So with regards to insurance, the consensus is that I'm not covered by my (accountant) client's P.I.? In the scenario that I make a mistake, it's not picked up by him and then the end client finds it?
Of course I've seen the ads on here for PI. I'm not sure with my short experience whether I'll get cover - but I can ask for a quote! I hope it's not prohibitive as I'm only part time and not earning much.
----edit
Presumably there would have to be a material cost to the client caused by the error in any case. How likely is it that an error would actually end up costing the client money?
-- Edited by Matt on Tuesday 1st of October 2013 01:14:44 PM
I'm working part time as a bookkeeper (sole trader), I only intend to offer my services to qualified accountants whilst I'm still studying as I think this is best for gaining experience as may be less hassle with regards to the MLR and PI insurance. I'm registered and studying CIMA (operational level).
I currently only have one client and am getting a good amount of work. He is a FCMA CGMA member in practice.
Do I need PI insurance or do I need something in writing from my client about his PI insurance? I would really appreciate some guidance as I'm getting a little nervous.
Further details that may be relevant:
This is my first ever paid work as a bookkeeper. I have run my own Ltd companies in the past and did everything myself (VAT, corp tax, annual returns, annual accounts, payroll).
The client needs my services because he is very very busy and needs to outsource the lower-end tasks. The agreement with my client is that he checks all my work, but I don't have that in writing. I have a brief contract for services email citing bookkeeping and accountancy services. Initially this was supposed to be for one client however I've already worked for him on behalf of half a dozen or so.
As agreed with my client at the start, over time his checks are becoming less stringent. However, I've only been working for him for 3 months.
I work from home.
I correspond directly with some of the accountant's clients via email and phone. I also visit one of his client's offices (without him) to do bank updates, expenses, general bookkeeping.
The most recent client is a solicitor whom has parted ways with an accountant and a bookkeeper since April. I have to admit that solicitors and signing any contracts makes me nervous and I may be worrying too much about this stuff.
When the solicitor was taken on as a client I discussed it several times with my accountant client and stated that I felt a little overwhelmed by the scale of the task at hand and also just the fact it's for a solicitor.
But in addition to this, for the first time my client has asked me to write an email to the solicitor and say I am the day to day point of contact. Last night I was asked to compile the draft figures for the VAT return (now late) and send them to the client before being checked, although he has briefly reviewed the sales and expenses analysis I've done.
The client correspondence is being addressed to me but on the accountant's email domain (my name @ his domain).
Last, but not least, I'm really enjoying the work, I get on with the accountant, and I don't want to annoy him by kicking up a fuss if I needn't be worrying.
If you are self-employed even if you are subbying to an accountant you should have insurance and MLR in place.
Who is paying you? Is it the accountant or the client?
Regarding the Solicitor, this is a specialised area and can be very lucrative, the hourly rate is normally a lot higher than normal bookkeeping. Also with a Solicitor there are I believe courses to go on to enable you to do their bookkeeping. This is because there can be large amounts of money at one time in their client account and also there are some rules (I don't know what they are) regarding the money only being allowed to be in the Solicitors account for a certain amount of time. I don't want to put you off but its not straight forward.
HTH.
I sure Shaun will be on here soon to give you a more detailed answer.
As Amanda states if you are employed by the accountant then you would not need your own PII. If you are sub contracted by the accountant then you should have your own PII.
If you are doing work for a solicitor, whether employed or sub contract, make sure you familiarise yourself with the Solicitor accounts rules
I invoice the accountant (on an hourly rate), never his clients. His clients are aware I'm working under the supervision of my accountant client, some know that I'm not employed by him some probably don't. He's outsourcing to me, but as I also correspond directly with his clients it's not totally "behind the scenes" as I suppose it could be if I worked in a back office somewhere for instance (as a freelancer). Whether that makes a difference legally is what I'm wondering. As I don't have limited liability it's a concern (possibly unfounded!).
Yes, the reconciliation of the client account is the next item on the agenda. I don't want to give the impression I'm "on my own"! I'm just concerned about what would happen if I did make a mistake that initially went unnoticed as the volume of work is really ramping up.
If you doing the client bank rec look at Rule 29 of the Solicitors Accounts Rules as there is specific guidance on frequency of recs and also balancing to the client ledgers as well as the cashbook on the accounts system.
As you are self-employed you do need insurance and definately MLR.
The other way to get round it is for him to employ you properly. I doubt if he would want to do that as then he has to pay you holidays and sick pay etc. The cheapest way for him is for you to be self-employed.
Thanks for that link. As far as I know we're going to be reconciling the client account every fortnight so that's well within the 5 week limit, and every 6 months the client account is independently audited. However, I'm only doing work as and when instructed by my client (accountant).
... err the other wise thing he said to me was, "When can you start?"
Thanks for your replies ilsm.
In answer to your first question, I thought (ok hoped!) that I'm working for the accountant (whom I bill), and that my accountant client is "working" for the solicitor, albeit that I provide the bookkeeping elements either directly to the solicitor or indirectly via my accountant client. Either way the accountant still reviews my work.
Opinion seems to be that I still have some kind of liability to the end client regardless of the fact the accountant that is outsourcing to me has PII and is qualified and is (as far as I know) reviewing my work.
You absolutely do need insurance. If there is a problem, the end client would due the accountant and he - or rather his insurers - would sue you to recover their costs.
