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How strict should you be with clients?

5th Jan 2015
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One newly qualified accountant posted on Any Answers about how fastidious practitioners should be with their clients concerning errors and misstatements in their records.

StreamsofWhiskey said issues he has encountered are errors arising to poor record keeping, clients having no receipts for large amounts of money and claiming something is a business expense when he knows it's not allowable.  

He also asked whether "allowing such expenses is just a pragmatic part of running a successful accountancy firm"

"No firm would be able to compete commercially if they were to insist that all rules were stuck to as they would not be able to keep a sufficient number of clients?"

AccountingWEB members shared the approach they take to clients in such instances.

Occasional errors

Some accountants said that the occasional error was okay, but when it's obvious to you, the error should be examined and corrected before being submitted. 

And as David Winch points out, there are many clients who are convinced they are correct, for example, insisting something is classed as a business expense. Therefore on't be too hasty to make a Money Laundering report. 

Be strict

There are those, on the other hand like Flash Gordon, who said they are very strict with clients.

Chastising clients for trying to slip business expenses through when they are not, means that they learn fast and don't do so again. And if you educate them in the first place then they are less likely to do so.

"If I'm sure I'm right, I'll omit them and tell the client what I've done. Decent clients take advice, dodgy ones aren't welcome," they said. 

Educating clients

This is in your best interests, Frankfx argues, as despite clients disagreeing with apparent unfairness, your training and expertise means you know best.

Educate them from the outset and don't go down the slippery slope of letting your standards slide.

Mrme89 agreed. Flouting the rules and laws to make your firm appealing for those who will try to get away with things, is not a good idea. If clients don't want to stick to the rules even after you've educated them, you need to question whether you really want to work for them.

List mistakes

Shirley M's practice questions everything that may be for private use and also checks the VAT. They then list mistakes, tell them how to adjust the next VAT return and check it's been done next time around.

In addition, Moonbeam said that when taking work on from previous accountants, they notice things they would object to. If there is something, be clear with the client and point it out to them.

They also get every client to sign a letter saying they have told Moonbeam all they need to know. 

"Not everyone is as pedantic, but if you get HMRC asking tough questions, it will put the spotlight on your practice in a way you’ll regret." 

Move to a more ethical firm

If your firm or partners are letting standards slip and letting things go in a way you're not comfortable with, consider leaving.

StreamsofWhiskey said they were happy that there were accountants out there who stick to the rules, but that they know there are some out there who hadn't responded to the post likely to bend the rules.

They added that they'd like to move to a larger firm which maintains a higher ethical standard. But members replied that just because a firm is large, doesn't always mean it's ethical.

According to I C Day, as accountants gain experience, they learn that there are a lot of grey areas with no "hard and fast rules".

"Don't even expect all tax officers to have the same opinions, they don’t. You need a pragmatic approach and assess each case on its own merits." 

Don't let clients exploit you

Adam.arca said that his firm mentions in its certificate that accounts were prepared from records provided. Therefore there is a pull for not wanting clients to think even more than currently that their job is to check everything.

Don't go seeking out errors, is therefore his approach. But if something pops out don't ignore it. 

What's your approach to client errors? Do you let some slide, or go through accounts with a fine tooth comb to make a note of every little scruple?


Replies (6)

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Accountants Northampton
By Shamrock
06th Jan 2015 09:11

We're Tax Advisors not Tax Police
In the end of the day responsibility for the accounts as far as HMRC is concerned lies with the client. If we disagree then we should put it in writing to the client to cover our backs and explain the risks to them.

But I've come across business owners who say my accountant wont let me claim this that or the other, most of the time their accountant is wrong and they are losing out on money. My point is let the client take the risks they are comfortable taking.

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By ShirleyM
06th Jan 2015 09:49

I agree, up to a point

However, would you prepared to defend those claims to HMRC, or would you just throw in the towel?

If you can't support your client 100% then best not to get in that situation in the first place.

Thanks (1)
06th Jan 2015 13:07

'Flaunting the rules'

No, it's FLOUTING the rules, Mrme89.

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By coolmanwithbeard
06th Jan 2015 15:21

It's my reputation at the end of the day

I don't know what it counts for now but in the old days of a local tax district with local inspectors then I knew that my more fastidious approach stood all my clients in good stead with HMRC following investigations. I was able to argue a corner I had decided on and not shuffle and look at the floor as Id rather hoped I'd just get away with it!!

As a practice that tried to get it right I am happy that we got less enquiries than other careless or even dodgy practices. Ok so I don't have numbers to back that up but I didn't feel like we got many and certainly there appeared to be a point to the ones we got not just casual fishing.

Where something big did come to light (20+ years undeclared letting was one) we were able to advise the client and negotiate as good as outcome as we could as the client was willing at that point to then play ball. Another one((again letting income - but that included an invented new boiler complete with invented plumbers invoice) we sacked the client as we wouldn't put it through and he was insistent.


There will be errors and missing bits and bobs from time to time and that is when we must be pragmatic. So I'm not going to refuse a client a £250 spend at Halfords in the company card if there's no receipt and he normally takes the company car there for repairs but I am going to query 2 covers when he's away overnight on a business trip and I once refused to even put a strip club through as entertainment the client was suitably embarrassed lol



Thanks (1)
By Jim100
06th Jan 2015 20:15

learning the hard way

Its not possible to check every transaction but obviously you can concentrate on the risk areas and spend time on those areas.  Unless you do the book-keeping you are dependent on the client booking everything correct but what I have found most have a casual approach hence the errors and I do correct or clear up where I can and the amounts are material but not possible to do everything.  I seem to pick up clients that are either behind with the book-keeping then with deadlines approaching they just quickly manage to do the book-keeping over six weeks and then there are so many errors.  

From 2015 I have changed my approach for new clients and be in control.  I perhaps have been little pressurised to meet their deadlines in the past and been naive.  I have taken on clients which I needed being still relatively new to practice but have been totally disorganised hence causing me problems

However, now its going to be my way or the highway.  I have changed the engagement letter so clients know what is expected.  I will try to educate them more from the outset and be even more involved in their business. Try to anticipate potential problems, be wiser if this client is going to be lax with record keeping which mean more risk of errors.  Scrutinise the accounts and take more time over them.

I noticed sole practitioners seems to be more meticulous than larger practices who seem just to be filing service and do not really spend any time looking at the accounts and picking up errors.  I recently picked up a client from a smallish practice and they just filed the accounts without asking any questions to the client.  I normally have at least 10 questions.



Thanks (1)
By johnjenkins
11th Jan 2015 08:49

Knowing your

client is the key. When HMRC do a investigation (full blown) they will want to know how much they spend on toothpaste.

So if you know your client and their expenditure you should know if the accounts are reasonable. If they don't look right you go hunting. If it's as you think it should be then it  is not worth spending time on looking for a packet of crisps claimed as travel.

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