Hi all, me again, I seem to be going over and over this in my mind..I currently have 5 clients (4 small and 1 quite big) and the 4 small ones generally only want my services for maintaining their books so they can do their own Tax Returns.
When I receive their receipts / paying in slips on a monthly basis, I log them on an excel spreadsheet and I update summary sheet showing over all income and expenditure. On the expenditure sheet I breakdown all types of expenditure so the client can see what is spent where. It also helps us both check if there is anything missing.
I was never given Bank Statements, so it is literally an income and expenditure log, and each client takes about an hour a month each.
In the various employed jobs I have held (and still hold as waiting to gather as many clients as possible before jumping ship) I am used to doing the Bank Rec, and purchase/sales ledgers etc. It feels strange to only do these bits, but I guess, I only do what I am paid to do?? Or would you have said from the start that you wish to do this, this and this, and you will charge £......and I will also need them to provide me with.....Bank Statements etc..
I will be handing the files over to my clients at year end with neat income and expenditure. I have requested that from the start of the new year I receive a copy of their bank statements so I can start to tick things off against it.
I guess without bank statements it would be very hard to form a trial balance anyway.
Another client only wishes for me to use a computerised system to log their purchases and sales, so it is far easier, come the VAT returns, to prepare a VAT return online. I don't have an opening figure for this bank account, so again, cant fully utilise the computerised system and get the whole business on there. Not everything is paid out of the Bank Account, so would be very confusing, plus it is a personal one, rather than business.
I think, after reading all the amazing threads on there, where Bookkeepers/Accountants are performing very technical calculations, and putting lots of adjustments through etc, I'm wondering if I am missing something. I am also confused as to where the line is drawn between "Bookkeeper" and "Accountant"?
I think I am after reassurance that can only do what I can do with what I am given and what the client wishes to pay fo, but I feel like I am doing half a job. I guess next financial year should be a new start!
I guess I am just after reassurance - again, as per my other posts on here.
Hi all, me again, I seem to be going over and over this in my mind..I currently have 5 clients (4 small and 1 quite big) and the 4 small ones generally only want my services for maintaining their books so they can do their own Tax Returns.
When I receive their receipts / paying in slips on a monthly basis, I log them on an excel spreadsheet and I update summary sheet showing over all income and expenditure. On the expenditure sheet I breakdown all types of expenditure so the client can see what is spent where. It also helps us both check if there is anything missing.
Have you looked at VT cashbook? Its free and will be easier than maintaining a spreadsheet.
I will be handing the files over to my clients at year end with neat income and expenditure. I have requested that from the start of the new year I receive a copy of their bank statements so I can start to tick things off against it.
I guess without bank statements it would be very hard to form a trial balance anyway.
Not necessarily. Where clients don't have a dedicated bank account I record everything as cash (which may not necessarily be the correct way)
Another client only wishes for me to use a computerised system to log their purchases and sales, so it is far easier, come the VAT returns, to prepare a VAT return online. I don't have an opening figure for this bank account, so again, cant fully utilise the computerised system and get the whole business on there. Not everything is paid out of the Bank Account, so would be very confusing, plus it is a personal one, rather than business.
If it's a personal bank account, don't even attempt to have one on the accounts. All you need to do is record income and purchases, together with VAT, then calculate on a quarterly basis. VT cashbook will let you do this, but may be worth considering VT+ accounts at approx £150 one off fee. (VT cashbook is a slimmed down versions of VT+) However, I would suggest that you advise your client to get a business bank account. VAT registered (unless voluntary) would suggest his turnover is over £83,000 a year. That's a lot to be running through a personal account and the banks don't like it, but it will also help you to record his income and expenditure better.
I think, after reading all the amazing threads on there, where Bookkeepers/Accountants are performing very technical calculations, and putting lots of adjustments through etc, I'm wondering if I am missing something. I am also confused as to where the line is drawn between "Bookkeeper" and "Accountant"?
Technically you become an accountant once you go beyond trial balance. eg completing sole trader tax returns. Personally I think there's more to it than that, and although I do tax returns and basic Ltd Company returns, I don't consider myself an accountant.
I think I am after reassurance that can only do what I can do with what I am given and what the client wishes to pay for, but I feel like I am doing half a job. I guess next financial year should be a new start!
Only do what you feel confident in your abilities to do, but at the same time aim to develop your skills to expand your range of services at a later date.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi Lorna
Things that pop into my head, random order....
And you can say most of this to them I guess..
How do you know you have included all the business income and expenditure if they don't provide bank statements.
What happens when they DO want proper accounts doing (for a mortgage, a loan or some other such)
They are getting away with free banking whilst the rest of us business owners subsidise them (John is right, Bank don't like them and usually catch up with them!)
In the event of a HMRC inspection how can they show what is business v personal without a business bank account (plus it will cost them a lot more to cover your time to assist them in such). Dig into the business do find the slightest thing wrong and they will be digging into the private stuff too.
Basis periods/what is there financial year end- how is this dealt with?
Who keeps the fixed asset register?
Who does the capital allowances/how do they know what to add back that is not allowable for tax-depreciation/entertainment etc?
What happens when they want to either incorporate or sell their business with no financials?
Should they be on accruals based accounting and do you provide them with such/adjustments for prepayments/accruals (including accrued or deferred income) etc
At the moment it seems you are doing only part of the process for them. Some clients want that from a bookkeeper and then pass the rest to the Accountant for year end, but it seems that most of yours are doing the more complex (yet they don't realise it) part themselves. I wouldn't do such, have one that wants to go down that route due to a controlling Accountant but I've told them I do the bookkeeping with everything I need or they can go elsewhere.
Obviously up to you if you continue as they are, but if you do make sure it is all documented very fully and carefully in your engagement letter.
If you are not getting what you need to do your job, DESPITE your initial conversation then do not leave it until the next financial year. Tackle it now, otherwise things will never ever change.
Take the time you have now to do yourself some comprehensive lists of what you would need from each type of entity of client. Include everything you can think of, including eg what you would need for the VaT return, even if you aren't doing the VAt return. It's better to have a full list with what you don't need crossed off rather than trying to remember what you do need each time you get a new one.
Take each and every piece of work as a learning curve. I always say you learn more after your exams anyway....real world is completely different than what you learn on any course.
Might be worth bouncing this post to encourage further discussion in Feb.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
