Writing down the details cash payments and receipts in a note book is a business record in its own right, although not ideal. If the therapists want to stay self-employed they need to supply invoices, or your client could find that either the expenses are disallowed, or shev could become liable to PAYE for the money she pays them. The trouble with cash is ensuring that at no point does the "cash account" go into deficit. As then the question is where did the extra cash come from?
-- Edited by YLB-HO on Thursday 19th of January 2012 10:03:29 PM
I am just setting up my bookkeeping practice and have my first client. Whilst I am an ACCA qualified accountant, I am struggling with some of the more basic issues that I am being faced with.
Please could someone give me some advice on where a bookkeeper's role begins......... I am trying to input my clients income which she has recorded in three seperate places, an excel spreadsheet, a cash book and a tatty old notebook. All three are supposed to equal but guess what they don't! Am I expected to reconcile all three and sort out all the inconsistencies (would take hours to sort) or should I expect her to give me one definitive list. As it's my first client I want to deliver a really good service, but I am nervous about the data that I am working with.
Quite often you'll find that what a client tells you should be taken with a pinch of salt and you pretty much have to scrap wat they've done and take it all back to the real evidence of invoices, receipts and bank statements. (fingers crossed your clients business has all of those. Some cash businesses tend to ignore basic documentation all together!).
There will be useful information amongst all of the contradictory stuff from your client but sometimes it needs a lot of work to find it.
If you have questions about conflicting data don't be afraid to ask the client. You don't seem unprofessional for asking things like that. Quite the opposit, it's unprofessional if you don't.
Good luck with this first one. Sure that you'll do a lot better than you think you will.
First clients are always a time that people worry. Your certainly not alone in what you're feeling now and you always have us on the site to turn to if you hit problems.
kind regards,
Shaun.
__________________
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.
Thank you so much for your reply. I don't feel quite so alone now!
My client has lots of cash income transations and none are supported by a receipt! I therefore have nothing to reconcile back to, other than her 3 different ways of recording all of which are different. I'm happy to help her going forward and sort out a way of recording the transactions correctly, but should I be expected to sit for hours reconciling all 3 books before I input them to Sage? I can't even reconcile them back to her bank paying in book. The expenses side is much better, she has recorded most of her transactions and I can reconcile to the bank statement.
Do your clients record any of the transactions themselves? I'm slightly concerned that I'm expecting the client to record all of the tranactions into an excel spreadsheet or something similar and then I take this to input into SAGE. That seems to me to be duplicating the recording the transactions. Or do you just take a big bag of receipts and invoices and work from those?
I'm doing this for free at the moment...!! She bought her business last July and I have offered to get her books up date, so that I can learn to use SAGE and get some experience on the basis that I become her bookkeeper going forward. I haven't worked out what to charge yet!
That's reassuring because I started with the bank statements! That all seemed fairly straightforward and most of her expenses are supported by a receipt. It's just the cash income transactions that are a nightmare. There are no receipts etc. She even pays out large payments to her self employed therapists (it's a health business) with no evidence of the payment.
Thank you for your reply. I am not sure I fully understand your comment about the cash account going into deficit and the question of where did the extra cash come from. Please could you expand?
I think I must have been tired last night.............. I do understand your comment about the cash position and it is a very valid point for my client.
