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I've spent most of this week upset...

28th Mar 2020
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I've not posted a blog for ages (over a year it would appear). Invariably I find myself just replying to whatever Any Answers comment is being made when really the thought could be expanded in a blog. 

That was fine but then I read Lesley Barnes' Any Answers comment https://www.accountingweb.co.uk/any-answers/are-you-suffering-from-coron...

..and although I did make a comment I feel that there is much more that I needs to be said  that hopefully will resonate with many of you - hence this blog ...so bear with me.

Like Lesley I'm exhausted and also like Lesley have done no chargeable time this week. These last weeks at the end of March are always a bit quiet before the Subcontractors get going after 6 April. This year they have already been in contact.. 'can I send my stuff to you as in next week.. I need the refund.'

Emotionally exhausted from taking calls from clients who don’t know how they are going to last the week let alone the weeks that the government says they will have to wait. Exhausted from taking calls as in 'how much am I going to get' - can you work it out for me? I've heard that it will be £2k a month!' when they will probably fall under the large number of those who won't get a thing.

Exhausted from holding back the tears when speaking to those clients who you can see will not make it to that glorious day when they might get some financial help as per the Chancellors enthusiastic announcements. 

A bespoke kitchen fitter client was the first to call. 'I've three weeks... thats it'. Every one of his bookings had cancelled. He is a quite, reserved person whose business is steady such that he has work booked up weeks in advance. He has people who work for him and a showroom with an ongoing tenancy. The landlord wont let him defer payment of rent as he also relies on the income.

I tried to give him hope - told him he had to fight ... fight for his business that he had spent decades in building. On the phone we made a list of where to get information (FSB, council, his landlord, govt websites, insurance, credit cards, mortgage lender etc). He was on the verge of crying when he hung up - I cried for him in his stead.

Clients are already falling away. Some can see they are not going to make it through the next few weeks. Some have sat down and made a decision - they will close down now; go now before they are pushed into it. Many have nothing or very little in savings as their business was their future, their pension, their savings. Good, hardworking people not being helped. Yes.. they could possibly get a loan but the banks aren’t giving their money away you still have to go through the application process as if for a usual bank loan and you might not pass. 

You see people online who are obviously employed enjoying the extra weeks as if they are on holiday. We've all seen the post of the police telling people having a picnic in the park that they should be at home. They are the lucky ones and I read that those same lucky ones will be able to carry forward their holiday entitlement to next year as well as having their next years' entitlement. That will put a further strain on all businesses next year.

Information from the government is sketchy at best - raising peoples hopes and then still no clarity when the detail (such as it is) is published. Boris says that all workers will be helped through this crisis. 'We are in it together'. No we are not. I'm going to lose clients I have known for years. Been with them from their beginning, through incorporation, expansion, taking on staff, me doing their payroll and VAT and now.. nothing. Actually it might be worse than 'nothing' they may leave debts which, as a director, they could be liable.

Some clients will be able to carry on and wont see too much fallout but for the majority of SME businesses help, if available, will come too late and the impact will last for years. Where will they go? The employed ones think they have it great at the moment but many of their firms wont be able to take the strain either.

Obviously we too will be affected when a client goes. Lesley says' What can you say other than go through the options available to them or not as the case might be'.

The answer, Lesley, is there is not much you can say. You've just got to stay strong for them, help them close their business with the least difficulty as possible if that is to be and don’t charge them.

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Replies (32)

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Out of my mind
By runningmate
28th Mar 2020 18:13

I think we should be advising our clients to plan for increased annual inflation soon. I would suggest that inflation rates in excess of 20% pa are likely.
RM

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Replying to runningmate:
By Duggimon
31st Mar 2020 09:56

"Likely?"

Care to back that up? Please go ahead, preferably with something other than wild guessing.

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Replying to Duggimon:
Out of my mind
By runningmate
31st Mar 2020 10:54

Similar levels of inflation were experienced in 1940 when there was a sudden increase in government expenditure and borrowing.

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Replying to runningmate:
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By johnjenkins
31st Mar 2020 11:22

Does it really matter? The measures, that the taxpayer will inevitably pay for, are there to, firstly save lives and secondly to help towards massive collapse of business, not forgetting our divorce from the EU. My view is that once all this crap is out of the way, say this time next year, confidence will soar and investment will come rolling in. I think a lot of people forget. It's not just us that have a problem, it's the whole world, so things just become relative.

