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Too Much Monkey Business?

Extract a TB; feed it through analysis, control accounts and ETB. Are we doing too much?

Didn't find your answer?

Well, the question's in the intro.

Sub £1,000 fee for FRS105 accounts. We start with the transactional TB and put the nominal ledger through the mincer that is our own internal (XL) working papers.

All rather old-school, I suppose, but re-analysing, summarising, and balancing via control accounts more often than not produces wildy different results from the push-button accounts output.

Are we doing too much? Do other practitioners bother with working papers and control accounts? Or ought we simply rely upon the output TB / accounts from an accounting package as sacrosant? 

Replies (75)

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By Paul Crowley
22nd Nov 2021 19:47

I do similar to you
Start an Excel extended trial balance with clients TB
Then column 2 is ammending for incorrect opening balances to get BF profit and loss correct. Then next couple of columns are journals for corrections of errors, reanalysis and merging P & L accounts
(Sage users usually have 5 versions of motor expnses)
Then final columns for debtors and creditors, depreciation and Corporation tax
Final version nothing like the Sage TB
Final version goes into my software
A journal provided to client, but never done correctly hence column 2

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Replying to Paul Crowley:
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By Hugo Fair
22nd Nov 2021 19:54

Which is why you're so looking forward to MTD in all its future incarnations?

I guess I'msorry's post hides a different question along the lines of ... For how long will we continue to do things correctly, when HMRC (via MTD) and the software suppliers (via ad campaigns) tell taxpayers that it's not necessary?

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Replying to Hugo Fair:
RLI
By lionofludesch
23rd Nov 2021 05:56

Hugo Fair wrote:

Which is why you're so looking forward to MTD in all its future incarnations?

I guess I'msorry's post hides a different question along the lines of ... For how long will we continue to do things correctly, when HMRC (via MTD) and the software suppliers (via ad campaigns) tell taxpayers that it's not necessary?

Which, at the heart of it all, is why I retired.

I don't agree with the HMRC mantra that MTD will reduce errors. I think there'll be more. A lot more.

But, if nobody appreciates the value of my work in correcting those errors, I don't see any point in doing it.

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Replying to Hugo Fair:
By tonyaustin
26th Nov 2021 12:30

Presumably with MTD, you will submit the client's figures as presented and then produce the annual accounts in the normal way. HMRC will be swamped with 4 sets of quarterly figures that bear little relationship to the final figures. Next stage, I guess, will be everyone must be on a cash basis paying tax quarterly once HMRC have estimated how that will impact on their cashflow. Then you will have businesses manipulating when they invoice customers and pay suppliers to get the best cash flow to defer paying tax. Then there will be anti-avoidance legislation to make it all more complicated. Then we start all over again.

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Replying to tonyaustin:
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By Hugo Fair
26th Nov 2021 21:34

Whilst I can't disagree with your synopsis of what is the 'human condition' applied to the collection of taxes, the same cyclical arms-race is evident in most arenas where competitive spirits remain untrammelled. You only have to look at the complex schemes & rules invented for salespeople's commissions (trying to prevent 'sandbagging' and other tricks of their trade).

And that's the problem IMHO outlined in OP ... the rules of engagement (between taxpayer and HMRC) are being subverted by the focus on a tick-box mentality with deadlines/etc becoming more important than any understanding by the taxpayer or the accuracy of filed figures.
And the question is/was ... where do we draw the (battle-)lines in moving forward, whilst trying to retain some professional pride and belief in what we do?

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Replying to Paul Crowley:
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By bernard michael
23rd Nov 2021 09:29

Paul Crowley wrote:

I do similar to you
Start an Excel extended trial balance with clients TB
Then column 2 is ammending for incorrect opening balances to get BF profit and loss correct. Then next couple of columns are journals for corrections of errors, reanalysis and merging P & L accounts
(Sage users usually have 5 versions of motor expnses)
Then final columns for debtors and creditors, depreciation and Corporation tax
Final version nothing like the Sage TB
Final version goes into my software
A journal provided to client, but never done correctly hence column 2

