Through word of mouth Ive been asked to do the bookkeeping, accounts and SA Tax Return as well as PAYE & payroll for a sole trader business that started trading last august.
Doesnt daunt me at all (normally a walk in the park) until I discovered again through word of mouth that:
1) they havent been paying their PAYE (because they didnt know how to) so theyve missed all their deadlines p14 etc
2) they havent been keeping all of their receipts
3) they have been banking - keep money in petty cash box
4) their records for sales is written in the diary and no they dont give receipts
Ive been advised by a long standing client to run a mile or get a lawyer involved (LS Client doesnt know them btw)
Personally this type of work doesnt bother me having worked for a CA for several years, but legally should I chase them along to a Chartered Accountants??
The first thing I would do is ask the client if they're willing to change!. I'd talk them through what they should be doing and why.
If you feel they've genuinely just got themselves in a "muddle" and want to "staighten out" then personally I wouldn't automatically turn them away. But if I got the impression they weren't taking keeping proper financial records seriously or even worse it was deliberate... I'd think long and hard.
It's possible they've been naive.
Personally I wouldn't automatically worry about writing sales in a diary. I have a couple of market traders as clients and this is how they do it - with HMRC's approval. Incidentally they also write down when it rains to help explain a drop in turnover. But it depends on the business, I cant see it being acceptable for a shop.
Hth Tony.
-- Edited by ADAS on Friday 6th of August 2010 10:36:50 PM
-- Edited by ADAS on Friday 6th of August 2010 10:38:20 PM
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Just noticed I said they had been banking - oops no they haven't
I do believe they are genuine - the usual - great at what they do (dog grooming)but not business figure minded
I know the mother very well through community groups and she admits that she and her family have always had good business ideas but no accounting know how (she keeps roping me in to do treasurer stuff for all sorts of groups!)
I'll set up a meet for next week with them and get her on the right track - work cut out for me methinks but satisfying once they are sorted
-- Edited by dizzy lizzy on Tuesday 10th of August 2010 04:01:38 PM
A Terms of Engagement drafted for the meeting will allow you to set boundaries, if you decide to take them on as a client. This will also protect you from their past mistakes and non-disclosure.
From my personal experience, if they start lecturing you about accounting and you know their accounts need work- RUNNNNNNN (unless you need the cash and can cope with headaches, then weigh up the pros and cons in your mind)
Also an idea to find out background of their history with accountants and bookkeepers.