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Replying to runningmate:
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By johnjenkins
31st Mar 2020 11:24

Does it really matter? The measures, that the taxpayer will inevitably pay for, are there to, firstly save lives and secondly to help towards massive collapse of business, not forgetting our divorce from the EU. My view is that once all this crap is out of the way, say this time next year, confidence will soar and investment will come rolling in. I think a lot of people forget. It's not just us that have a problem, it's the whole world, so things just become relative.

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By CMPACDGDB
03rd Apr 2020 14:08

Confidence will soar?? A near bankrupt country that has cut ties with its largest market??? The decision to leave the EU was only for 3 good reasons: 1) Stupidity, 2) Ignorance, & 3) Both combined. Add to this the coronavirus hit and it makes 20 years of economic misery so likely that the word "certain" seem inevitable. Not sure what mind-bender you're taking but lots of use would like to try it too please.

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Replying to CMPACDGDB:
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By johnjenkins
03rd Apr 2020 15:16

It's called tea, coffee, wine and beer with a bit of common sense mixed in.
What you are forgetting is the whole world is in this predicament not just us. Did the EU step up to the mark. No, they do what they do best take yer money and do nothing. At least this crisis has cured the migration problem (so the EU won't have to do nothing for a bit longer). I wouldn't be surprised if the world says "Do you know what, let's cancel all national debt and start afresh. Once we come out of this I'm hoping the WHO do something constructive world wide, cos that's what they stand for. The only country that could suffer economically will be China. Yes of course we are going to take a hit but as Mr Hancock says, "money is no object".

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Replying to johnjenkins:
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By CMPACDGDB
03rd Apr 2020 14:08

Confidence will soar?? A near bankrupt country that has cut ties with its largest market??? The decision to leave the EU was only for 3 good reasons: 1) Stupidity, 2) Ignorance, & 3) Both combined. Add to this the coronavirus hit and it makes 20 years of economic misery so likely that the word "certain" seem inevitable. Not sure what mind-bender you're taking but lots of use would like to try it too please.

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Replying to runningmate:
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By sammerchant
31st Mar 2020 17:41

But then, every country was not in the same boat. I see China competing furiously by cut-throat pricing just to save its industries. Others, Bangladesh, India etc will follow suit. America will reap the most advantage.

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Replying to runningmate:
By Duggimon
01st Apr 2020 08:18

I see. I knew it would be wild guessing.

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bike
By FirstTab
28th Mar 2020 18:23

Don't you think you crossing the line between being their accountant and their counsellor/social worker?

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Replying to FirstTab:
Oaklea
By Chris.Mann
28th Mar 2020 21:31

When you really care about somebody/something, it’s a very easy line to cross. And, you often cross the line, without thinking.

These are (very) unchartered waters. We will all be “tested” and, those that pass those tests, will come out stronger.

If we ignore our fellow woman, or man, in these circumstances, what does that really say about us?

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By lesley.barnes
29th Mar 2020 10:51

Thanks Jennifer for your perspective. I'm very lucky I can afford not to charge clients in the current climate and survive personally and as a business. My husband and I have very little outgoings especially now as we are only going out once a week for the big shop. I'm sure other accountants will struggle to make ends meet and I feel for them as well. They are stuck between do they shut their doors and tap into any government payments they can get or continue doing the best they can for their clients and receive potentially nothing. In my case even the normal compliance work, payroll, meeting deadlines etc payments will be deferred for clients until they can afford to pay, if they can't and shut up shop then as you say its something we will need to guide them through. Its truly heartbreaking all round.

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blue sheep
By NH
31st Mar 2020 09:38

I feel much the same way, most of my clients have been with me for over 20 years through thick and thin.

However difficult it is however we have to stay objective and professional and provide clarity.

Not sure what kind of client base FirstTab has, but for us and I would have thought most other small practices our work has never been just about crunching the numbers - we have been the steady rock in all their life changing moments good and bad and I for one intend to stay that way for as long as I possibly can.

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Replying to NH:
bike
By FirstTab
31st Mar 2020 09:45

I see it as a business and NOT a counselling service. How would it help a client by just listening? They can talk to their family/partners. I point out what support is available. Thankfully, we are not all the same.

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Replying to FirstTab:
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By meadowsaw227
31st Mar 2020 12:05

Luckily we are all not the same, perhaps that is why some accountants have such a bad press ! .

