I'm taking over the accounts and self assessment for a client. I'm trying to work out if they use the actual cost or mileage rate to account for my clients car expenses. The client has said that she has never been asked for the invoices for MOT, Insurance etc nor for the mileage of her vehicle. The accountant happens to be one who I have approached for bookkeeping work so I don't really want to ask him for the information because he will know he has lost a client to me! Any idea how I can get this information?
surely your professional bodies expectations over professional ettiquette require that you correspond with the incumbant accountant to ensure that they realise that they no longer represent the client before you can issue an engagement letter to the client.
You will also require for your client to contact their existing accountant to give them permission to talk to you otherwise your letters will go unanswered.
If you are not honest now you will quickly lose both the work from this accountant plus find yourself being ignored by other accountants in your area.
Just be honest. You win some, you lose some, but your bread and butter is the respect of local accountants and you will lose that if you don't follow the proper procedures.
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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.
I will add that passing the bookkeeping and accounting exams is only the start and I have plenty to learn about the admin/professional ettiquette side of things as I'm sure most people just starting out do!
-- Edited by KBS on Tuesday 5th of November 2013 10:10:10 AM
Thanks for your reply Shamus. This is my first client so I am still learning. I have researched a professional clearance letter and will do as you advise and send this off to them. My client is travelling for 5 months (she requires her self assessment to be completed for 2013-2014 so still plenty of time to sort things out). I have had another look through the IAB handbook and there is nothing that I can see on this subject but thank you for pointing this out. Although she is travelling, she is contactable by e-mail. Do you think an e-mail to the accountant from her will suffice or will it need to be a formal letter in the post?
Any advice on how I can approach this accountant in a way that will not affect any future business relationship we may have?!
11:30 and just got my internet back due to an issue with my ISP... Just reminds me why the whole concept of the cloud is a bloody stupid idea, but I digress.
I was in a foul mood with a client last night so my message may have come accross slightly sharper than it was intended, appologies if that was the case.
This is one of the area's where accountants gets annoyed that some bodies don't give such high regard to ethics as others.
If an ACCA person didn't send an ettiquette letter they could find themselves on the wrong end of a disciplinary hearing and £800+ costs for the privelage.
There was actually a case last week reported in AccountancyAge of a Chartered being fined £5k (including costs) by the ICAEW for not responding to an ettiquette letter.
I think that with some of the bookeeping bodies their rules were formulated before they realised that they would need to play in the same territory as accountants to survive (accounts filing, tax returns, etc).
Playing the game to the same rules as accountants will score brownie points for your practice.
Nobody ever likes to lose a client but we live with the reality that sometimes clients do move to pastures new.
Where it was tiny client most accountants will accept that there are scenario's that using an accountant was wielding a sledghammer to crack a nut.
Where a client is more complex and is moving simply to lower fee's I personally generally figure that those one's will be back in a year or so.
In all situations local accountants whilst rivals for clients understand that today they may lose one to you, tomorrow is may be the other way around.
Some clients do get nasty surprises on leaving espechially mid year as there will in many cases be a charge for work done to date... Which may be nothing but the accountant will still argue that they were available for that period and did not take on other clients as their books were full so there is required payment for the lost opportunity cost.
Causes no end of issues that one and personally if I've done no work thats not something that I pursue as I feel that it would alienate the client and even when a client has left you. If they know that you did a good job they still remain an unpaid sales force in the local market.
As you are just starting out you really want to do everything in your power to keep the local accountants happy.
Ettiquette letters, passing on clients that are too complex for you, etc.
In return you will find that you gain respect and through that clients too small for some accountancy practices to be bothered with.
Be careful though that they do not just try unloading poor quality clients onto you (non payers, very poor record keepers, etc.).
I think that it all comes down to the basic principle of treating the local accountants as you would expect to be treated yourself.
Yes, you will come accross arrogance and the occassional accountant that you just want to hold under water until the bubbles stop but for the most part you should find the relationships mutually beneficial.
Good luck with the new venture, fingers crossed this note will lead to some good (and prosperous) working relationships with your local accountants.
kindest 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 Shamus, I have to admit, you did scare me with your original response!!! Rule one for me, man up and grow some balls!!! She was only a very small client so I am sure she won't be missed by him! How do I get around it if he simply does not reply or take an age to reply?!
the rules for an ettiquette letter is that the accountant must reply... But, we all live in the real world rather than the ivory towers of the professional bodies and know that some accountants can really drag their feet although to avoid a potential disciplinary (with serious fine and possible expulsion) they would reply eventually.