Thanks (1)
Replying to Paul Crowley:
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By bernard michael
23rd Nov 2021 09:28

Paul Crowley wrote:

I do similar to you
Start an Excel extended trial balance with clients TB
Then column 2 is ammending for incorrect opening balances to get BF profit and loss correct. Then next couple of columns are journals for corrections of errors, reanalysis and merging P & L accounts
(Sage users usually have 5 versions of motor expnses)
Then final columns for debtors and creditors, depreciation and Corporation tax
Final version nothing like the Sage TB
Final version goes into my software
A journal provided to client, but never done correctly hence column 2


Exactly what I do and I always make the client put through the various corrective journals. This makes sure they understand and hopefully learn from their errors (they seldom do)
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By Andy556
22nd Nov 2021 20:24

I do the same as you and would hopefully expect everyone to do the same. I guess there are people out there who put in a disclaimer and are happy with that.

If any accountants relied on the output TB from the clients bookkeeping that would be a pretty poor standard.

I would assume it's impossible to do the job correctly without doing working papers.

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ALISK
By atleastisoundknowledgable...
23rd Nov 2021 08:29

We do excel WPs for every job - I want to prove every item on the Balance Sheet either with control workings or reconciliations to a statement etc. it’s just getting harder & harder to do that within budget of ever decreasing (or at least not increasing with wage inflation) fees.

It would be so much easier to be the firm (Ed. Should we use the term ‘firm’? company would be better?) just just imports the TB with no work done. Actually, firm can be used - some of the handover info I receive is shocking. A few weeks ago I got a handover, the previous accountants charged £1,750 for literally typing the Sage TB into their Accts Prod. Negative HP balances, negative cash, DLA dr in the stats as a negative LTL as that’s where the Sage Balance Sheet had it, CA note had negative figures in it … I’d quoted £900 and did an infinitely better job.

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Replying to atleastisoundknowledgable...:
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By the_fishmonger
23rd Nov 2021 09:39

There's an apparent consensus here that you still need to:
- prove controls on the BS/SOFA
- make sure P&L comparatives look right
- look for the material P&L mis-classifications (capex in MX or Repairs!)
- journal everything you find and prepare some accounts

The problem is the powers that be show no will to do anything about the quality of accounts. This seems especially so for the Small and Micro regimes. For what many sets of filed accounts are worth, we may as well do away with the filing requirement below medium sized.

If someone* looked at every set of accounts filed at CoHo, they could very quickly stop the TB to Accts Prod charlatans by hitting them with fines for aiding and abetting the filing of crud.

* would it really need that many capable (possibly recently retired and bored) accountants more than 20 mins per set to identify the worst of it? They could even do it remotely, so no office costs!

Thanks (3)
Replying to the_fishmonger:
ALISK
By atleastisoundknowledgable...
27th Nov 2021 18:47

the_fishmonger wrote:

If someone* looked at every set of accounts filed at CoHo, they could very quickly stop the TB to Accts Prod charlatans by hitting them with fines for aiding and abetting the filing of crud.

* would it really need that many capable (possibly recently retired and bored) accountants more than 20 mins per set to identify the worst of it? They could even do it remotely, so no office costs!

Excellent idea

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Replying to atleastisoundknowledgable...:
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By Paul Crowley
23rd Nov 2021 09:42

Same experience with the takeover of a partnership from a Nationally known accounting name
Accounts exactly equalled the bookkeeper's TB
Bookkeeper introduced by the accounts firm
Complete garbage. Fictional bank loan accounts, no accounts review at all.

Thanks (3)
Routemaster image
By tom123
23rd Nov 2021 08:30

With my management accounts hat on (there is the caveat..)

If everyone is going to be using cloud software like Xero, (or at least for those that are) would you not post any relevant journals directly into Xero, to end up with a TB you are happy with, and then move that to your accounts production software?

Taking it out, into Excel or other systems, then working in that system, does feel like duplication.

I know this is fairy land, I suppose, but I feel there should be scope to cut a stage out - at least in theory.

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Replying to tom123:
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By paulwakefield1
23rd Nov 2021 08:38

That's what I do with my Xero based clients (apart from journals for management accounts purposes only). Then refresh the TBs in Excel for management accounts production.

