I would be talking to a prospective client very soon. I just wanted some tips and questions from you all that I should be asking this clent. He is a sole proprietor, so what do you suggest my questions should be like? I know a few questions like, for e.g.
1. How much work I would be taking over from him, does it relate to the current accounting period and from which month?
2.I s the client VAT registered?
3. Does he have any employees?
4. Would he be sending me the documents by post or email?
5. Does he use any specific accounting software?
These are the questions I have thought of till now. Can you please suggest me any other questions that would be relevant to ask?
I don't ask a list of questions, I find out all about a potential customer's business and what they're looking for from me and that tells me everything I need to know.
I do have various information that I want from the client including VAT number, UTR number, Company Number, VAT return dates, Period end date, etc.
Make sure that you are able to acquire all MLR information so at least evidence such as driving licence, passport, utility bills etc.
Ensure that the client has told their previous bookkeeper that they are being replaced and ensure that the client gives their previous bookkeeper permission to talk to you.
Prepare your engagement letter and ensure the client reads and signs it. Then keep that in the clients permanent file.
Make sure that you have access to the asset register which is not always kept in the same software.
Following that though I would phrase my questions differently and prepare leading questions and parry's for obvious comebacks. Lets take the above few questions :
3. Do you have employee's? Phrase that one as "How many employee's do you have" as it leaves you less open to the client thinking this person knows absolutely nothing about my business.
4. Would you be sending documents by Post or Mail What do you do when the client turns around and states that they expect you to collect them. What do you do when the client is taken aback by the suggestion that his original docuemtns be entrusted to the postal service? Personally unless a client suggested otherwise I would always assume that either I was to visit the clients premises on a periodic basis to pick up documentation or they would bring the documentation to me.
5. Not just what software do you use but... How long have you used it for Are you happy with it Does it give you everything that you expected it to Is there anything in particular you need it to do that it doesn't?
That line of questioning may open up other oppotrtunities (why am I thinking that Bob Harper would be proud of me for saying that!) although unless you know all of the alternatives I would stay clear of advising the client to change to different software. Rather you should be looking at way of getting their existing software to do what they want it to (Most software will dump to CSV which can be read into Excel to manipulate as one needs).
So what if they do use a certain sort of software are you going t be maintaining their records off site using that software? If not, how does your software integrate with theirs? (if at all). Will you only be able to work on their systems on their site and if so does that fit in with the sort of arrangement that you were looking for? Remember, sometimes we also have to walk away from potential clients!
Hope that helps for starters. Just a flying visit for me tonight so I've skipped over the answer and sure that I've missed out loads of things that I will be slapping my forehead about later when I re-read this.
kind regards,
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.
Thanks for the valuable information that you have given. I would surely keep your suggestions in mind while talking to the client. If you don't mind can you please send me an example of an engagement letter, I have no idea how it should look like.
There are letters of engagement available from one's professional body and available freely on the internet although I doubt that you will find one that is perfect for you and you will need to amend it as I think that we all have to our individual business requirements.
There are certainly some paragraphs in the above thread that can be lifted directly into your own LOE so long as you appreciate that they come with no legal guarantee... Unfotunately although we read legal documents we are not lawyers so no guarantee can be given as to how watertight such paragraphs would be in a court of law.
That said, the LOE is more about putting one's position in writing for the client than a court of law. If a client see's in writing that they agreed to something then they are likely to comply with such agreement regardless as to it's actual legal standing.
Mine has input from several different LOE's of various supervisory bodies and runs to five pages excluding attachments.
One other positive point about writing your own LOE. You will know and understand exactly what is included in it which cannot always be said when one simply uses their supervisory bodies.
Hope that the above thread helps,
kind regards,
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.
you have a legal requirement to gather MLR information where the client does not.
Whilst I've been asked by agents to prove who I am I have neever been asked such by a client.
Your link to stability comes in the form of clients that you have worked with as a contract accountant (so the clients would be the practices, businesses that you worked with).
I assume that you have PII insurance even if you do not have a practicing certificate.
Also, in the absence of a practicing certificate you must have MLR cover from HMRC which will evidence who you are on a nice HMRC headed document.
Whilst these may not mean a lot to the client waving the official looking forms in their general direction should aleviate any worries that you are legitimate.
HTH,
Shaun.
p.s. Good luck at the meeting.
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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.
By not having registered with HMRC I am assuming that is in response to my statement about registering with HMRC for MLR.
I cannot emphasise strongly enough that you cannot take on clients or even contemplate taking them on until you are covered for MLR.
To not have MLR cover carries a penalty of up to two years imprisonment and unlimited fine and in addition you would lose your membership of the ACCA (and be fined £800 by them for the privelage!).
The fact that payment is in kind by this first client rather than in cash is simply a barter transaction as detailed in IAS 18 Revenue.
