Some advice please. I did a big bookkeeping job last year for someone, it took me many hours and was my biggest invoice of the year last year. I sent all the details to his accountant, reports from Quickbooks, explanations of what I'd done and why. I'd taken some time to make sure the starting balances matched those on the balance sheet of the previous year. I thought I did a pretty good job. The client recently dropped off the paperwork for the following year and said the accountant had said I'd done a really good job. So I was pleased. The paperwork he gave me included the accounts produced by the accountant which I was hoping to use to make the appropriate adjustments in Quickbooks to get the right balances on the balance sheet for the end of the year I'd already done. But. Although some of the numbers match the work I had done, there are many that just don't! Some aren't on my list at all eg £thousands of staff costs (I wasn't aware there were any staff!). Some numbers are there but not quite the same, some are completely different and I can't work out why. The fixed assets amount does not match with what I put in and there is a disposal which I didn't know about. The debtors and creditors are thousands out as are the numbers at the bottom of the P&L and balance sheet.
The accountant is a respected high street accountant, very traditional, been around for years type of place. The clients wants his bookkeeping done instantly so I don't have a lot of time to look into it. I plan to call the accountant to discuss it but I have to say I'm quite despondent about the differences. Maybe I should just start a new file each year, do the data entry of the invoices, bank rec, and let them have it to update their records? It's going to cost the client quite a lot for me and the accountant to go over the differences as there are so many of them. It's the first time I have not been able to work out the changes from the accounts produced by another accountant so I was wondering what others do in this situation.
I had asked for any adjustments to be sent to me so I could update my file but nothing came to me. How do they expect me to do this year's bookkeeping when I don't have a correct starting point?
as you have identified you need to talk with the accountant about this and go through each figure that you have an issue with.
Its quite common that the the books and records get a complete overhaul but certain things you would expect to be the same, for example turnover should be the same. If it isn't then is there another division to the business that the client is not telling you about.
It seems quite purturbing if there are high staff costs and no staff... Thats definitely not the directors salary?
As I say, you need to speak with the accountant under the pretext that you need to ensure that your figures are correct before moving forwards and to understand how they came up with the differences so that you can improve your books for them in the future... Thats just the line to give them, I'm not saying that there is anything actually wrong with your books and sure that all of your accruels and prepayments are just as they should be.
Another approach of course is that is HMRC visit you need to be able to tie the figures in the accounts back to the books of prime entry which obviously you cannot at the moment due to the variance.
At the moment you cannot assume that the accountants figures are either right or wrong, you just need a little time with them in order to them to explain the differences.
Cheer up, sure that once explained it will not be as bad as it seems at the moment,
all the best,
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.
It might be possible that the accountant used a bit of creative accountancy in favour of your clients over all tax position? It's not uncommon and I've come across the same situation numerous amounts of times.
Nightmare for us bookkeepers keeping everything neat & tidy only to become a big 'ol jumble at year end again. I'd definitely recommend clarifying a few things with the accountant, otherwise each year it will create a knock on effect and huge differences.
Some of the adjustments the accountant did may be accruals and prepayments. The problem may arise in the future if these are not adjusted later. He may do it internally every year, but if your client ever changes accountant thats when there may be problems.
You may find the disposal - is an asset the Accountant wrote off, rather than a physical disposal.
The Staffing costs also could be accruals. To be paid later, but incured in the earlier period.
I used to ask of a list of year end journal adjustments from the company auditors, when I used to be a management accountantant. This was so I could get my records to tie in with the Accountants records.
Occassionally I would find the had made some incorrect asumptions, and they would have to adjust them back the following year.
Ask for a list of year end and opening year journal adjustments, and then ask about any you are unsure about.
Thanks to all of you. I got a journal from them which made the balance sheet figure match. But some of them were a little strange. Eg an adjustment to the bank account which wasn't there! It was a foreign currency which may have been why but I use Quickbooks which takes account of the exchange rates and now I have an entry in the bank account which isn't appearing on the statement. I guess they will give me another journal at the end to adjust it back out again. It's the first time I haven't been in control and I don't like it!
