I have a book-keeping client who still owes me for my May invoice (and now June too). He has just decided he cant afford me - someone has offered to work with him for free! He has promised to pay me but Im worried about getting it, especially as he has said he ''will have to get monies owed to me before I can settle that amount''. Obviously I have to hand over his documents at some point but where do I stand legally - can I withhold handover until my invoice has been paid in full? Do I have to give him any of my calculations/Sage printouts etc.
What redress do I have if he doesnt pay in a reasonable amount of time?
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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
He's unlikely to be able to get his bookkeeping done for free forever. It might be worth keeping his friendship for when the new bookkeeper starts charging or walks away ... assuming you will still trust him when that happens!
However, you are entitled to be paid for the work you have done, and your client admits this. You should point out that you are holding documents belonging to him which could affect the ability of the new bookkeeper to prepare the books, and that you will only hand them over once the debt is paid: this is termed holding a "lien" over the documents and you are perfectly entitled to do this. You also have the option of making a claim in the Small Claims Court, but you must go through the procedure of making a statutory demand first. If that remains unpaid, you can threaten him with bankruptcy/winding-up if the debt is more than £750. Even if its less than that, you can still charge interest the "statutory rate", and ask the Small Claims Court to award a judgment in your favour ... this will affect his credit rating. And you can charge him a fixed amount for the cost of collecting the debt.
Have a look at this: https://www.gov.uk/late-commercial-payments-interest-debt-recovery/when-payment-becomes-late
You might also want to look at -
https://www.gov.uk/statutory-demands
https://www.gov.uk/make-court-claim-for-money
Hope this helps, and, more importantly, hope you get paid.
if they are a limited company you cannot keep their books and records as the companies act requires them to be available for viewing at the registered office.
For sole traders and partnerships you can use legal right of lien to retain custody of the documentation until payment is received.
The handover documents that belong to the client are their accounts, the trial balance upon which those accounts were created, their documentation (invoices, receipts, bank statements, etc).
They have no right to their permanent file and only have the right to Sage data if they owned the software on which it was prepared. Other than that it was just a bit of software that you used to get to a trail balance.
You could of course sell the client the data files or use the data files as leverage for the outstanding debt.
If you know a solicitor it would be a good idea to have a chat with them as if the funds are not forthcoming an official letter is often sufficient to get the money owed without having to actually escalate matters.
For delayed payment you are legally able to charge interest on the outstanding sum.
In the absence of a written agreement affecting late payment a payment is deemed late 60 days after the invoice has been delivered.
The interest rate that you can charge is 8% over base. Current Bank of England interest rate is 0.5% so you can charge interest at 8.5% (you have to calculate the interest on a daily basis.
On top of interest you can also charge a set debt recovery cost.
Up to £1000 its £40.
£1000 to £9999 is £70
£10k and over is £100
Remember that is on top of the interest.
HTH,
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.
we crossed in the post but I think that our posts are complimentary rather than there being any disagreement in there.
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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.
Thank you both for your assistance. I'm aiming to stay friends but will certainly not let him walk all over me when Ive done so much work for him. I will certainly take your comments on board. Can I just clarify one thing with you Shaun - you mention ''the trial balance upon which those accounts were created'' - do you mean the up to date TB? It was a brand new limited company which has only been in existence for a few months so the only TB is the latest one (for which I havent been paid, if that makes sense!)
Interestingly the chap who is doing the books for free wanted his own book-keeper a couple of months ago and has been described by my friend as totally unreliable and dis-organised! Makes two of them haha.
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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
sounds as though you might get this one back after a few months... If you wanted them after this!
All that you can give over is the trial balance for where you are up to which to a new bookkeeper would be a real white elephant as there's no cut off in relation to the underlying documents that you would have with a trial balance related to a period end.
Of course, if the new bookkeeper doesn't know what they are doing that would tie them up in knots.
If I were the new bookkeeper in this situation where the client has only been going for a couple of moths I would actually redo everything from scratch no matter how well done the books were... Of course that shoots you in the foot as far as using the trial balance for leverage goes.
I've been meaning to ask. You didn't used to work for Barclays at Radbroke hall just outside Knutsford did you? (around 2001-4). Probably not you but I've already encountered two people on this site (neither current posters) that I knew from outside it.
kind 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.
