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Reasonable time for professional clearance

What is reasonable

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Ex-Client demanding immediate professional clearance as accounts are due soon.

What is deemed to be reasonable 

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By Robert Hurn
29th May 2020 14:00

I have always believed 4 weeks to be reasonable, though try to send out sooner. If a client is determined to leave the sooner, he/she is out the door the better.

I don't think accounts being due is an issue for you. Had the client presented you with the relevant information in a timely manner, doubtless the accounts would have been filed by now

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By Truthsayer
29th May 2020 14:02

It should be done promptly and given priority, so why not just do it. Or are you just looking for excuses to delay it to spite the ex-client?

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By the_drookit_dug
29th May 2020 14:32

Why not give them professional clearance immediately by email, and if they're looking for info that will take time to gather, indicate that it will follow.

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By ireallyshouldknowthisbut
29th May 2020 14:38

I do mine same day, or following day. They are normally being pushed out anyhow.

It ought not take more than half an hour or so unless your systems are really poor, or its a really big client.

What is the point in dragging it out?

Most of ours coming in get done inside of 7 days. We get the odd one drag out longer but a lack of basic customer service is often why they are leaving. Eg taking 2 weeks to respond to an email and the client is hacked off with it.

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Replying to ireallyshouldknowthisbut:
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By taxwizard
29th May 2020 14:55

Not dragging it out as several companies involved and busy schedule (after taking a break) plus we are owed small amount of money. I respond to people who ask nicely not making orders.

I would have thought 7-10 days is reasonable ?

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Replying to taxwizard:
By Moonbeam
29th May 2020 15:11

Ah ha! My response to client would be that as soon as he paid in full I would provide the data within 2 working days.

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Replying to Moonbeam:
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By taxwizard
29th May 2020 15:47

I am ACCA and looking at the legal ownership guidance. I am unable to withhold anything or have much of a lien so only recourse is legal. I am not sure if under different accounting bodies as I have seen many accountants advising the same thing on similar questions on this forum

I don't mind helping my fellow accountant to do her job but detest strongly demands from a difficult client (whom I disengaged from in the first place) that I have to provide information immediately

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By Matrix
29th May 2020 15:58

There is nothing to prevent you providing professional clearance and then following Moonbeam’s suggestion for the rest of the info. I understand that you can’t hang onto their records but you can hang onto the records you have prepared.

I think you mean that it is the handover info and not the professional clearance which the client has chased you for and I think you are in a strong position to get paid now so make the most of it.

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Replying to Matrix:
By ireallyshouldknowthisbut
29th May 2020 16:30

Well I'd certainly get paid first.

A week is perfectly reasonable in my opinion.

I personally just like getting them done myself. All my clients are small and it doesn't take long to ping over a few documents.

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Replying to Matrix:
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By taxwizard
29th May 2020 17:22

I understand the TB, Company Accounts and Corporation Tax Records would be part of professional clearance but Accruals, Fixed Asset Register, Bank Rec, and Directors Loan account can be provided later once payment has been made ?

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Replying to taxwizard:
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By Matrix
29th May 2020 17:55

Where did you get that from?

Handover information is separate from professional clearance but may be requested at the same time. If you are so worried about being correct then check with ACCA but I would just provide the clearance, no handover info yet and prioritise getting paid.

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Replying to Matrix:
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By taxwizard
29th May 2020 21:52

I have checked with ACCA and they said basically no lien is allowed. Furthermore English law doesn't seem to give much scope.

no lien can exist over:

a the books or documents of a registered company that, either by
statute or by the articles of association of the company, have to

be available for public inspection or to be kept at the registered
office or some other specified place or be dealt with in any
special way;

b accounting records within section 386 of the Companies Act
2006; or

c the VAT returns of any business (excluding photocopies)

Accounting records would mean virtually everything including Bank Rec, and other control accounts and Fixed Asset Register.

I can withhold tax returns and bank statements that related to the unincorporated business plus other document like sales / supplier contracts that relate to the Limited company.

I was thinking of passing bits of information now so they can file the accounts and rest later but don't think I can even do that.

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Replying to taxwizard:
ALISK
By atleastisoundknowledgable...
29th May 2020 22:25

I would say that bank recs and FAR etc aren’t ‘accounting records’, but are your own working papers. If you created them, their yours.

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Replying to atleastisoundknowledgable...:
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By taxwizard
31st May 2020 13:47

For incorporated businesses - bank reconciliation and Fixed Assets are considered to be accounting records. I think Directors Loan Account as well.

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Replying to taxwizard:
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By Matrix
29th May 2020 22:57

They can get a 3 month extension. It is not your problem.

Provide the professional clearance (a one sentence letter with no attachments/enclosures) and tell the ex client that you are too busy dealing with the government grants to provide the handover information at the moment and please would they settle the outstanding fees since your business needs this money.

The question was about timing, not about liens. Although if you are obsessing about institute rules, what did it say about all this in your disengagement letter?

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Replying to Matrix:
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By taxwizard
31st May 2020 13:46

Minimum required would be professional clearance and the Accounts and TB.

They have already had one three month extension though I think you can always request another three months

I may have a lien on some of the documents but what I don't want to risk them complaining to my accounting body.

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By mrme89
30th May 2020 00:15

I don’t see how been bitter and problematic helps you.