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Replying to tom123:
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By Andy556
23rd Nov 2021 08:43

Yes that's what we do but we still do working papers in Excel to prove that the balance sheet items are correct.

It has been known that clients change Xero for the year that we've finalised even if we have put a lock date on.

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Replying to Andy556:
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By atleastisoundknowledgable...
23rd Nov 2021 10:11

Andy556 wrote:

Yes that's what we do but we still do working papers in Excel to prove that the balance sheet items are correct.

Snap

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Replying to Andy556:
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By paulwakefield1
23rd Nov 2021 10:28

Similar.

I am lucky that my clients have excellent in house bookkeepers and so the number of journals necessary is limited. That leaves Excel free for a TB review/documentation function, any necessary backing schedules and preparation of management accounts.

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Replying to tom123:
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By Paul Crowley
23rd Nov 2021 09:48

You will know what you did in Xero
Clients do not know what their bookkeepers do
2 errors yes it could be but it then becomes 2 stage process
100 journals and the ETB really is quicker

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By Catherine Newman
23rd Nov 2021 08:43

I have very few limited companies. I put the data into Quickbooks myself as I want to know it's right and that debtors, for example aren't included in sales for the next year.

It can problematic in the year you take a new client on nut most of them were with me at the start.

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By Winnie Wiggleroom
23rd Nov 2021 09:33

Bit confused - Why would you not just get the TB correct in the first place and then download it?

Of course it depends on the client and what control accounts you are talking about, I certainly would not just rely on the TB from the client but makes more sense to get it right at source, there might be the odd bit of excel work work required for one of the control accounts sometimes but usually it can be done in the software

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Replying to Winnie Wiggleroom:
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By I'msorryIhaven'taclue
23rd Nov 2021 10:17

Winnie Wiggleroom wrote:

Bit confused - Why would you not just get the TB correct in the first place and then download it?

I guess my short answer to that is back in the tick and bash days when training to be audit seniors we were always instructed not to alter or clients' records. Put a red or a green mark next to them, but do not amend.

The longer answer is that many clients' QB/Sage/Xero records are so patchy that we've given up trying to align them to the accounts we prepare. I prefer instead to come at it from the opposite direction, by populating my left-most ETB columns with my closing balance sheet figures from the previous year's accounts and then entering the client's transactional TB for the year being prepared (and then go from there with adjusting columns for client mis-posts / control a/c differences / other accuals/dep'n etc journals just as Paul and others do). Effectively the transactional TB is a record of bookkeeping entries throughout the year - nothing more, nothing less.

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Replying to I'msorryIhaven'taclue:
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By paulwakefield1
23rd Nov 2021 10:34

Interesting and I can see your point.

I have to say that I always try to ensure that the client's accounting systems reflect at least the year end accounts position. Partly in case I get run over by the proverbial bus, partly for Companies Act compliance (as I see it - looser interpretations are available) where they are companies and partly because I think they should agree. :-)

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Replying to paulwakefield1:
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By I'msorryIhaven'taclue
23rd Nov 2021 11:17

I guess I'm interpreting Companies Act compliance the same way I did when we used manual Cathedral ledgers ie a set of double entry books should suffice, and production of accounts need not be instantaneous.

Many of the accounting package clients without bookkeepers must lose a fortune by eg posting sales invoices to the previous year (seems quite common whenever they can't be bothered to close down the year). Neither do many seem bothered about reconciling their customer or supplier accounts (so inevitably they end up under-collecting & over-paying). Trouble is when you start putting such matters right it's so often the thin edge of the wedge; work which either needs doing properly or not at all. What's sparked me over this is a 2 company client whose bookkeeper was let go at the start of lockdown - saving the client £3k per company pa - whereupon the client himself took over the duties. Even with reduced activity and low t/o the result is a convoluted mess; however the client is too much of a freeloader to want to pay us to correct the books.

I'm fast coming to the conclusion that writing off the resultant control differences in the Revenue's favour is the best approach in such cases.

