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Operating a client's bank account

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I'm a bookkeeper. My client is a small limited company with a turnover of about £100k p/a.

The owner/ MD is becoming more and more insistant that I take over the paying of suppliers and employees without his involvement and/or input."I trust you" is his attitude. I am unhappy that he wants nothing to do with this process and it will all devolve to me - with all the responsibilty that that entails.

Advice as to my position in this - and any workable alternatives that you have found sucessful, please. I can't be the only one who would rather stay away from this!

 

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RLI
By lionofludesch
25th Oct 2019 17:14

Tell him your PI insurance won't cover it and your professional body won't sanction it.

If you want to go a bit further, tell him he's bone idle and he needs to deal with the dull bits of business as well as the interesting bits.

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By ireallyshouldknowthisbut
25th Oct 2019 17:17

Don't is the short answer.

The words "I am sorry, but I cant offer that service" is the sort of approach to take. Don't make it a negotiation.

I am a chartered accountant and I wouldn't do it, in fact I think I might even be prohibited by my professional ethics. If you are a member of the AAT or similar perhaps check with them to see if you can wave the rule book at them.

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By Moonbeam
25th Oct 2019 17:23

As Lion says, your PI insurance won't cover you for this. I know myself, as I've had several (nice) clients ask me to do this over the years. Just tell the client this is the case very firmly. Suggest he asks a member of staff to do this instead, but don't be concerned for him apart from that. If he makes your life a misery because you won't do this, you will have to find alternative work. He sounds rather unreasonable as it is, so even if you stay he will probably be unpleasant about something else.

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By frankfx
26th Oct 2019 12:10

You could consider employer employee arrangement. Hours to suit.

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Replying to frankfx:
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By JoF
26th Oct 2019 12:16

Plus if they go down this route, ensuring they are on the Bank mandate with suitable restrictions (plus same restrictions via any online banking processes)

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Replying to frankfx:
RLI
By lionofludesch
26th Oct 2019 13:12

Quote:

You could consider employer employee arrangement. Hours to suit.

Could - yet I'm getting the impression that the OP doesn't want this work.

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By JDBENJAMIN
27th Oct 2019 13:38

I don't know what the problem is with this. I am not aware of anything in my PI or ICAEW rules that forbid this arrangement and I would be happy to take such work if offered. However, if you don't want to do it, just say you don't want to do it! Don't lie about why, just tell the truth!

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Replying to JDBENJAMIN:
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By paul.benny
28th Oct 2019 07:45

The OP describes themselves as book-keeper, so I doubt s/he is ACA.

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Replying to JDBENJAMIN:
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By johnt27
05th Nov 2019 13:29

Seem to be forgetting the client money rules...

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By downfieldpay
28th Oct 2019 21:03

Thank you to everyone who responded. Most helpful.

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By Matrix
28th Oct 2019 21:20

I do this for one client (but I am an officer) and one pro bono (so not a client).

Independent bookkeepers make bank payments for my clients, please would someone explain what the issues are? I have no intention of offering these services as I outsource all bookkeeping, I am just curious.

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Replying to Matrix:
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By paulwakefield1
29th Oct 2019 08:32

The biggest and most obvious risks are:

Paying the wrong person/entity
Paying the wrong amount
Getting caught by the "New bank account details" fraud
Causing a breach of client's overdraft limits

All of which are controllable to a greater or lesser degree but whether the risk./reward ratio is met is doubtful (for me anyway).

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Replying to paulwakefield1:
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By Matrix
29th Oct 2019 08:52

But why are accountants not allowed to do it? I just wondered if someone could flesh out the replies please.

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By paulwakefield1
29th Oct 2019 09:02

As far as I am aware, they can. These are the ICAEW requirements:

"A firm may make on-line payments or sign cheques on behalf of clients provided that:

the activity is of an administrative and non-discretionary nature;
payments are only made on the specific instructions of the client (obtaining written instructions to cover each disbursement provides an additional level of protection);
the process does not involve the firm initiating transactions or taking management decisions;
appropriate safeguards are applied and documented

Such a role cannot be undertaken for audit clients that are listed companies or significant affiliates of such companies as this is specifically precluded by the FRC Ethical Standard .

It is also prudent, especially, in relation to audit and review engagement clients, for the firm to have additional evidence showing that the client had authorised it to act in this capacity. It would therefore be advisable for the firm to ensure it is possible to verify both the consent and amounts involved from written records."

I haven't looked at PI insurers restrictions as it is not a service I offer. The bank accounts that I control where I am treasurer are outside of my practice.

