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Pegs


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Accounts in a mess
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I am hopefully taking over the accounts of a small business, but they are in a bit of a mess. There is limited records of previous transactions, debtors, creditors etc and his previous attempt at keeping records is poor. So need to overhaul his whole system. This is my first proper client and am keen to get it right from the start. Should I go back over the last year or so transactions and try and piece it together from there or is it ok just to start from scratch with the information I do have. There is no bank reconcilations, paper work missing left right and center, he has no stock control, and I doubt he knows where he is at with depreciation etc. He wants me to come in and help him get organised but not quite sure where to start. His year end was August so would it be ok to start from there? Any advice would be greatly appreciated. Would of been nice to start off with a nice easy client but never mind it will be good experience.

Thanks
Peggy



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BackOfficeGroup


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Peggy

One question comes to mind - has he had any accounts drawn up for the last period?

If not, then I would go back to the beginning and do it all properly - if he is going to pay you of course! No point starting to do the work if the client does not understand what it all entails.

P

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Shamus


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Hi Peggy,

nothing like a baptism of fire is there!

You don't say how long the company has been going for? Have all previous accounts been filed? You need to talk with the clients accountant about the state of the companies books.

The client must agree to pay for their accountants time in order to talk to you and it must be the client who makes the appointment and gives their accountant written permission to talk to you.

You need a referal point to start from. The one that you will be able to rebuild if it's missing is the bank history.

For missing bank statements you need your client to write to their bank to get copy statements of all of those that are missing. Printouts from internet banking are not acceptable as the documents that you use will need to be evidenced by the accountant at year end and they will not accept non bank supplied printouts.

Whilst making adjustments for this being your first client try not to get caught up doing these books at the equivalent of 50p an hour as this is likely to take quite some time to resolve.

And don't forget to do you're MLR on the client. Sometimes accounts are in a mess to try and sneak things past us.

Take care and don't be afraid to say no to this one if you think that its too much for a first client.

cheers,

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.
Pegs


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His accounts have been filed in the past (usually late I believe) but none the less it does eventually get done. 08/09 has not been filed yet.

He keeps a vague track of what goes in and out of his bank and invoices etc, but it is more of a list than anything.

I think I will see if I can have a chat with his acountant and see if he can be of more help!

Thats useful to know about the internet banking print offs. Thanks Shaun!



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Shamus


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No probs Peggy.

the regulation relating to this is APB Practice Note 16. It's specifically aimed at auditors but actually sets the general guidance for anyone using bank reports to review an entities financial affairs.

The fact that previous accounts have been accepted should give you a starting point. At worst you shouldn't have to go back any further than the start of the clients previous financial year (2008/09).

Get everything that you can in writing. If anything is not available in writing you write it down and can the client to sign their agreement. (Write it as a letter from the client addressed to yourself).

In this instance you're trying to impress the accountant more than the client as that is likely to be the place that more work comes from.

Good luck Peggy and keep us all in the loop as to how it goes,

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.
stephen72


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Hi Peggy,
Well done on hopefully getting your first client.It can seem daunting at first but when you take your time and work through the mess things do become clearer and when the mess is sorted out it will be much easier.
I was in a similar position with my first client where he turned up with 18 months of receipts in a carrier bag and let me get on with it.It is surprising how much you learn when you are in this kind of situation.
If i were you i would bear in mind the very good point that Shamus made about not charging enough to sort out the mess as this was the mistake i made with my first client as it took a lot longer than i thought to sort out the mess and i should have charged him a lot more than i did .But that is another lesson learned.

Hope everything goes well for you
stephen

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