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Replying to I'msorryIhaven'taclue:
paddle steamer
By DJKL
23rd Nov 2021 14:24

I prefer Twinlock sales and purchase ledgers, I still have a few metal corner ledgers scuffing about the office even now.

The largest manual accounting system I ever came across was an egg wholesaler, they had thousands of customers on manual cards ( teas trolleys full, cards stored in alphabetic dividers on their edge)

They kept the control accounts square by effectively splitting the sales ledger into 4 by alphabet and running four control accounts in the nominal, when we audited we got hand written lists of balances that squared to the control accounts to the penny (their FD had trained in our office many moons previous so there was a running competition to try to find anything wrong with the debits and credits (my year we found nothing, the only audit points were re provisions etc))

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Replying to I'msorryIhaven'taclue:
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By the_fishmonger
23rd Nov 2021 10:59

[quote=I'msorryIhaven'taclue]

...Put a red or a green mark next to them...

Did the instruction include "so the client can see you've done something with it" perchance? I got the impression our partners were paranoid

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Replying to I'msorryIhaven'taclue:
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By Winnie Wiggleroom
23rd Nov 2021 11:02

I'msorryIhaven'taclue wrote:

We might have worked that way in the days when the only clouds we knew about were the dark menacing kind and the occasional white fluffy variety but in these more enlightened times it sounds to me as if you are making more work for yourself by not solving the issue at source - ie get the book-keeping right and everything else follows much quicker and easier. IMHO thats the key to being able to provide a reasonably priced service

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Replying to Winnie Wiggleroom:
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By adam.arca
23rd Nov 2021 13:14

Winnie Wiggleroom wrote:

We might have worked that way in the days when the only clouds we knew about were the dark menacing kind and the occasional white fluffy variety but in these more enlightened times it sounds to me as if you are making more work for yourself by not solving the issue at source - ie get the book-keeping right and everything else follows much quicker and easier. IMHO thats the key to being able to provide a reasonably priced service

I too date from that era. I trust, when you say enlightened about modern times, what you really mean is "enlightened" (rolls eyes).

It's horses for courses and there is no one size fits all (HMRC, please take note).

But if clients aren't the slightest bit interested and want to treat their Sage / Xero / QBO as a glorified cash book, then I'm happy to let them and the cost-efficient approach is to leave their side of things well alone as a bookkeeping-only operation and keep the accounts in our software.

Things might change because of MTD but, fundamentally, the old saying about dragging horses to water will still be just as true after MTD as it was before or indeed as it was 5,000 years ago when horses were being domesticated.

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Replying to adam.arca:
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By Paul Crowley
23rd Nov 2021 13:41

Good description of what we tend to get
a glorified cash book
The cheapest sage misses one of the ledger systems, and has no year end close down.
Some clients and some bookkeepers are good and do a fair jo. These tend to be people who have done it for years
But MTD for VAT brought in the reluctant who do not understand double entry and have probably never considered that there is any point in looking at the balance sheet

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Replying to I'msorryIhaven'taclue:
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By adam.arca
23rd Nov 2021 13:07

I'msorryIhaven'taclue wrote:

The longer answer is that many clients' QB/Sage/Xero records are so patchy that we've given up trying to align them to the accounts we prepare.

That's exactly how I see it too.

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Replying to adam.arca:
By ireallyshouldknowthisbut
23rd Nov 2021 13:59

There are surely two options here:

(a) the client is a no-hoper, so you are doing incomplete records from poorly used software and post adjusting journals
(b) You put some effort in to improve the records. So you adjust them in the books, and explain what you have done and why.

if you choose the first path, its really no better than a box of receipts and there is zero chance of improvement.
If you choose the second then you can train the client into keeping a decent set of books.

I tend to go very much with the second option, albeit some clients we just go from the cashbook as its pointless doing something else. Or we pack them off to a bookkeeper.

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Replying to ireallyshouldknowthisbut:
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By adam.arca
23rd Nov 2021 14:44

It's a spectrum, though, isn't it in reality?

