sorry for the delay in replying but I've been off being a busy little bee today.
unless you see the receipt or invoice then the transaction never happened.
Thats the way that HMRC will see matters so thats the way that we have to be as well.
HTH
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi John, Shaun. He's possibly thinking he can keep your fees down by cross-adding and analysing everything but I'd go with your common sense. I'd rather have the certainty of seeing the bank statements, invoices, cash book or preferably all three.
If you've agreed that you're preparing returns/accounts from his bookkeeping alone then you've absolved yourself from much responsibility but "paid out and received" is a cash basis the client may not know whether or not that is sufficient.
I have a few clients that refuse to let me have receipts, as they are scared they will go missing in the post. (I have to conceed recorded delivery does not reliable!) I can normally get the bank statements, but not always - so I make a point of getting them to sign a declaration (or at very least confirm by e-mnail) that I am doing their accounts from the spreadsheets they have provided and that they confirm that they have the receipts and records which they have not provided. Additionally if the HMRC ask to see sight of the receipts and records which the client has not provided they will supply them to HMRC as requested.
I have recently been passed details of an "aspect check" of a 2010 return, which I am surprised it has taken HMRC so long! They have only asked to see the breakdown of the expenses for a particular expense. Fortuntely for the client (a musician) they were for payments made to other self-employed musicians and all were paid by BACS. The client may be expected to provide names & addresses of the people he paid, but I don't expect HMRC to ask for receipts. The last time I has something simular (about 6 years ago, as I have a lot of clients who are musicians), the client was not asked to produce a single receipt - I gave breakdowns and the HMRC asked for details of the musicians who were paid. Something I have always insisted - if they must pay each other, they must do it by bank payment so there is a record of where the money goes and how much it is.
I have a few clients that refuse to let me have receipts, as they are scared they will go missing in the post.
As this is the first month it may well be that he isn't aware he needs to provide them, although I did say in the initial meeting I would call and collect receipts every month. However all I got was these spreadsheets by email.
Before I ask for them I wanted to be sure of where I stood if he didn't want to provide them, and the advice to get him to sign a declaration is an excellent one, thanks Tim for that advice.
When I worked in accounts prep for a firm we would often just get Sage back-ups and maybe bank statements, it was then up to us to check the account postings/balances for reasonablness - some we checked a bit more carefully. Then if we had any queries we asked for receipts. You're getting a spreadsheet instead of Sage.
My client's accountant has just asked for the info to prepare my client's accounts - all he has asked for are spreadsheets, bank statements and payroll summaries.
I think the point about the disclaimer is very valid, I'm sure our engagement letters said something along the lines of "we are preparing the accounts for the year ended such and such based on the books and records provided by you". Unless of course we also did the book-keeping, but then we had the information anyway.
This may not be of any help, but I am always asking for and getting help on this forum, so thought I'd jot down my experiences, a bit of payback.
Just thinking a little more about this. A cash basis may not be sufficient depending on the type of business, but if he insists on providing you only with bookkeeping and not prime documents, then you should write a standard letter each year asking for closing balances: debtors, creditors, cash balance, stock, bad debts. You may add Work In Progress, loan agreements, assets bought and sold, and anything else you think appropriate.
Just thinking a little more about this. A cash basis may not be sufficient depending on the type of business, but if he insists on providing you only with bookkeeping and not prime documents, then you should write a standard letter each year asking for closing balances: debtors, creditors, cash balance, stock, bad debts. You may add Work In Progress, loan agreements, assets bought and sold, and anything else you think appropriate.
best regards,
Tim
Thanks Tim, problem sorted. I asked for the receipts and got them, which makes me a lot happier. Thanks too, Maria
