This is probably a silly question but I thought I would ask as Im sure there are many newbies on here that have thought the same as me when thinking about there first clients.
I'm thinking that not all clients are going to be prepared with everything in folders and all in order so
After the initial meeting you are presented with a shoebox or carrier bag full of paperwork ..........
Where do you start??
Initial im thinking opening balance from the previous accounts but if they are just starting out how would you get yourself organised ??
I'd like to have have procedures in place to deal with these type of clients and so asking how everyone else would approach this???
Ensure that you have a full set of bank statements as they're your driver.
If there are statements missing then request that the client has them reprinted.
Have a large desk (or floor) area and go through the box / carrier bag sorting everything into date sequence.
Identify gaps as quickly as possible (invoices / receipts not reflected on the bank statements, bank entries with no supporting documentation) and badger the client about every one of them and don't be fobbed off.
There's a whole other set of issues around identifying accruals and prepayments if your not the first bookkeeper / accountant for a client as invariably accounts are prepared on a accruals basis but clients seem to believe that they are prepared on a cash basis which can cause entries to be double counted or uncounted at changeover even with the most helpful of clients.
Generally I find clients to be basically honest but such cannot be assumed. (missing bank statements could be a sign that there is something that they think that they can hide from you, and by exctension HMRC).
You will find the worst clients to be those who try to be too helpful in giving you what they think you need rather than just giving you everything. When I first started I think that I spent longer trying to understand clients spreadsheets than if I had just ignored everything that they had done to date.
Unfortunately, where a client spends a lot of time building a system that they are proud of when they talk to you they invariably reference their spreadsheets so it helps to at least have a passing understanding of what they have done even if its totally incorrect.
Ensure that you perform your MLR procedures to keep yourself covered.
Also you will find that you get the occassional client that believes that as soon as they have representation they have divested themselves of all responsibility so make sure that you point out to the client the sections your engagement letter emphasising that responsibility for the books and records remains with client management, not with the bookkeeper or accountant (that invariably seems to come as a surprise to them).
Cash businesses are the worst. Where you have those drive them primarily through a petty cash account and much of their takings will never hit a real bank account.
Hope that at least some part of the above proves useful going forwards and hope that you get nothing but decent clients (even where they are disorganised).
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.
Once all the bank statements and invoices/receipts have been collated and ready for inputting onto the chosen software
would you batch enter the receipts/invoices and then post the relevant bank payments or would it be better to post them individual and then post to the bank ?
Sorry for all the question just want to get a routine in place.
Once all the bank statements and invoices/receipts have been collated and ready for inputting onto the chosen software would you batch enter the receipts/invoices and then post the relevant bank payments or would it be better to post them individual and then post to the bank ?
Hi Michelle,
I'll answer your question as regards speed and can only speak for myself but when making masses of entries,like with like is usually the most efficient. I would suggest a try and see what suits you approach but you could break down entering as follows:-
Sales Invoices
Purchase Invoices
Bank - Further split into Deposits, DD's, SO's, Cheques, other repetitive entries
Credit Cards
Cash
Whether such a break down of tasks is easier and quicker will also depend on the software being used and the client concerned. I have an exception to the above list but won't muddy the water with that just now.
The less one is referring to different sources of information, the faster one can input data. EG.I find it slower simultaneously perusing: invoices, bank statements, client bookkeeping, invoices, cheque stubs, pay-in slips etc.
Also, when you have had the client for a few years, you will know many of the usual entries at a glance and you won't need all the above in front of you at the same time.
HTH
TIm
Sorry for all the question just want to get a routine in place.
totally agree but don't you find the old 80/20 rule creeps in (80% of the work takes 20% of the time).
As with yourself I always lead with the sales invoices then purchase invoices.
Of late I've found cleints tend to use Paypal quite a lot which I treat as an extension to the associated bank account rather than a bank account in its own right otherwise you end up all cluttered up with transfers in and out where the reality is that its just an extension of the account that serves it.
Michelle,
One piece of advice. Things in the books without explanation are easy to spot but watch out for the gaps!
Missing cheque numbers, missing invoice numbers, etc. and always get an explanation for why the gap is there.
Personally I keep a log of all oral representations made and at the end get the client to sign a document (prepared by me as I went through the books) agreeing to the list of statements before I finish off the self assessment.
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.
Identify the cash income/expense. Analyse the expenses and post them
Depending on how many transactions and type of transaction on the bank statement either analyse on excel if not many or if loads buy OCRex which will scan all the bank statement into excel format and then you can quickly analyse. Depending on software you use can then upload full audit trail into accounts
this is a really useful thread as I have just been through a similar situation with a new client.
My biggest issue is its a Ltd co and and most of the transactions on the company bank account are for cash withdrawals, expenses for his wife's bushiness, transfers to owners bank account etc and when I ask for paperwork he just tells me to put it all to Directors loans. For any transactions like train tickets etc I haven't seen any paperwork which I am not happy about. When I ask he says he has them, but for me to do my job properly I need to see them I can't just take his word for everything can I?
"Extention to the associated bank account" Would you just net off the transfers ?
Is this where every time a sale is made the funds are transferred to the current account? Then every time a purchase is made the funds are transferred from the current account. Hahaha.
The first Paypal job I got about ten years ago was such a ream of mess that I've been a bit reluctant since. They also put £25K into the venture without telling me first. Think black hole.
It must also be ten years since I first warned chat-room mates about selling more than just the loft contents on Ebay. I must have put them off as I don't get many online shops.
The bank account just act as feeder account for Paypal the you end up with reams of paperwork especially where it involves foreign currency translation.
Personally I drop the Paypal stuff to Excel and filter out the gumf and filler to try and find whats really happened. I get rid of all of the currency translation steps just leaving the actual transactions to match up to the invoices / receipts. then I really don't care about clients moving stuff from bank account a to bank account b to paypal then going through currency translations and then reversing it as I just treat it all as one bank account and drop the meaningless movements.
The one's that I have are not Ebay sellers but rather using Paypal as card processing to pay for services.
On the Ebay front I don't see how anyone makes any money on it as generally things are cheaper on Amazon... Well, they have to be as there are loads of these Ebay shops just using Amazon as a drop shipper so they're adding markup and postage to Amazons prices and free postage which they need to to pay for the listing fee's.
The whole idea of Ebay drop shippers seems a flawed concept to me but then sure that it must work for one or two in order to sucker the rest of the hoard in.
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.