I would split your a) into 2 categories:

A1: utter no hopers who you either don't take on or you get rid once you realise how bad they are, and

A2: OK to decent clients who are pleasant, pay on time and try their best but just aren't interested in or particularly competent at bookkeeping (and why should they be?).

I find my method of keeping my accounts separate from their bookkeeping works best for the A2 sort of client. Other opinions are of course available but there certainly seem to be plenty of other posters on this thread who think the same.

I've also got plenty of clients who fall into your b) btw just in case you're wondering! I just feel that clients should bookkeep to live and emphatically not live to bookkeep, so I'm going to find the solution that works for them (and, going slightly off topic here, not the one for the absolute [***] at HMRC who dreamt up MTD).

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Replying to I'msorryIhaven'taclue:
ALISK
By atleastisoundknowledgable...
24th Nov 2021 15:28

I'msorryIhaven'taclue wrote:

I prefer instead to come at it from the opposite direction, by populating my left-most ETB columns with my closing balance sheet figures from the previous year's accounts and then entering the client's transactional TB for the year being prepared (and then go from there with adjusting columns for client mis-posts / control a/c differences / other accuals/dep'n etc journals just as Paul and others do). Effectively the transactional TB is a record of bookkeeping entries throughout the year - nothing more, nothing less.

The problem here is what if the client posts something accidently in the previous year. A few years ago I took over a Sage client who did their own bookkeeping, accountants did as you do. A massive sale had been posted in, say, 2001 not 2010. The sale & resultant VAT had never been picked up by the accountants because they only looked at CY transactions. Client didn't tick 'late claims' on the VAT Returns so the vat hadn't been declared. When did the accounts, I looked at the final TB and noticed £45k of unreported VAT and additional CT of £43k on the undeclared sales.

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Replying to atleastisoundknowledgable...:
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By Winnie Wiggleroom
24th Nov 2021 15:33

atleastisoundknowledgable... wrote:

I'msorryIhaven'taclue wrote:

I prefer instead to come at it from the opposite direction, by populating my left-most ETB columns with my closing balance sheet figures from the previous year's accounts and then entering the client's transactional TB for the year being prepared (and then go from there with adjusting columns for client mis-posts / control a/c differences / other accuals/dep'n etc journals just as Paul and others do). Effectively the transactional TB is a record of bookkeeping entries throughout the year - nothing more, nothing less.

The problem here is what if the client posts something accidently in the previous year. A few years ago I took over a Sage client who did their own bookkeeping, accountants did as you do. A massive sale had been posted in, say, 2001 not 2010. The sale & resultant VAT had never been picked up by the accountants because they only looked at CY transactions. Client didn't tick 'late claims' on the VAT Returns so the vat hadn't been declared. When did the accounts, I looked at the final TB and noticed £45k of unreported VAT and additional CT of £43k on the undeclared sales.

Precisely - the very first check I do is to compare the net assets in the software in the prior year with the stat accounts to make sure they agree.

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Replying to atleastisoundknowledgable...:
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By Paul Crowley
26th Nov 2021 13:27

Concur
The old desktop version would probably pick it up as there was a shutdown process

Current cloud stuff needs a full current TB

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Tornado
By Tornado
23rd Nov 2021 13:18

I am like other posters here, as I do tend to check detail and accuracy of figures given to me and then I can attach a certificate to the Accounts to say that I have done this.

If we are looking at MTD (which is ONLY concerned with taxation), then it is clear that HMRC are quite happy to accept information provided by taxpayers directly from their accounting software, whether it is correct or not.

The point to remember is that Accounts and many other documents are prepared for purposes other than taxation, so a drop in standards would not really be acceptable unless every set of Accounts prepared came with a certificate to say that it was 'unaudited' and that you took no responsibility for the figures.

The often forgotten side effect of MTD is that it will force down standards if left to its own devices, and part company with the high standards that apply just about everywhere else in Financial Services, particularly when dealing with Limited Companies.

I and many others will be spit between going with the flow and lowering our standards to suit MTD or stick to our guns and do it all properly with the real danger that we will not be able to cope with hundreds/thousands of additional submissions that MTD for ITSA (and later MTD for CT) will force us to do.

