sign-off on it, then we'd log into the bank and make the payments.

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By bernard michael
14th Jan 2020 14:04

Who decides who to pay - you or the client ?? If the latter I can see fraudulent trading rearing it's head

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By zarar
14th Jan 2020 14:51

Check your insurance, ours won't cover this, I have asked a number of times

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Routemaster image
By tom123
14th Jan 2020 14:58

I am with DJKL - I do it daily, for my employer, and am intimately acquainted with the whole purchase ledger, so would recognise wierd stuff.

For a third party, it would just be text on a page - thus more likely to go wrong!

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ALISK
By atleastisoundknowledgable...
14th Jan 2020 15:32

seems a pretty one-sided argument so far.

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Replying to atleastisoundknowledgable...:
Hallerud at Easter
By DJKL
14th Jan 2020 16:29

Well the other side is basically extra fees and keeping the client happy.

One way you maybe could do it is become an employee re this role, when I gave up my practice in September I arranged with my largest former client to instead became a part time wage slave for them, in effect I do virtually everything I did for them whilst they were a practice client (albeit they always also had another firm involved already re final accounts/CT but I now do not do it as an ASP, they pay me pretty much the same salary as I had received as a fee and as a bonus it does not drag me or them quite into NI.

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Replying to DJKL:
ALISK
By atleastisoundknowledgable...
14th Jan 2020 17:57

DJKL wrote:

Well the other side is basically extra fees ...

That’s always my side of the argument.

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RLI
By lionofludesch
15th Jan 2020 07:26

I'd charge nothing for this service. I just wouldn't do it.

It's an accident waiting to happen. The signing off process you propose is more unwieldy than the client just making the payments himself.

Nevertheless, it demonstrates that some clients just aren't comfortable with technology.

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By Mr_awol
15th Jan 2020 09:52

Have you looked at Aptimise? It's an essentially an offering from NatWest and had a service to allow accountants to make payments on behalf of clients. I'm not totally sure how the approval process works but I imagine you do your bookkeeping, the client e-approves which bills get paid and you then have the ability to make payments - presumably you have the power to stage them as cashflow requires. Give it a look if you haven't already.

Other than that, you could send the client a list of proposed payments and if they approve, they pay the total to your client account. You'd have to agree with them that they should actually check the list not just trf the total. Then you can make payments.

Either of the above might sooth your insurers and/or provide you with a reasonable way of facilitating payments without having unchecked access to the clients funds. If it came to having a login on the client's online banking, id probably refuse (unless it was read only which I've done in the past before bank feeds). I suppose if you could have a dual signatory process set up, so you initiate the payments and they have to log in and confirm them, that may also work.

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Replying to Mr_awol:
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By johnt27
15th Jan 2020 12:38

Aptimise is a solid choice as is Telleroo, plus if they're Xero users then automated payments are coming soon.

If I were offering the service I wouldn't be asking for access to the client's bank account. That opens up a world of liability, ML etc pain. Use an app and make sure you have decent approval processes, so that if you do make a mistake you can kick it back to the client.

As for charges - it's whatever you're comfortable with. You're providing a quasi FC/Management Accountant type role so what would the client pay for this in the real world.

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Replying to johnt27:
ALISK
By atleastisoundknowledgable...
15th Jan 2020 12:43

johnt27 wrote:

... if they're Xero users then automated payments are coming soon.


Really? I've not seen anything about that but sounds like it could be good. Do you have any further detail on it?
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Replying to atleastisoundknowledgable...:
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By johnt27
15th Jan 2020 13:08
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By AdShawBPR
17th Jan 2020 10:09

If you make payments for a client, you're handling clients' money and that brings up a load of regulatory issues with your professional body. I don't and won't do it but if you do then would suggest the fee is going to be a large one and probably too great to make it worthwhile for the client.

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By Bruce Roberts
17th Jan 2020 11:31

Check your professional body's client money rules as I'm pretty sure the ICAEW rules won't allow you to do this. I have a feeling there might be legal restrictions on providing a 'payment service' as it is a classic money laundering tool.

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By djn24
17th Jan 2020 11:31

I would not do this even if the fees were substantial. Just not worth the hassle if things go wrong.

I can see why you would want to do it but my firm wouldn't touch it.

I'd be interested to see what the institutes and PI would have to say about it too.

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ALISK
By atleastisoundknowledgable...
17th Jan 2020 11:44

Thanks all.
I managed to politely get out of the offer with no disturbance to my relationship with the client. So Phew!

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By pauljohnston
17th Jan 2020 12:19

For this part of the service why not become an employee of them. YOu can go on the payroll as BR even if it was £200 per month there is no NI and the client takes all the risks as others have indicated

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By David Gordon FCCA
17th Jan 2020 12:42

There has been discussion on this previously.
Assuming you have noted and acted on all the caveats involved, then just charge on a usual hourly basis.
Beware, however, this is not easy work. If you are paying the bills you will then have to deal with creditors' queries. Reflect on your own office experience.

There is a huge difference between just paying a list of payments approved by the client, and you essentially sorting, approving and paying.

Beware also of VAT. You may cross the line between being being "Professional" assistance and being part of the client's VAT management.

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