New client and historical bookkeeping issues

How would you deal with this - with the previous accountant or client or both?

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I have taken on a new Xero client from 1 Sept. The previous accountant will complete the year end to 31 Aug 2020. Obviously we both have access to Xero at the moment.

When looking at the bank reconciliation there are a number of items that are unreconciled going back to 2017 (for those that use Xero these are the orange ‘Unreconciled’ items on the Accounts Transaction screen.) There are also a number of Bills payable going back to 2017 that clearly are not valid  - Amazon, Post Office etc invoices 3 years old which can not be the case as these organisations dont offer credit.

Ideally I would like these all resolved before the 2020 accounts are filed. I am assuming that as they were not resolved in previous financial years they won’t get resolved this year. 

Would you mention this to the client or the previous accountant or both? Or just leave it and fix it later? The client has agreed to to pay me to fix what needs to be fixed but at the same time he has paid the previous accountant a fixed monthly fee for bookkeeping and bank and creditors rec’s are part of this.

I am conscious that professional courtesy requires me not bad mouth other accountants so I would be inclined to leave the client out of it altogether.

What are your thoughts?

Replies (8)

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By Kevin Kavanagh
10th Sep 2020 09:06

From what you say it doesn't look like any of this is material in terms of completing the outstanding accounts. So leave the accountant to finalise the 2020 accounts. Then, on your 'official' takeover you can review the current position, decide what if anything you think needs to be done and then agree with your client what you can do about it and how much it will cost.

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By Carl London
10th Sep 2020 09:16

Get client to ask the old accountants to do it if they have already paid for that service!

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By Cheshire
10th Sep 2020 09:56

Makes a nice change to see such issues before you really get started. I see this quite often, no changes made in software, just adjustments outwith. I would give the old Accountant a call and have a friendly chat. Depending on your approach Ive found most outgoing Accountants are willing to assist as long as you dont take the mickey.

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By ireallyshouldknowthisbut
10th Sep 2020 10:41

But but but but its in cloud software, it must be right!

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Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
11th Sep 2020 07:24

ireallyshouldknowthisbut wrote:

But but but but its in cloud software, it must be right!


Just take a photo with your smartphone and use the free app.

Personally, I'd raise it with the old accountant in the full expectation that they'll still be there when he's finished. Still, you never know.....

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By Rgab1947
18th Sep 2020 10:43

Amazon not giving credit? They always do when you return an item.

I have a client whose use of Amazon almost deserves a dedicated driver but who returns 50% of what ordered and delivered. A nightmare to reconcile his Amazon account. Note its Amazon business.

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7om
By Tom 7000
18th Sep 2020 12:24

99/100 work on the basis the accountants know what they are doing. My guess is the asked the client about this information 6 times and neve had a reply... Prepare yourself for the same attitude. Perhaps thats why the client is changing... the old ones are rubbish... they keep asking me questions...

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By maxmillion
01st Oct 2020 10:02

Amazon business does offer invoices on 30 day terms. We have that facility.
Also, we occasionally buy products from the Post Office shop online, usually stationery type items. They generate invoices.
Perhaps the goods were never received or there was a query on the cost. Should be relatively easy to resolve.

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