Probably having a member of their family doing the bookkeeping and not keeping all receipts and entering every single thing that doesn't justify with the business and then end up making a complete trash of it...
The best one is when they have done the books themselves and they think they have done a good job of it and then they wonder why their accountant charge them so much at the end of the year to complete their year end stuff. They think the accountant should be cheap as they say they have done alot of the work themselves!!!
I met someone the other day whos a new starter and I asked who does her bookkeeping and she said she did it herself, well after about 5 mins it was clear that all she did was collect her receipts and put them in an envelope and then inv the customers! There were no spreadsheets totalling anything up! She is employed as well at the mo so I gave her my card and recommended an accountant for her. She assume that what she was doing was enough, I did explain that her accountancy bill would be high if its not done correctly!
Couldn't agree more Amanda, one of the most regular quotes we get from new clients is "our books are in good shape, not much work for you to do". The gap between the perception and the reality can be enormous!
Well i am an Auto-Electrician and anytime a customer has a fault and they're explaining it to me they always add "It's probably just a fuse or a loose wire" Apparently i spend my day changing fuses. So i think these customer skills are transferable lol. I know, slightly off topic but i mean to say i understand what you are talking about.
Thank you to all the members who have contributed to my question. Nevertheless, this can be an ongoing question providing many different answers from the magnitude of professional bookkeepers in this world. Please feel free for other members contribute to this topic.
Neil thats a big career change, Auto Electrician to Bookkeeper?
What prompted you to change?
@ David - Clients mistakes - when they think they have given you all the paper work only to find out there is loads missing! One client dumped a carrier bag on my doorstep with all sorts in it, including full cheq book, etc, I was out for a few hours so don't know how long it was there for, anyway a few days later he phoned me up asking if his flight tickets were in there as he was going on holiday the following day and couldn't find them!!! I went and had a look and sure enough there they were! I used to get his Vets bills in there too, and no he wasn't a security guard!
I come from a family owned business, my dad being proprieter, we had a fully kitted workshop with 13 staff and 2 delivery drivers for over 10 years. Unfortunately due to our throw away society the workshop ceased to be profitable a couple of years ago. We have since run the business down and there are only me and my dad left. I don't want to do this job any longer than i have to as my main job was workshop supervisor, turning my hands to the Auto Electrical side of the business only for a break from the workshop now and then. I decided i would build on my business management knowledge and looked at doing a course in that but then having dealt with small amounts of the business accounts, plus everyday dealings with stock, suppliers and customers i thought i'd take a look at an accounting qualification. The AAT caught my eye but before i started that i enroled with my local college and took a simple bookkeeping course (City & Guilds Manual), progressed onto the computerised and was offered the chance of level 2 computerised for a few quid extra. Just snowballed from there, i actually think i'm more addicted to study than actually being happy with receiving the quals lol. I think Shaun mentioned once that he thought all (small) business owners should have some form of accountancy qualification, i'm sure i read that here anyway and the more i learn the more that makes sense. (If it wasn't Shaun i apologise to whoever said it for not remembering your name)
yep, was definitely me although I can't remember in which thread(s).
I've seen it a lot just recently where business owners think that they are doing well but seem to totally ignore the costs associated with their turnover!
Makes you just want to beat them repeatedly with a nice solid ACCA text book... Knew that there was a use for these things when they went out of date. Beating clients!... Ooh, god help me now if any of my clients turn up blugeoned to death with a heavy book!
Anyway, to quote the great Theo Paphitis "Turnover is vanity, profit is sanity".
Makes me think that I've just managed to find a bunch of vain, insane clients... Worry not about them reading this, I've actually told them that to their faces.... Nobody ever accused me of being subtle!
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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.
One of the most common is the "how can I be making a profit when I don't have the cash to repay the money I have loaned the company" - Answer "'cos you've got £50K tied up in stock".
One of the most common is the "how can I be making a profit when I don't have the cash to repay the money I have loaned the company" - Answer "'cos you've got £50K tied up in stock".
Leading on from Sheila's comment (and going OT again), how do you explain to clients that profit doesn't always mean cash in the bank?
To answer your query as to how to explain profit doesnt equal cash is that profit is based on when you sell the goods not when you are paid for them. (good old accruals concept)
Therefore it is all about the movement in assets and liabilities as to how there is a different in profit and cash.
If assets increase eg you have more debtors ie people taking longer to pay you or your stock increases ie you have goods you have bought and probably paid for but havent sold then this will reduce your cash. Equally if your creditors fall then your cash also falls ie you are paying your suppliers quicker, or you are repaying loans.
Of course the opposite ie fall in assets or increases in liabilties will improve your cash position.
Many thanks for your reply. Yes, very clear thanks.....I was asked by a client the other day and hopefully I didn't make a pig's ear of it! Just wanted to be more prepared next time I'm asked with a clearer explanation!
Hiya - in my experience many people struggle with the difference between a capital and a revenue item. Plus, to confuse the issue, not many people understand the concept of depreciation and capital allowances.
I normally face clients that provide only a portion of the paperwork that is needed to keep their books. The most problematic piece of paper to obtain seems to be the bank account statement which I'm always spending time chasing...
Fabs
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