I would probably re-key as a new book-keeper too and have had to do that in the past when I got a 'brief' audit from Sage and nothing else. I reckon his new 'book-keeper' will make a real hash of it even with every last bit of paper, but Im leaving him to it. Reckon I would get this one back but he would have to pay me up front for any work. Its a worse let down than when its a complete stranger type client. But hey ho!
I never worked fro Barclays Shaun - but I did 28+ years for NatWest, over half of which was at Corporate in Manchester. Reckon I've become soft since I left otherwise I wouldve seen this one a mile off - I usually have a good nose for non - payers.
Thanks, as ever for all your help on here!!
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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
I disagree with you, Shaun: it was misleading of me not to point out that a lien cannot be held over some (but not all) accounting records belonging to a company.
Joanne - it could be that your client will be in a worse mess after the new bookkeeper has wrought his mischief on the books and you'll be able to charge an extra fee for putting everything right!
Thank you ilsm - Ive had a good look at the links and have my strategy ready for in the event that he doesnt pay. I absolutely agree and if I was a betting person would place a bet that he will get in a mess, because he is already a mess of it all - how anyone can lose 60 receipts in 2months is beyond me, never mind the rest of the carnage when it comes to paperwork. But most definitely billing up front will be the ONLY way to go with this one in future! Thanks for your help - I really appreciate it.
__________________
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
I never worked fro Barclays Shaun - but I did 28+ years for NatWest, over half of which was at Corporate in Manchester.
This professions a real magnet for ex bankers isn't it.
I worked with Natwest (and RBS) a couple of times. I was at the Goodmans Fields site in London working in Payments, Securities and Fraud.
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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.
We like messing with numbers! I used to analyse the Audited and management accounts so its interesting seeing it from a different perspective. Plus (apart from dealing with clients who act like 4 year old acting clients and dont pay) it is MUCH less stressful. Well - most of the time!!
Dont mention the dreaded RBS - I hated having to work for that bunch of muppets when they took over NatWest! Haha. Not heard the name Goodmans Fields mentioned in a looooong time - wonder if we ever spoke! When were you there?
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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
I was at Goodmans working on three different projects from late 2006 through to 2008. Also did an earlier stint in 1998 close to Kings cross (can't for the life of me remember the name of the building). That one though was for a management consultancy working with Natwest rather than direct.
If ever you used currency on demand (pre packed foreign currency) that one was completely my baby which I took from initial feasibility study through to product role out.
That aside I was involved in product development on both corporate and retail sides so had my finger in quite a few pies.
As for the RBS takeover. Goodmans may have been branded RBS but it was NW to the core... Which is probably why they sold the site off for redevelopment.
Did you ever visit Goodmans? Nice building but the site was absolutely infested with mice.
They tried to poison them but I reccon that the little fellas just developed a taste for it.
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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.
Hi Shaun
I took redundancy in late 2007 and sorry no never used your currency on demand basis (though I did work a foreign currency till at a branch in my youth!). Had it been a bit earlier I might have had some involvement with you as in my Corporate days I was often dragged into various project and product developments/pilot testing, in part because I had been around so long and had worked in lots of places (for my sins!), but also probably because Im a bit gobby! Never did make it to Goodmans, although did use the old training suite at Kings Cross - cant recall its name, but yes RBS sold all the best NatWest buildings off including a lot of the silverware too. Made me laugh about the mice. Was recalling paternoster lifts with an old colleague the other day and the fact that one of my pals believed you went upside down in it when it got to the top of the building! You have clearly sampled the charm of the old business, lol. Small world.
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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
The statute of limitations is 7 years so you can go back and charge at least £40 for every invoice that is 1 day or more late. Personally, most people pay on the threat of fees
-- Edited by BruceDenney on Tuesday 9th of July 2013 04:24:37 PM
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Thank you for the info Bruce! He has promised to pay me tomorrow, although I'm not holding my breath and reckon ie he does it will only be one out of the two late invoices. He knows I will hound him until I do get it, complete with expenses and late payment interest and he knows Im not afraid to go into his shop with a big placard saying he hasnt paid his overdue invoices, if I really need to, as that is what I suggested to him a while ago when he had a similar problem!
__________________
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