I will continue as I am, keeping standards high and being able to sleep at night in the firm belief that HMRC will HAVE to back off with their ridiculous MTD plans and at least raise the MTD for ITSA threshold to £85,000 or better still, abandon the project altogether and develop the Self Assessment system which already works very well indeed.

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By johnt27
23rd Nov 2021 17:12

For me this is a matter of professional pride and risk management. The output of the compliance process for clients, which may well have your firm name on, is the set of financial statements and the tax comp/return that accompany it.

The various professional bodies should, in theory, be weeding out those accountants that take short cuts, getting accounts and disclosures wrong and HMRC constantly threaten to tighten the reins on rogue agents who are submitting rubbish. I'm not sure the reality of either holds up.

Key for me though is the process of getting from the client's records to that final output. I don't think I've knocked out an ETB on paper or Excel since the early days of my training in the early 2000's. In the early days when Sage 50 was still king of the hill we used to take the TB and post it straight into the accounts production software. A series of Excel working papers would support control account recs, accruals/prepayments etc and journals would be posted direct to the software. For incomplete records we adopted OCRex (now AutoEntry) for bank statement extraction into excel and then could import this into AP. Same control account shenanigans and you get back to the same place as above.

Now the process is even more digitised - incomplete records are scanned to death and thrown into Dext Prepare/Xero for posting, much of which can be automated once you've invested the time, which then feeds into MyWorkpapers. All others are put direct into MyWorkpapers which summarises and posts all adjustments as we work through various sections identifying corrections.

Anything on Xero/QBO is prescreened using Dext Precision - we all know which clients are awful at bookkeeping but this gives us tangible evidence of the fact and they must reach a threshold before we start the work. Clients records that don't reach the standard can be fixed for a fee, we can offer training (for a fee) or they go back to the client to fix.

Fees are up and recoveries are up.

For MTD for IT/CT we'll be doing more pre-screening of client data for missed tax planning opportunities and offering pre-filing checks in the same way we've done for VAT returns since the beginning of time. It's still not clear what approach HMRC will take to the instance of quarterly information being submitted which then wildly varies to the final year end submission. The only incentive for clients to get it right is if it's going to cost them more in the short term arising from increased tax payments

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Replying to johnt27:
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By lionofludesch
23rd Nov 2021 17:26

johnt27 wrote:

For me this is a matter of professional pride and risk management. The output of the compliance process for clients, which may well have your firm name on, is the set of financial statements and the tax comp/return that accompany it.

The various professional bodies should, in theory, be weeding out those accountants that take short cuts, getting accounts and disclosures wrong .....

Tricky, of course, if these rogues aren't members.

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Replying to lionofludesch:
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By johnt27
23rd Nov 2021 19:36

Indeed, but I'd rather not pick at that sore for now...

The reality being I'm extremely unlikely to competing in the same market and I'm certainly not interested in the race to the bottom on compliance fees.

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By I'msorryIhaven'taclue
24th Nov 2021 09:36

I'm grateful to everyone for your replies.

Seems we're performing to the same standard as many others are doing by checking the nominal ledger to correct misposts and then reconciling the client's TB output through our working paper summaries and control accounts.

Interesting that so many practitioners try to align their clients' accounting software to the resultant accounts. I have three issues with that:

1. That's the bookkeeper's job, so for DIY directors who've saved themselves £3k on the cost of a bookkeeper and spent the year importing cr+p from their bank downloads then I'm certainly not going to put error/omission/mis-post matters right in their accounting software for a few hundred quid (although I will adjust for them in my working papers).

2. It's a lot of extra work trying to get to the bottom of sales and purchase ledger discrepancies, dragging information from the client and figuring out just what they did wrongly. Thankless as well. If a client has overpaid or undercollected they need to set aside some hours to correct matters (or hire a bookkeeper) or, alternatively, write it off as their loss in their accounting records.

3. Say you were to get the client's accounting records running in tandem with your statutory accounts, why would the client then need you to produce the next accounts? Surely they'll be off to the nearest sausage factory, or pushing the DIY accounts button themselves!

