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New client

bank rec

I;ve just picked up a new client with  a turnover of £350k.  The accountants have been done to 31/12 by the previous agent as well as the VAT.  Year end is 31/3.

I'm slightly stunned that the bank doesnt reconcile and none of the in year accounting has been done apart from some payments and reecipts.

This client has come from a large high street firm of accountants.  Im slightly shocked that they  would complete a cash based VAT return wihtout a reconciled bank.

 

Is this common?

I now potentially have months of bank transactions to tick!  I have written to the previous accountants to ask for the last bank rec but I have a horrible feeling this was last completed at 31/03/18.   Surely the ourgoing accountants should do this.?  My clients has been paying £200 per month for book keeping and VAT.  Where they hav been missing a VAT purchase invoice in the past, it would seem they have created a transactions and called it 'dummy'.  What is wrong with people?

Or do I let my client work it out -  offer to do the work but let them know it should have been done by the previous accountant.  ARGH!

 

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25th Mar 2019 13:05

Option B, I think.

How much is it out ?

I'm never keen on taking jobs over from another accountant. I prefer brand new businesses. That's not to say that I never take them on and, indeed, some have become good clients.

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By thomas
25th Mar 2019 13:11

Its £5k out - not exactly £5k either.... Could be one or 100 transactions.. I have no way of knowing.

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to thomas
25th Mar 2019 13:30

thomas wrote:

Its £5k out - not exactly £5k either.... Could be one or 100 transactions.. I have no way of knowing.

Pffft ! That's a lot.

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25th Mar 2019 13:44

Absolutely no excuse. The bank account should be reconciled, to the penny, each and every month, in my opinion.
I took over my old mentors remaining practice, in 2002. He'd never used; a calculator or computer and found it quite simple to prepare manual accounts, which always balanced, without question, to the penny.
This "attitude", by some in the profession, simply shows a complete lack of pride in the work and, more importantly, scant respect for the instructing client.
I'd be writing back to the former agent asking them to provide records which included a reconciled bank account, if nothing else. If they are members of a professional body, I'd be tempted to write to them, to seek their opinion as to what is and what is not acceptable these days.
In football parlance, these people bring the profession into disrepute and, have no place within it.

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25th Mar 2019 14:24

I would advise your client of the additional work you'll need to do and that it is work the previous accountant ought to have completed already.

If the client has paid fees for this work and it's not been done, they should be entitled to seek repayment. Don't you get involved with that side though, it's a legal issue and outwith your expertise.

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By thomas
to Duggimon
25th Mar 2019 14:36

Its tricky though isn't it? New client, he needs to build a relationship with me to trust what I'm saying. I dont know how long it will take for me to reconcile the bank from April - December. It could be an error in April or missing transactions through out the year.
I think most of the accounting will need to be re-done.
I should have waited to take it over on 01/04/19.

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to thomas
25th Mar 2019 14:47

I don't follow your thoughts that any of this "is tricky".

Your client instructed the previous agents to prepare books and records in accordance with generally accepted principles. I'd include in those principles "balanced accounts".

Assuming that the bank reconciliation is incorrect, by around £5,000, what is to say that the Vat returns don't include inaccuracies, of around£833, at some point?

The client invited you to take over, part way through the year. Presumably, you didn't influence the timing of the change?

It's time to stand up and be counted, in my opinion.

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to thomas
25th Mar 2019 15:03

thomas wrote:

Its tricky though isn't it? New client, he needs to build a relationship with me to trust what I'm saying. I dont know how long it will take for me to reconcile the bank from April - December. It could be an error in April or missing transactions through out the year.
I think most of the accounting will need to be re-done.
I should have waited to take it over on 01/04/19.

Nothing tricky about telling the client he's made a smart move by dumping his carp accountant.

Seriously - if you think it's tricky, you need to tell him you won't take him on. It's either that, or you do the work for free and I don't see why you should.

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25th Mar 2019 18:57

Most of the clients who move to me from other accounting firms have done so because of poor service and no help with their awful bookkeeping. So your description of the situation is true for a large number of businesses. A new prospect came to me recently, and I advised him to stay with his current accountants until his last set of accounts were done. However, these are so late that I will inherit a nightmare when he eventually comes over. I've had a quick look at the bookkeeping and can see it will need lots of corrections and I will tell him when he gets back to me that it will cost to sort this out.

I've spent too much time unpaid sorting out people's accounts because their previous accountant didn't. So it's time to start charging for this work. You must do the same. We aren't social workers (well, not unpaid ones!)

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