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New client

When to extract from existing accountant

Mr Bloggs is fed up with current accountant, who always supplies stuff at the 11th hour and generally treats him quite badly. His company accounts for the y/e 31/8/17 are outstanding at the moment. These have been paid for via fixed fee. Accountant does all bookkeeping and VAT returns. 
If Mr B wants to stay until accounts are done, that could be May 2018 before accountant finishes the work. Meanwhile there is ongoing bookkeeping and VAT returns which accountant would continue to do during that time.
Is it normal for clients to demand a part repayment of their fees to cover someone else doing the statutory accounts and corporation tax return, or is it inevitable that he will want to stay with current accountant until that's done? If that's so, there's always going to be a time hangover from one accountant to another. How would you deal with handovers in this situation? 


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20th Jan 2018 13:29

Is he being billed monthly or is it a fixed fee with monthly s/os? I would refund most of the payments if the bulk year end work hasn't been done but I don't think other people necessarily do this.
Tell the old accountant that accounts are needed urgently for a mortgage application and that might speed things up if he stays where they are?

Thanks (1)
20th Jan 2018 13:49

The details of the engagement that the client has signed up to are critical. It is common to have an agreement where the work stops when the payments stop.

Firstly, I would advise the client to understand what it is they have signed up to.
Secondly, for them to get a firm (and binding) commitment from the accountant as to when the accounts will be prepared.
Thirdly, on the basis of the information to determine the appropriate time to jump ship.

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20th Jan 2018 20:51

These days, for us anyway, the "year end" work is getting less and less. We use freeagent and review/correct client accounting throughout the year, so the year end is little more than an hour or two. But, each month, we pay the client's FAC subscription, we do the payroll RTI, we do the quarterly VAT returns, etc. I prepare our in-house management accounts on the basis of 90% of the monthly fee is for work done during the year, and only 10% is the year end work. There's not really much of the monthly fee being paid in advance when you're doing so much monthly/quarterly. So I think it depends on just what time the accounting is spending during the year and whether or not they're paying software subscriptions etc.

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21st Jan 2018 10:19

Thank you all. I think Ken has probably best described the situation my prospect is likely to be in, which means I need to modify my fees downwards for the first year I actually do the year end work as well, as much of the bookkeeping will have been done by the current accountant.

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to Moonbeam
23rd Jan 2018 10:49

Just check you are happy with the previous accountant's work before reducing anything. Sad to say but some work is just bad or it may be the book keeping's been done by a junior and not yet tidied up by someone more senior - it may not just be "year end" work that is needed.

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