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By johnjenkins
31st Mar 2020 10:30

Children's hospice over the country have lost a lot of income from at least one of my client's activities. No doubt there are many more. When the Government first said they were putting £330b aside, my initial response was the cost would be 5 times as much. I don't think I'm going to be far out because you have to look at all aspects of life, not just the business side of things.
Jennifer, if it helps, I always use the safety measure on airplanes as an example. Put the oxygen mask on yourself before you help other people (including your children). No emotion , simple practicality.
Of course, in any crisis, there will be a thinning out of business and loved ones. Get a grip, Jennifer, your clients will rely on you to be strong and offer constructive help. If nothing can be done then you tell them and offer options on how to move forward. That is what being an Accountant is all about.
Admittedly the Government haven't really published the "nitty gritty" yet but I'm sure that we can work out what they are likely to be.
I'm sorry if I come across hard nosed but my feelings are with those on the front line doing an almost impossible job.

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Replying to johnjenkins:
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By meadowsaw227
31st Mar 2020 12:06

Thus speaks am accountant, perhaps some of us are human as well ! .

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Replying to meadowsaw227:
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By johnjenkins
01st Apr 2020 09:57

Hence my last paragraph.

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By johnjenkins
31st Mar 2020 10:31

Children's hospice over the country have lost a lot of income from at least one of my client's activities. No doubt there are many more. When the Government first said they were putting £330b aside, my initial response was the cost would be 5 times as much. I don't think I'm going to be far out because you have to look at all aspects of life, not just the business side of things.
Jennifer, if it helps, I always use the safety measure on airplanes as an example. Put the oxygen mask on yourself before you help other people (including your children). No emotion , simple practicality.
Of course, in any crisis, there will be a thinning out of business and loved ones. Get a grip, Jennifer, your clients will rely on you to be strong and offer constructive help. If nothing can be done then you tell them and offer options on how to move forward. That is what being an Accountant is all about.
Admittedly the Government haven't really published the "nitty gritty" yet but I'm sure that we can work out what they are likely to be.
I'm sorry if I come across hard nosed but my feelings are with those on the front line doing an almost impossible job.

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By raybackler
31st Mar 2020 10:36

I am sure like all practices you have a mix of clients in terms of their financial strength.

There are those that are prudently managed and have the resources to survive for at least three months without any government intervention. There are those that have always been tight for cash and who have now seen their turnover fall off a cliff. Others work from home or have started to work from home and can continue, so are not unduly affected at the moment (maybe until their clients pull the plug on their work). Some clients have never managed their finances well, whatever advice is being given and they may not survive.

One thing all of these client groups have in common, is that despite all of the announcements, none of them have yet received a penny of the promised grants. No £10K grants for small business rates, or £25K hospitality etc grants yet. No 80% furlough money and no self employed support. As for director/shareholders who survive on low salary and dividends, well they are on their own.

We have given cancelled fees for three months to those most in dire need, but that won't help them survive. We have also provided free time to advise clients and to disseminate the government announcements. I'm not sure what else we can do in these harrowing times?

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By indomitable
31st Mar 2020 12:09

Absolutely agree with 'firtstab' I see running my practice as a business, offering the best service and advice that I can. I do not see myself as a counsellor.

Provide as much practical advice as you can, but that is where your responsibility as a practice stops. the rest is personal.

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By KH
31st Mar 2020 15:11

I am seriously worried about the effects of the "cure" being peddled by our governments ... to me it seems like the cure is going to be worse than the disease.
Either we are not being told a helluva lot about this virus, or else the governments world-wide are being held to ransom by the media ... just think, the economic impact of the government's measures are going to put the whole country into the type of recession we've never seen before, with millions of the poorest in society going under, whereas if the disease were allowed to take its course, it would merely kill off those who are already very old and suffering serious health problems ... since England alone loses over 150k people a year under the age of 75 from heart disease et al, then these are the ones you'd expect to lose to this new virus ... whereas the current set of measures will adversely affect millions of younger healthy people for many years to come, all for the sake of saving say 20k very old and very sick people ... something weird is going on..... …………. and yes, I am old enough to be part of that “very old” group………………. (so I’m not an all-out nutter who wants to kill off the oldies!).

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Oaklea
By Chris.Mann
31st Mar 2020 15:52

Whilst I take on board the differing and diverse opinion provided by members of the forum, we are; all human and have differing personalities. That's what makes the World what it is. Special.

Not too long ago, the UK had started to take seriously and recognise, that a good proportion of the population suffered with psychological issues, which needed to be dealt with, in a variety of ways. Regretfully, from what I can see, that emphasis has (seemingly) been overlooked, leaving those who encounter such situations, to either; try and help (often a willing ear and a gentle chat are sufficient), or just walk on the other side of the road.