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Replying to I'msorryIhaven'taclue:
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By Winnie Wiggleroom
24th Nov 2021 09:51

I'msorryIhaven'taclue wrote:

I'm grateful to everyone for your replies.

Seems we're performing to the same standard as many others are doing by checking the nominal ledger to correct misposts and then reconciling the client's TB output through our working paper summaries and control accounts.

Interesting that so many practitioners try to align their clients' accounting software to the resultant accounts. I have three issues with that:

1. That's the bookkeeper's job, so for DIY directors who've saved themselves £3k on the cost of a bookkeeper and spent the year importing cr+p from their bank downloads then I'm certainly not going to put error/omission/mis-post matters right in their accounting software for a few hundred quid (although I will adjust for them in my working papers).

2. It's a lot of extra work trying to get to the bottom of sales and purchase ledger discrepancies, dragging information from the client and figuring out just what they did wrongly. Thankless as well. If a client has overpaid or undercollected they need to set aside some hours to correct matters (or hire a bookkeeper) or, alternatively, write it off as their loss in their accounting records.

3. Say you were to get the client's accounting records running in tandem with your statutory accounts, why would the client then need you to produce the next accounts? Surely they'll be off to the nearest sausage factory, or pushing the DIY accounts button themselves!

1. In your example yes thats fair enough but generally thats not how we work, the lines are more blurred these days and we often become involved in the book-keeping, and where we have not done the book-keeping we expect it to be 95% correct and we would go into the software to correct anything at source, quicker, easier, keeps a nicer audit trail.

2. AP and AR - provided the aged reports agree with the nominal, just run an aged debtors/creditors and ask the client to investigate, always works for us

3. IMO that will very rarely happen, clients just do not have that ability or confidence, if they do good luck to them.
But one thing I would say here is that it is now more important then ever than you are talking to clients a few times a year, dipping into the software, providing suggestions, making corrections in year - the more times you do that during a year, the more they value what you do and the less likely they are to try it themselves.
If you show them that you are not just clicking a few buttons but you are providing advice (sometimes advice they didn't realise they needed) why would they do it themselves?

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Replying to Winnie Wiggleroom:
RLI
By lionofludesch
24th Nov 2021 10:05

Winnie Wiggleroom wrote:

If you show them that you are not just clicking a few buttons but you are providing advice (sometimes advice they didn't realise they needed) why would they do it themselves?

That's true. I think the future is that accountants will have more frequent contact with clients. After all, what else will you be doing in your eight "quiet" months ?

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Replying to lionofludesch:
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By adam.arca
24th Nov 2021 12:43

Things will undoubtedly have to move in that direction but there's only so much give in the equation.

There's no way that 12 months' worth of bookkeeping work can be fitted into 4 months. Equally, there's no way that 12 months' worth of accounts finalisation and advisory work is enough to fill up the remaining 8 months.

I'm guessing (hoping) that HMRC will be told one way or the other by the profession to sod off. I certainly have no intention of doing more than the absolute minimum needed for MTD to get by, preferably a bit less.

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Replying to I'msorryIhaven'taclue:
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By adam.arca
24th Nov 2021 12:52

I'msorryIhaven'taclue wrote:

1. That's the bookkeeper's job, so for DIY directors who've saved themselves £3k on the cost of a bookkeeper and spent the year importing cr+p from their bank downloads then I'm certainly not going to put error/omission/mis-post matters right in their accounting software for a few hundred quid (although I will adjust for them in my working papers).

Completely agree.

Just to add my own extra spin, in an era of fixed pricing, the fixed price generally needs to be set at the most plain vanilla level which everybody needs. If people want something extra (that would be sprinkles in this ice cream analogy), then they need to pay more.

Since most clients (or most clients at the level I operate at) see no value in bookkeeping other than meeting statutory obligations and since they see accounts as something their accountant (ie us) does for them rather than something they get involved in, that same majority of clients shouldn't be made to pay for something (posting journals to the ledger) they don't need.