As you know from your studies for a transaction to take place it may be an exchange of resources, services or obligations. All are basically exactly the same as if you had been paid in cash.
There is no circumstance where even at this stage you can not be registered for money laundering.
If you have clients and then apply it is already too late.
I appreciate what you are saying about not wanting to invest to much before one has clients but this is really something that we all had to do and it very much comes before even buying the software that we could not do the job without.
The PII is sensible but not a legal requirement but there is no way around the MLR.
Sorry that this post is a little negative,
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.
By not having registered with HMRC I am assuming that is in response to my statement about registering with HMRC for MLR.
I cannot emphasise strongly enough that you cannot take on clients or even contemplate taking them on until you are covered for MLR.
To not have MLR cover carries a penalty of up to two years imprisonment and unlimited fine and in addition you would lose your membership of the ACCA (and be fined £800 by them for the privelage!).
The fact that payment is in kind by this first client rather than in cash is simply a barter transaction as detailed in IAS 18 Revenue.
As you know from your studies for a transaction to take place it may be an exchange of resources, services or obligations. All are basically exactly the same as if you had been paid in cash.
There is no circumstance where even at this stage you can not be registered for money laundering.
If you have clients and then apply it is already too late.
I appreciate what you are saying about not wanting to invest to much before one has clients but this is really something that we all had to do and it very much comes before even buying the software that we could not do the job without.
The PII is sensible but not a legal requirement but there is no way around the MLR.
Sorry that this post is a little negative,
Shaun.
Hi Shaun,
Thank you for your post. I think I was not clear enough. I would not undertake any work without MLR. I am well aware that I am obliged to do this as well as I must sign a engagement letter with all my client, if I have any.
What I was saying that if I ever get clients and it is clear to that it is worth making money this way then I will set up a limited company rather than working as a self-employed.
Why would I jeopardise my career and reputation by trying something which is not compliant with the law????
I think, Shaun, from one hand it is good that you keep reminding others about compliance with rules and regulations, but should not we give others a benefit of doubt?
we have to keep telling people these things as you would be surprised how many don't realise.
Better to er on the side of caution than not remind someone and that person being the one who slips through the net.
I work with a lot of ACCA (and CIMA / CGMA) people and the bulk of them know all about MLR but not how or when to register as there is no need for them to be registered in the consultant roles that they are in.
Many of the people on this site are covered by default by having a practicing certificate from the ICB or IAB but those who go it alone sometimes lose track of such matters whilst concetrating on the idea of getyting the business off the ground.
Up until the earlier post I had not considered there to be any risk that this was something that you might have missed but the discussion of barter transactions and not wishing to invest until you were sure rang warning bells that you may not have realised the situation over MLR.
My appologies if the post was considered in any way condescending. Such was not my intent.
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.
You have to have be MLR compliant before you look to take on any clients be that either through a professional body or directly through HMRC. I am not currently with any professional body and have to pay £110 per year to be compliant with HMRC.
Would also say that you should have PII in place before you look to take on any clients. As if you give an advice which proves to be wrong and a client sues you then you will be left high and dry unless you have any PII in place.
Note what you say that you dont want to spend much before you take the leap but the above two will cost somewhere between £200-£300 and is surely not a large sum if you want to make this your career.
This is what I will ask tomorrow to a potential client ... Too long but covers everything!
Company
Company Name Company Number Type? Ltd/Partnership? Where is the Registered Office VAT Registered # Directors Who is Company Secretary Who will maintain Secretarial Work Trades in: Website Offices in how many locations? What is the biggest challenge of the business so far
Accountant
Accountants Name How often do accountants require TB's Do they have a chart of accounts ready? Any specific Accounting software required Do they have a UTR # Will you require any reporting from me?
Records
How have business transactions been tracked so far Where are the current physical records Who will store the records post processing How often will you submitt records? Will records be delivered by Post or in Person?
Bank
Do you have a business bank account Was this from inception Do you have online banking facilities? May I see a bank statement
Equity
How much contribution was made In what % per Director
Employees + Payroll
# Employees Payroll Required How do directors get paid? Any benefits drawn?
Assets
What business assets do you have? Do you have an asset register Do you have a stock register Do you buy stock and hold or buy to use?
Liabilities
What are your business expenses? Are you telephone contracts under a business name? Do you use any part of your home for business? Advertising costs? Website maintenance costs? Is the business geared at all?
Suppliers
How many invoices per week? How often are they paid What method of payment used Do you work with trusted long term suppliers? Do you shop around for supplies?
Customers
Turnover How is Invoicing done so far? How many Invoices per week? Who does credit control? How are overdues tracked? How have you attracted customers? Do you have any advertising costs? How are prices charged decided?
-- Edited by The Accountant and Bookkeeper on Wednesday 6th of November 2013 02:30:03 PM
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