The sooner you can get rid the better for everyone.

Clients often come back when they realise the grass isn’t greener. Acting like this ensure they won’t and may not look good if you rely on local reputation.

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Replying to mrme89:
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By adam.arca
30th May 2020 09:25

I think you’re reading too much into this.

The OP isn’t saying they’re bitter and twisted, just busy and I’m 100% with them. Professionals should try and be fair to all clients and that means operating on a strict FIFO basis, not on a who shouts loudest basis.

For my money, 2 weeks is entirely reasonable and as long as 4 isn’t necessarily unreasonable if it’s a particularly busy time.

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Replying to adam.arca:
By mrme89
30th May 2020 09:41

I know that the OP didn’t explicitly say it, it’s just how they come across.

Professional clearance (not to be confused with handover information) is a couple of lines at most. I don’t see why this aspect should take weeks. You may end up wasting longer than it takes to write the clearance letter dealing with the client chasing for it.

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Replying to mrme89:
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By adam.arca
30th May 2020 15:18

Yes, but you just know what will happen as soon as the OP gives professional clearance but not the handover info, especially with the bolshier sort of client.

The OP has also indicated that s/he is with ACCA which cuts its members off at the knee on this topic, so best really to roll both into one exercise. And that being the case and given that will be 1/2 to 1 hour of an exercise, that should wait its turn.

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Replying to adam.arca:
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By taxwizard
31st May 2020 13:51

You are right, I rather give both at the same time but hold onto to some of the info until I get paid. There is still quite a lot of information to provide if we include FA Register, Directors loan,, accruals etc I have to put in a right format especially for Directors Loan.

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By Mr_awol
01st Jun 2020 17:06

When I send requests out I often say that if I haven't heard back in two weeks i'll assume they have no objections and 'may' commence acting anyway. I think it'[s only reasonable to give them a couple of weeks to get at least a holding reply.

On the odd occasion I get one incoming, I try and bash it out sharpish. That said, I have one recently that took me forever to send out - but that was largely because it came in the last week of March.

I have a good relationship with most of the local firms and try to give a decent pack out, promptly, and expect the same in return. I have been willing to send backups and all sorts to assist a smooth transition although of course if another firm is unhelpful to me then they get added to 'the list' and in future receive the same back. Actually there is probably only one name on that list these days.

I think because of our location, the fact that I socialise with partners from several local firms and the fact that we attend the same courses, etc, it's uncommon to be petty about clients changing accountants.

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Replying to Mr_awol:
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By taxwizard
02nd Jun 2020 13:49

Giving professional clearance is easy part trying to determine what document to give when their amounts owed is the difficult part.

If the accountant asks nicely then would reciprocate but when in this case accountant wants all the handover information immediately which there is a lot then this gets up my goat

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Replying to taxwizard:
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By Mr_awol
02nd Jun 2020 15:52

Oh I agree. Having hardly lost any clients in the last few years I've had two since March.

One of them went to an advisor who I would describe as very entitled, and also very sure of themselves - clearance by email chased up after two days, despite it being at the height of the demand on our services from clients regarding Covid. If it hadn't been for the need to get payroll up and running quickly I'd have probably strung it out just to put them in their place. They moaned at not getting a backup (they were taking over from new tax year so technically the info I did provide was more generous than some on here would provide).

The new person (sole practitioner, doesn't seem to have any staff looking them up) then started copying the client in on their 'reminders' for stuff that they either hadn't asked for or which was a non-urgent part of the handover pack which they'd already been told was coming in the next week or so and 'demanded' a response by email within the following 24 hours. Naturally I put it all together, stuck it by reception for a few days then posted it second class.

The other one went to a one man band I know quite well but haven't had any gains or losses from/to before. They got the urgent stuff as soon as I could, were understanding, and got the rest shortly thereafter (albeit a bit later than I would have liked). I volunteered backups, scanned/saved a comprehensive handover pack and emailed them a secure download link so that they could save as much of it electronically as they might want.

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Replying to Mr_awol:
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By taxwizard
02nd Jun 2020 17:23

Sorry to hear losing couple of clients.

Yes I have hardly lost clients to other accountant hence why I am unsure of the procedure - it is a learning curve and know what to do next time as just lost another client this week. Looks like many accountants and not exactly aware either in terms of what to give or not to give as giving too much may leave them exposed if say you do not depart with the client in good terms. In this case the accountant (AAT) is trying to score points and look good in front of the client.

Do you give a breakdown of all the ledgers and backups as well ? Is asking for directors loan account break up common as can't recall seeing it before ?

I have another question on this matter but think I will post this as a separate question

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By Crouchy
02nd Jun 2020 16:20

Lifes too short - just provide the info and move on

if fees are owing, threaten / take legal action to recover

just because you dissengaged, doesn't mean the ex client is going to be happy about it! as far as they are concerned, they've got the hassle of appointing someone else and will want to make sure that the new firm can carry on as easily as possible.

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Replying to Crouchy:
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By taxwizard
02nd Jun 2020 17:29

Yes maybe you are right.

There is lot more to this and wouldn't want to bore you with the details. I am nice guy but when someone is disrespectful and ungrateful I do not want to go out of my way to help them be it client or another accountant. Yes I will send info what I am obliged to send by my accounting body regulation and the companies act but no more.

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