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Replying to I'msorryIhaven'taclue:
paddle steamer
By DJKL
24th Nov 2021 13:31

Re companies I think one probably ought to get client's records corrected if one wants the company to conform with its legal obligations under the Companies Acts, otherwise you have the scenario (as we have seen in so many posts on here) as to where is the line between records belonging to the client and belonging to the accountant held by the accountant. If they are not corrected then obviously the records held by the accountant are the only records that come anywhere near meeting the Co Acts requirements.

Frankly if the accountant does not advise the client as to his legal responsibility re accounting records he/she does leave their firm open to future litigation, however unlikely that risk may be it is a risk.

(I can remember conversations with an older colleague in the 90s who was not convinced that say an ETB with day books posted to same even conformed with Company Law re required record keeping)

Companies Act 2006
______________________________

386Duty to keep accounting records
(1)Every company must keep adequate accounting records.
(2)Adequate accounting records means records that are sufficient—
(a)to show and explain the company's transactions,
(b)to disclose with reasonable accuracy, at any time, the financial position of the company at that time, and
(c)to enable the directors to ensure that any accounts required to be prepared comply with the requirements of this Act F1....
(3)Accounting records must, in particular, contain—
(a)entries from day to day of all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place, and
(b)a record of the assets and liabilities of the company.
(4)If the company's business involves dealing in goods, the accounting records must contain—
(a)statements of stock held by the company at the end of each financial year of the company,
(b)all statements of stocktakings from which any statement of stock as is mentioned in paragraph (a) has been or is to be prepared, and
(c)except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.

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Replying to DJKL:
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By I'msorryIhaven'taclue
24th Nov 2021 14:23

DJKL wrote:

(2)Adequate accounting records means records that are sufficient—
(b)to disclose with reasonable accuracy, at any time, the financial position of the company at that time

For "at any time" I read at any given point in time. (Not "at any time" to mean anytime soon or instantaneously).

Which I suppose extends to us (or they, the client) extracting a transactional TB (ie a record of all entries between two given dates) and adding it to the previous year's B.S. (the latter forming the opening balance columns of an ETB) to arrive at their company's "financial position".

I do hope so - although if not I remain reluctant to tinker around with clients' bookkeeping records. Different if they want to pay, but of course if that were the case they'd have hired a bookkeeper in the first place. I blame bank downloads!

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Replying to I'msorryIhaven'taclue:
paddle steamer
By DJKL
24th Nov 2021 16:06

The plus point of current banking is at least there are few if any o/s cheques and lodgements these days, bank recs are now a doddle.

Our last chequebook business will be no more by 6th December , we are moving banks as AIB seem to be giving up on UK business banking (well they asked us to leave them, maybe their letter is akin to the Fleet B ship in the HHGTG) and we have now bitten the bullet and are moving to a single online signatory position with directors/partners now having screen access for this business alongside all our other main business bank accounts to check I am not doing a runner with all their money)

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Replying to DJKL:
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By paulwakefield1
24th Nov 2021 16:20

What - No ambition? I would have thought, with a bit of planning, you could get to Sweden with the proceeds before they spot it is missing.

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Replying to paulwakefield1:
paddle steamer
By DJKL
24th Nov 2021 17:32

Have sold the house (hence the picture change)and it is a bit too cold to hide out in their forests.

I actually no longer want any more money (well not significant amounts) it just seems to bring hassles (IHT worries, will kids go loopy if you give them some, etc) so I think I will be more happy with the Swedish mindset, "Lagom är bäst "

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Replying to DJKL:
RLI
By lionofludesch
24th Nov 2021 17:48

DJKL wrote:

Have sold the house (hence the picture change)and it is a bit too cold to hide out in their forests.

You've bought a West Coast Puffer instead ?

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Glenn Martin
By Glenn Martin
24th Nov 2021 16:29

We do all the work in the clients bookkeeping, so that the Xero/QBO etc matches the accounts filed. We use tools like Xavier etc to spot duplicate transactions or miss postings etc.

We are 95% xero practice and will be moving to Xero WP and Xero tax once we are happy they will work for us.

I think now its important to correct bookkeeping and stop recurring errors instead of just adjusting everything at Balance sheet date like you used to do with Sage.

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