After the initial letter it is good form to wait two weeks before sending a reminder then one further week before sending a follow up that states :
"In the absence of a reply we assume that there is no reason for us not to accept xxxxxxxxxxxxxxxxxxxxxx as a client as of dd/mm/yyyy".
Some also include a line about reporting the lack of response to the accountants professional body but that is really not going to win you any brownie points with the local accountants unless they're all after that particular accountants blood as well.
Whilst email is an acceptable form of correspondence one needs to make additional allowance for the fact that through no fault of yours some messages do get relegated to Spam folders without any apparent reasoning.
Note that you will also need to get your client to give their accountant permission to talk to you. They must receive that letter before you send the ettiquette letter otherwise they have justification for not replying.
For those I tend to write the letter from the client myself, get the client to sign it and then post it myself. (Just wait until you are dependant upon a client to do anything! Any time that you can try and take everything out of their hands to ensure that it gets done quickly and properly).
If everything goes well try to get all of your questions together so that you only have to talk with the accountant once.
The client must appreciate that they are likely to be charged for your meeting with the accountant (both your fee's and the accountants fee's).
The information from the accountant that you have a right to is a signed full set of accounts and the trial balance upon which that was based.... Nothing else!
The accountant (or the assistant that they fob you off with) should help with various specific questions but it's worth noting that neither you nor the client have any right of access to the permanent file that the accountant will have on the client so make sure that you get details of all entries in the fixed asset register including depreciation schedules plus details of any double taxation suffered in early years, deferred tax, etc. at the meeting.
Asking the right questions will also impress the accountant. Consider every accountant meeting an interview. Dress to impress, sound confident, ask the right questions and before you know it they'll be passing you work.
Hope that helps for starters,
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 very much for your knowledgeable response. I have always found you give such thorough information and have gained considerable knowledge from your posts!
I cannot believe anyone ever changes their bookkeeper/accountant if this is the process they have to go through!!
I completely understand the clearance letter part, common courtesy and all. In reality, this particular client is a mobile beautician. She literally only goes to him once a year to have her self assessment completed. I would never assume that by doing her self assessment one year would mean that she would be returning next year! I can completely understand if this was a regular client whom they had contact with weekly, monthly or 6 monthly. I think of it in the terms of me buying a property. The solicitor I used to by my first property wasn't the solicitor I used to buy my second property...and why should they be?!!!
I really never knew that there was so much red tape to go through. It's hard enough to make contact with a potential client, let alone secure them if they have to go through this process!
from the clients perspective it should all be transient and relatively painless. Thats why they hire us so that we take much of the headache of running their companies off their shoulders and they don't need to get involved with much of this palava over ethics and professional ettiquette.
Them writing to their accountant to give them permission to talk to a new accountant is really for their own protection combined with the professional perception of accountancy.
There is a duty of confidentiality held between the accountant and their client which must not be breached without specific written permission. All that the letter does is give that permission to the accountant to break their confidentiality agreement to the named party and noone else who does not have a legal right to such information (that includes the police unless the police have obtained a court order for such information).
Consider it like doctor patient confidentiality and your not too far off.
This is not really like a service that you go and purchase off the shelf which is more or less how you explain the solicitor arrangement.
You work with the client planning their tax affairs and understanding how their business works in order to advise them how to improve their bottom line and keep more of what they turn over.
A solicitor would look after the sale of a house and that would be the end of the relationship where an accountant will prepare and file accounts as part of the service rather than that being the whole service.
There is a little red tape involved but much of it is just ensuring that you've got all of your ducks in a row.
Rather than thinking of it as a one off service such as selling a house. Think of it more like changing utility provider whih I feel is closer to the reality of the arrangement.
On the whole client question I find that the only part that surprises them is that we need to confirm their identity for MLR.
That seems to be the first time that they realise that they are not actually hiring someone to work for them but rather consulting a professional who will work with them (for a fee)... A subtle but important difference as at times you need to put it in no uncertain terms that they are doing things incorrectly and that can bedifficult to do if they feel that you work for them.
Hope that helps,
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 for your help on this matter. I did as you advised and got the client to send a letter to the accountant, well I typed, printed and posted holding their hand and making them sign it! I received an e-mail back from the accountant passing on her P&L and tax return for last year. Firstly, the calculations of the expenses on the P&L are out by £3 which I know isn't much but you would expect them to be accurate! Secondly, despite my specifically asking how they accounted for the clients use of the car, they failed to answer this and lastly, the client uses the same account for her personal expenses as well as receiving funds for the business. I will explain to her the need to keep things separately but that does not help the situation now. Whilst she is only a very small customer, I want to do things the correct way. I planned to put any personal expenses into her drawings account so that I can reconcile her bank. I do not have the opening balance of this. how would you suggest I tackle this?!!!