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Replying to paulwakefield1:
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By WhichTyler
29th Oct 2019 09:18

I think it depends on what is being asked. If it is 'here is a list of suppliers and amounts, please can you log onto the bank and process the payments' it is much lower risk than 'people keep asking me for money, please can you decide how much to pay them and when'

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Replying to WhichTyler:
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By paulwakefield1
29th Oct 2019 09:25

I would absolutely agree with that. But the risk areas in my first post (certainly the first 2 or 3) still exist.

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Replying to paulwakefield1:
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By Matrix
29th Oct 2019 09:46

Thanks all. I am glad that ICAEW permits it and I have never checked with my insurer but I only do it where I am treasurer and the payments have been approved.

I just wondered why the previous responders were so against it.

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By C Graham
05th Nov 2019 11:19

why don't you set up the payments on online banking to save client the time/admin but then get him/her to log on and authorise the final push. That is fast for the client to do so he/she saves time, but as the final authoriser they would also be taking the responsibility, ie does not implicate you.

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By Matrix
05th Nov 2019 16:09

I am the only person with online banking.

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By tracey2412
05th Nov 2019 11:30

Abdication of responsibility I call it! But, some people are just like that:
I have done this as an authorised user on a client's bank account - as a limited company they amended the mandate to make me a user & I got my own log in etc. (It can take time as if the bank is different to yours, they need to do all the ID verification checks & can take awhile!)
Corporate online banking platforms (as opposed to 'just' business online banking) usually allow different levels of user - so with the right access in place, you would be able to create the payments ready to pay but not authorise your own payments. Someone else (presumably him) would have to authorise - but likely be able to do it as a bulk payment so shouldn't take too long!
If you have sent him a list & said 'it's ready online' he authorises on the understanding that he has checked & is happy & the final responsibility is his?
Would that work?

In cases where they want me to do it but the level of access / authorisation is not available on the bank platform, I just make sure I get an email in reply to a list to say they have checked & its fine. Not ideal, but it's real world.
Good luck finding a way!
PS - I also charge an extra fee a month for the responsibility of having access to the bank & all the extra security checks I have to follow to make sure it's extra safe whilst in my care. Hope that helps.

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By tracey2412
05th Nov 2019 11:30

Abdication of responsibility I call it! But, some people are just like that:
I have done this as an authorised user on a client's bank account - as a limited company they amended the mandate to make me a user & I got my own log in etc. (It can take time as if the bank is different to yours, they need to do all the ID verification checks & can take awhile!)
Corporate online banking platforms (as opposed to 'just' business online banking) usually allow different levels of user - so with the right access in place, you would be able to create the payments ready to pay but not authorise your own payments. Someone else (presumably him) would have to authorise - but likely be able to do it as a bulk payment so shouldn't take too long!
If you have sent him a list & said 'it's ready online' he authorises on the understanding that he has checked & is happy & the final responsibility is his?
Would that work?

In cases where they want me to do it but the level of access / authorisation is not available on the bank platform, I just make sure I get an email in reply to a list to say they have checked & its fine. Not ideal, but it's real world.
Good luck finding a way!
PS - I also charge an extra fee a month for the responsibility of having access to the bank & all the extra security checks I have to follow to make sure it's extra safe whilst in my care. Hope that helps.

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7om
By Tom 7000
05th Nov 2019 11:42

One mistake and you have to pay for it.
Get a new bookkeeper for him, or go on his payroll full time

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By johnt27
05th Nov 2019 13:32

You could use something like Telleroo to facilitate this. Your client would need to fund the Telleroo account and you can then make payments from there. Minimises the risk of you running off with the client's funds and less messy in terms of bank mandates etc

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By David Gordon FCCA
05th Nov 2019 16:37

This service is provided by many book-keeping firms/book-keepers:
I suspect many of us did this sort of thing when we first started out.
But:
If you are not specifically geared up for this service, you gently explain to the client that your firm is not set up for this. Offer to help him find him a reputable book-keeper.
I would suspect he has tried, without any joy.

But, but, but and but again:-
No careful person should take on this role except and unless, payments are first approved by the client before disbursement. Also, monthly accounts are signed off.

True parable from my discreditable past.
A colleague and unqualified accountant took on the role of company secretary for his client.
He signed, without too much thought, an HP agreement for the client in sum of £12,000.
The company went bust. The lender sued my colleague.
He talked to the creditor, he thought he had explained and the creditor accepted that he was just a professional Co Sec. So he did not turn up at the court.
The court ruled that because he had signed the agreement with just his personal name, with no "P.P. caveat" he was liable.
The moral is, we never pay or £commit anything for anyone to anyone, except and unless we have clear authority for the payment.

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