Hi Shaun, Thank you for your reply. I am self employed and have been since 2008. I have two other clients who I do bookkeeping for but these I do from my office at home. I do comply with MLR and have since going SE in Jan 2008.

The company has only recently got into difficulties, as it was only recently bought by a new director, so on initial investigation there were no significant red flags, and I am aware many companies go through periods of hardship. The company itself has been trading for some 30 years with no issues as the previous owner still comes in to help, or did before all his testing equipment was taken by the bailiff and the last 3 months invoices haven't been paid for some £16,000 so he is now refusing to do any more work for the company and is very angry at how the business is now being run and how the staff are being treated.

last month the new director called one member of staff and said there was only enough money to pay one member of staff and she would have to chose between it being her or another member of staff. Who does that ??

The new director will not agree to me invoicing them weekly so I am concerned I will expose myself to month of work and not get paid at the end of it.

The issue as I see it is with the new owner/Director

Hi Sarah
First thing that grabbed me was the ir35 issue, but will await the answers to the questions raised by Shaun.

Also, worth adding Ive worked with businesses who have been losing money hand over fist, all looks a bit dire, heads buried in the sand initially but the best part of this job in many ways is being able to spot the issues and help them resolve it, see where costs can be cut, improvements to pricing and sales and cashflows can be made as often folk just need someone else to help them see the wood form the trees.

Would you be able to help them with such? You have put given us the usual into, so perhaps when you have what you need from this/before a next posting you let us have such....background-how long in business as a bookkeeper, qualifications, what prof body, doing any other exams and which body, career before you became a bookkeeper, where based....that sort of thing, as it helps to get to know you and pitch answers better.

For this one, as long as they are paying you, then stick it out, what have you got to lose? Maybe a day or twos income? Or all of it if you just give up.

First question....why do you think they are getting no orders? What can they do to improve that? (What sector?) out of interest too how long has this business been around and is it a fairly recent issue they have been having with cashflow?

When does your trial period end? Do they have an Accountant? Have you had a very frank discussion with the boss or just mentioned things in passing?

Thank you both for your input, I will try and answer all I can.

I work self employed so I am ST trading as AA and I do a self assessment return at the end of each year, I do not have a Ltd Company. Since going SE in 2008 I have done small jobs for local small businesses mostly working from home.

I have worked in Accounting since 1989 and would be what one would call QBE but I would always work alongside an Accountant with either the Accountant of the firm I am working for OR my own Accountant who is there for financial support and advice,

I am not a member of any Accounting body but to my knowledge I do not need to be and have always been clear about that when taking on any new work. I do mostly lower level stuff such as processing invoices and bank recs that sort of thing. I do not offer payroll services and do not give Tax advice.

In the interview we didn't agree any terms re invoicing, he just said he would like to me start immediately and that he would try and accommodate the hourly rate I asked for which was £20 however he backtracked when I first invoiced at that rate and said he would pay me £18 ph for the first month and then reassess the situation which never happened.

No hours, or notice period or billing frequency was agreed either as it was more of an informal chat but I left having been offered the position. The last lady who had been there was stealing money form the business so had been sacked and the accounts were in a mess. I have spent nearly 2 months re-inputting all the invoices and bank into Xero from the beginning of Jan 2017 as last years accounts were on Sage line 100 a DOS version.

The testing equipment was owned personally by the previous owner but as it was taken with lots of other items the bailiff refuse to split the seize, but this is all being dealt with by the company solicitors.

I know there are no orders as I also help out on the sales ordering system and their margins are very small, the new director offers huge discounts and asks all the customers to pay on proforma.

I can see he is doing what he can to help the business, but he recently went to Las Vegas for 10 days to a 5 day conference all on company expenses which would have been fine if the business was doing okay, but as we barely do any business in the US it felt a little indulgent when the staff were not getting paid.

Perhaps I am being a little hasty in thinking of leaving I am generally one for loyalty but something about this situation is not sitting right with me.

I have been trying to help them save money by looking at all expenditure and working out what is needed and what is not, renegotiating contracts with suppliers etc

Hi Sarah

When he backtracked on the first invoice rate, what happened re the conversation you had with him? How long have you worked for this new chap?

Have you had a full and frank discussion with him - ie pinned him down, proper meeting, laid out all the evidence eg shown him exactly on a few invoices what his low margin is and that by discounting them further the exact loss per job, plus factor in the overheads? Overall loss to date/increases is losses over the last few months showing exactly where his issues lie. Plus sitting there whilst he puts the call out to HMRC. Plus telling him that the whole trip to LA is going to his DLA as there was no justification in it. What has been done to recover the money stolen?

I have tried to talk to him but he just says we will chat again another time, he avoids any conversations about money. I have been there less than 2 months and feel i have no power as he will listen to what I suggest re HMRC etc and agree to it, but then does nothing about it, it is incredibly frustrating as I feel powerless to sort things out.

When he said he would pay me £18 an hour I replied by email that I would accept £18ph for the first month and then we would reassess when he came back form Las Vegas and he has as yet to sit down with me to discuss it. As there is virtually no money in the company I felt it would be a fruitless exercise to try and up my rate to £20 so have not pushed the subject.

I am not good with confrontation and feel he knows this and has deliberately avoided all conversations about it.

I invoiced last week for May which was £1500 and asked him if he would pay at least half of my invoice on Friday and he paid me £150.

There is just no money in the bank to pay me or the staff, we have £3500 coming in tomorrow so the staff and I may get paid but this also means the VAT and NI will not, nor will our suppliers and there are no other orders on the sales book to come in or be paid now.

This site reminds me everyday why not to work with small companies...

Im sure you have learnt a lot from taking this one though Sarah. Not a good way to learn such, I know, but certainly take heed of what Shaun suggests for your next role, plus get yourself on the firms own books as an employee when there are clear IR35 issues.

Problem you have now is that effectively you have agreed to a change of contract by accepting the £18, although there might be an argument for him now accepting the revised rate back up to £20 as I am assuming when he part paid it he did not dispute the invoice. But that as Shaun suggests means you would really need to give a months notice. But like I said - you may need to force his hand. Whilst not being confrontational in the past, surely not being paid £1350 would get you that way. Get your list of arguments together and pin him down. As I said, its probably your best get out. Timing is everything. Think I would be feeling a bit sick for a day or three. But certinaly not tomorrow if he is likely to pay a chunk more (tomorrow hopefully). I suspect some of this you will have to take as an expensive lesson, although of course you should still persue any unpaid bills bia the usual processes (its worth a couple of quid for a solicitors letter idc if needs be!)

Is this Chairman a mate of his?

You may need to consider MLR!!