Share this content
19

Why don't we charge for bank confirmation letters?

bank confirmation letter

Didn't find your answer?

There has been a steady increase in the number of letters that we are being asked to sign for clients and now with COVID we are being asked to give more assertions some of which are impossible to give. Why as a profession do we not charge for these letters, we are taking the risk but receive no reward unless your usual fee. This is just another example of accountant giving their services away for free! Tak your typical mortgage application - the solicitor, broker, estate agent, QS and everyone else in the chain gets paid, except for the accountant. The entire transaction is dependent on the assertions we give in the accounts and letter for the bank but we are the only one who doesn't charge the client a fee? Makes no sense. 

Replies (19)

Please login or register to join the discussion.

avatar
By GW
05th May 2020 13:09

The ICAEW guidance recomends, among other things, covering the reply with disclaimers and not charging to avoid setting up a contract you can be sued under.

So its a case of no fee and very little risk.

Thanks (0)
Replying to GW:
My photo
By Matrix
05th May 2020 13:17

So if you don’t charge a fee then you can’t be sued? Is there any precedence on this?

Thanks (0)
Replying to GW:
My photo
By Matrix
05th May 2020 13:18

I don’t charge a fee but I have never known this background. Thanks

Thanks (0)
Replying to Matrix:
avatar
By GW
05th May 2020 13:30

You can't sue under contract law if there is no contract. Provided giving references isn't covered by engagement letter, disclaimer says reply given without any obligation and no consideration has changed hands, so how would you show a contract exists?

Thanks (0)
Replying to GW:
avatar
By Tickers
05th May 2020 13:36

But if you give an assertion that is incorrect, are you not taking a risk regardless of contract law e.g. professional negligence, breach of duty, and breach of fiduciary duty, breach of trust?

Thanks (0)
Replying to Tickers:
avatar
By GW
05th May 2020 14:03

Yes, that is why you only report facts - the client's tax return included the following............... rather than saying the client's income was..........

Thanks (0)
Replying to GW:
Hallerud at Easter
By DJKL
05th May 2020 13:52

Remember A Web covers the whole UK, under Scottish Law contracts up here do not always need consideration, you can have a unilateral gratuitous promise.(though proving one may be tricky- writ or oath)

https://en.wikipedia.org/wiki/Unilateral_gratuitous_obligations

Whilst as a Scottish CA trainee I needed to have passed (narrowly at Aberdeen Uni in my case) a year long business law course examined under Scots Law I still needed to be mindful about the significant differences with English Law ( I had Keenan & Smith Mercantile Law for that purpose-I think I still own it) whereas down south, I suspect,you never studied any Scots Law.

Thanks (0)
Replying to DJKL:
avatar
By GW
05th May 2020 14:14

While it is not non existant, my knowledge of Scots law is extremely limited - I did refer to the ICAEW guidance and I wouldn't expect that to take into account Scots law and I wouldn't wish to cause offence to those north of the border.

Thanks (0)
Replying to DJKL:
Red Leader
By Red Leader
05th May 2020 14:30

I did once deal with a Scottish Cash Book, but I don't suppose that counts. And before the others make the obvious humorous comments, it really is a thing as I'm sure DJKL knows. Petty Cash and Bank in one beautiful package.

Thanks (0)
Replying to Red Leader:
A Putey FACA
By Arthur Putey
05th May 2020 14:36

Was it Dr Finlay's Cash Book?

Thanks (1)
Replying to Red Leader:
avatar
By mumpin
05th May 2020 15:00

I think it was known as a Scotch Cash Book. If the compiler didnt know what they were doing it could be a nightmare.

Thanks (0)
Replying to mumpin:
Red Leader
By Red Leader
05th May 2020 15:23

mumpin wrote:

I think it was known as a Scotch Cash Book. If the compiler didnt know what they were doing it could be a nightmare.

Oh no, you have opened the fetid haggis that is Scotch / Scots / Scottish ... aaargh!
Thanks (0)
Replying to Red Leader:
Hallerud at Easter
By DJKL
05th May 2020 15:38

Scotch as to cast doubt on a statement, quaff or a programme including Rikki Fulton

Thanks (0)
Replying to Red Leader:
Hallerud at Easter
By DJKL
05th May 2020 15:35

They are not things of beauty but of my nightmares. I came across one in circa 1985/86 during my training, whilst if correctly compiled maybe they are useable the one I was presented with was a total shambles and despite one of the more mature qualified members of staff, Mr Ross, a man of boundless patience, trying to explain how it ought to operate, I think it was past resurrection and I was past teaching.

Thanks (0)
Replying to GW:
Red Leader
By Red Leader
05th May 2020 14:31

GW wrote:

The ICAEW guidance recomends, among other things, covering the reply with disclaimers and not charging to avoid setting up a contract you can be sued under.

So its a case of no fee and very little risk.

Yes, that is my understanding as well which is why there is never a line on my invoices for such work.
Thanks (0)
boxfile
By spilly
05th May 2020 13:28

We charge a flat rate fee for every letter that is an extra to normal services.
After all, the banks charge a fee, my doctor charges one, as does a solicitor etc, etc.
Clients don’t seem to mind as we are upfront with the charges beforehand. We do pop in a disclaimer clause in these letters & requests though.

Thanks (1)
avatar
By Sheepy306
06th May 2020 13:06

The difference with all those professionals you list is that you are the only one with an ongoing relationship with the client that gets a recurring fee, the others are one-off transactions.
Whether you charge or not depends partly on how happy your general level of fees are, the relationship with that client, and the amount of time it will take to do the task.

Thanks (0)
Replying to Sheepy306:
avatar
By Tickers
07th May 2020 01:02

Ah the old recurring fee excuse. The reason why accountants have been providing free services for years.
Quote an annual accounts fee and throw in everything else afterwards.

Thanks (1)
avatar
By TheChief
12th May 2020 10:39

We add this to any bank/loan letter:
The information enclosed has been provided by and at the request of our client from their accounting records and information and explanations given to us
Whilst we have no reason to believe that our client would enter into a commitment such as that proposed which our client did not expect to be able to fulfil, we can make no assessment of our client's continuing income or future outgoings.

Whilst the information provided above is believed to be true, it is provide on the understanding that it is the sole responsibility of the mortgage lender to satisfy themselves of the clients’ ability to enter into and ability to repay any mortgage, rent or loan. Neither (Name of practice) nor any member of its staff will be responsible for any financial loss or damage or consequential financial loss or damage resulting from any party placing reliance on the information supplied and any use you wish to make of the information is, therefore, entirely at your own risk

Thanks (0)
Share this content

Related posts