I have a prospective client. I will be taking over the accounting from 1st Aug onwards. The client's financial year is from 6th April to 5th April.
What kind of issues should I be considering while taking over work from the middle of the year?
Should I check whether there is any backlog from earlier months? Should I request for the VAT filing to be completed by his accountant till the last quarter before I take over? If I take the onus of filing the VAT return can I trust his accountant to give me all the required information?
I have just taken on someone mid year and their accountant emailed me copies of previous VAT returns. This helped me a lot to get a feel of the business, and where and how they were posting invoices.
It also highlighted errors - quite a lot actually. I had assumed that because I was taking over from an accountant everything would be spot on and correct...how wrong was I.
Thanks for your quick reply. Did you take on any backlog as well from the earlier accountant? How does one charge for the backlog, say there is a backlog of 2 months work to be done, do you just do an average of your annual accounting fees and multiply by 2 to get the 2 months backlog charge?
The catch up for any back log will need to be discussed and agreed between you, your client and the previous accountant to decide who is responsible to get up to date.
If you are to take on then you will need to agree with your client the fee for this additional work. Though as you say if you are charging them say £1200 per year for bookkeeping and there is two months to catch up then would be reasonable to charge them a one of amount of £200 to get the bookkeeping up to date.
Yes, I did take on a backlog, 3 months worth of work. I picked up from when the last VAT return had been submitted and charged the client a set up fee, which didn't really cover 3 months of pay but I figured that when I got everything up and running it would be a lot quickier and it would be easier.
I have found that the first month of taking on anyone new is a complete headache as you are trying to learn their business, find out how things were done and if they were done wrong correcting them. But once you get past that first hurdle it does become easier.
Just make sure you are very clear in your engagement letter the date you take over from the accountant.