I try and be all things to all people. Provide client's with the very best of support and, if on occassions, they need other support, I will always go the extra mile.

Please don't criticise those who have a different opinion to yourself. Who has a degree in life?

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Replying to Chris.Mann:
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By johnjenkins
01st Apr 2020 10:11

I understand where you're coming from but I feel we have had a nanny state looking after us for far too long. Having said that Governments have had to deal with a number of issues which have changed the way we have to think. Terrorists, drugs abound (including our young children being used), wars, which we can neither afford or want (but probably essential) etc. etc. Now this. The last 3 years have been a nightmare owing to the indecision of Parliament regarding the EU. So once the virus is well and truly out of the way it seems to me that we need a new way of thinking on how to deal with our changing lifestyle. We know what can be achieved in a crisis. So why do we need a crisis to achieve what can be achieved? We can send people to the moon, now mars, but we haven't got enough ventilators to save lives!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Rant over

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Replying to johnjenkins:
Oaklea
By Chris.Mann
01st Apr 2020 15:52

Can't find any flaw in your commentary, at all John.

At the present time, my daughter, who is around 3 months pregnant, is training non ITC (intensive care) qualified nurses, how to treat patients, who may be ventilated and suffering with Covid-19. She trains up to twelve nurses, each day and, her unit is alongside the existing critical care unit, of her hospital. She has no personal protection equipment and her; partner, mother and father, are beside themselves, with concern.
We'll all have anecdotes and stories to tell. The upshot is, there are so many dedicated and heroic examples of our front line, going the extra mile but successive administrations fail to provide the back-up, these people should reasonably expect and deserve. Let's hope we learn some serious lessons from this carnage. Personally, I see no evidence that my hope will come to fruition.

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Replying to Chris.Mann:
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By johnjenkins
01st Apr 2020 16:15

What really amazes me is that the Government are taking medical advice NOW, when it's probably too late to save many, yet these medical advisers have been giving this sort of advice for years which has fallen on deaf ears. Our health and welfare must be the first priority of this new Government. I really do hope they heed the message.

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Jennifer Adams
By Jennifer Adams
02nd Apr 2020 13:05

Thank you everyone for your comments.
I would make just one final observation.
Look on any accountants website and they all say the same thing 'Come to us/ we're wonderful/ we go the extra mile/ we become part of your team - not just seeing you once a year/ we give a personal service.'(note the word 'personal')
If you read the blog carefully you will see that I did give practical advice.
I would just say that my firm has been in business for over 45 years. I have been the main partner for 15 years. Some of my clients have been clients for over 30 years.
I've been with them through divorces, getting their mortgages, cessation of businesses, family deaths - been to the funerals of spouses,and invariably they have paid me on time. I've been with them at the start of their businesses, through the times when they have grown, taken on new staff - so the least I can do is listen.
It only takes a few minutes.

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Replying to Jennifer Adams:
blue sheep
By NH
02nd Apr 2020 13:30

well said

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Replying to Jennifer Adams:
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By PERMON
02nd Apr 2020 14:00

Agree 100%

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By mfbrown185
03rd Apr 2020 10:06

Thanks all - I agree with Jennifer with the need to listen and advise, whether that's limited to accounts and financial issues or more practical issues, clients need someone to discuss their concerns with. Whichever way you cut it, small business is suffering.
I emailed my MP about the lack of support for predominantly dividend paying business's (probably a waste of time) to date no reply (he usually humours me and replies at least - but I do hear that he is self isolating hoho).
We have (I believe) done as much as we can do: distributed information (from good sources) quickly, fielded the inevitable queries (at one point 152 emails over a 3 day period, plus almost continual calls) and put practical plans in place with our larger clients. Our smaller clients we are still working through.
Unfortunately as previously stated some business's are destined to fail, they have little or no reserves, withdraw every penny that they can, and the owner has little personal resource to prop them up.
We have offered a payment holiday, our larger clients are continuing to pay us, our smaller more vulnerable clients will take the holiday.
Overall I just wished there were more answers than questions but that is not the case. Martin Lewis telling people that they can take additional work while furloughed hasn't helped. I haven't seen any statement that leads me to believe that this is the case, anyone else?

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Replying to mfbrown185:
By TMK Accounts
03rd Apr 2020 13:54

My current understanding at the moment (!) is that as long as they don't do any work for the employer that has furloughed them, they can have another job with a different employer. What isn't clear is if new tax codes will be issued for 20/21 that will include those new circumstances.

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