Is our accountant unreasonable or is it us?

mct1

We (husband and I) are on our 3rd accountant: the first was OK but became way too expensive over our 8 years with him; the second was not OK and turned out not to be an accountant after all; and our relationship with our 3rd has just broken down. I apologise for the length of this post, but I need to try and see this in some kind of perspective. Either we are very unlucky, or we have unreasonable expectations and assumptions and are difficult clients. I would appreciate your views on this.

The last guy helped us set up a limited company (for which he was paid) in Jan '09. However:-

1. Despite several phone calls and emails from us, he was too busy to meet us at any time this year until last week to give us draft accounts.

2. He then told us that we'd missed the February deadline for upping our PAYE earnings for 2009. So we opted to pay a lump sum company pension to avoid CT.

3. He emailed us after the meeting to say that he'd been confused and the company pensions deadline was end 2009 rather than Oct 2010. So we had no choice but to pay CT.

4. When we checked our accounts folder we were alarmed to find most of the invoices and receipts missing from the file. He now says that is standard practice to keep them in the office until the accounts are finalised and signed, (but it never was with previous accountants). Is it?

5. We always prepare accounts very fully before handing them over; everything is itemised and totaled meticulously in Excel. Yet he has redone every single calculation and re-entered every single invoice and expense on a separate sheet (including apparently the VAT which my husband sees to and which the accountant is not required to do). Our view is that this is pointless and just adds to costs. Isn't that what's done for an audit?

Anyway our accountant objects to being challenged on these matters and has suggested we look for another accountant. It's a shame because I thought we got on fairly well.

If you think we are being unreasonable, please say so - I'm looking for unbiaised opinions on this, not endorsement. If we are wrong then maybe we should apologise and try to make up. Thanks.

smcgiff

It might be worth clarifying certain matters so people can help.

Did your current accountant enter the transactions into some financial package or did he just use excel also?

I'm wondering if this is a case of getting what you pay for? The first accountant worked out fine, but was too expensive. As it turns out the cheaper current accountant may have cost you a lot more by not advising you better regarding CT and pension contributions.

Going by your story he hasn't acted in a manner that I would be happy with.

mct1

smcgiff wrote: »

Did your current accountant enter the transactions into some financial package or did he just use excel also?

I think he uses a financial package. However, we specifically asked him originally (and again at last week's meeting) if we should change to his system to make matters easier (cheaper) and he said no, what we were doing was fine.

Just to clarify, the 2nd (non-)accountant was cheap. This guy isn't particularly, but we thought he was worth it.

smcgiff

Briefly... It's not unusual for an accountant of a SME to start from scratch if he thinks it would take more time to audit and be comfortable that the accounts are "accurate".

With that said if you are happy that they are prepared correctly and they are then he should only audit them. Again, if there are not too many transactions again it may be quicker for the accountant to prepare from scratch.

mct1

Fair enough. That's useful to know.

What about removing and keeping the invoices from the accounts file? It just seemed so strange because it's never happened before, so we assumed they had been mislaid and demanded their return. If it really is standard accounting practice then he's in the clear on that one.

dbran

Hi

I guess it can be said that not all accountants are the same and you do get what you pay for.

For what it's worth;

1. If you cannot get an adequate response to emails, telephone calls it either means that the accountant is under pressure, or dosen't view your business as important to them.

2. They should know the rules regarding pensions and when they are allowable, this is basic. At the very least they should check the info out before they tell you. Company pensions are allowed on a payments basis only and cant be accrued. The deadline for them would be tied in with the accounts. On the other hand, personal pensions are allowed up to 31 October each year. (I don't understand why a supplementary P35 could not have been filed and the money deemed paid via directors loan?) In any case CT is only 12.5% but income tax, PRSI and income levy can be up to 50%. Guess it depends how much you want the money out!!!!

3. He is not entitled to hold onto your books and records in lieu of fees. This is definately a no-no.

4. Regarding writing up the books and records again, it is hard to comment without knowing more about the case. But on the face of it it does seem to be a duplication of work, especially if there was no material difference in the final result. Pointless rewriting out of stuff is never a requirement even for an audit.

My own opinion is that the accountant has possibly under quoted on the job and in an attempt to keep the costs down, scrimped on the supervision of the junior who was involved in the preparation of the accounts. As a result the job was seriously mismanaged. I suspect that the original invoices have been used in the audit file instead of photocopies. Happens all the time with unsupervised juniors

I dont think there has been any serious damage done though that cant be sorted out next year without undue hassle. You can always pay out the salary next year, or if you paid company pension it will be fully allowable next year etc. It is just the additional time and worry that is the problem.

My honest opinion would be to pay him his fee, get back all your stuff and go elsewhere. (Back to the 1st guy?)

Hope this helps


dbran

Simplyjoe

IMHO it is not acceptable that you are unable to contact your accountant. I am an accountant and we operate a system that all calls are answered within 3 hours unless I am in an ongoing meeting. If I am away from the office all calls have to be answered within 24 hours. As a previous poster stated no great harm done, pay him and send him on the high road.

dbran

smcgiff wrote: »

Briefly... It's not unusual for an accountant of a SME to start from scratch if he thinks it would take more time to audit and be comfortable that the accounts are "accurate".

With that said if you are happy that they are prepared correctly and they are then he should only audit them. Again, if there are not too many transactions again it may be quicker for the accountant to prepare from scratch.

Hi Smgriff

I most humbly disagree.:). I would always try to work with the stuff given to me even with an SME. It is a very bad policy to disregard work done by a client and start from scratch without going back to the client first.

If it is a load of baloney I would tell the client BEFORE I started to redo it. This way the cost of the additional work can be negotiated there and then or the client can redo the analysis and resubmit it to me. Either way the client should get the choice at all times.

After all they obviously spent the time putting it together in the first place. How can they learn if it is wrong if they are not told why.

Kind Regards


dbran

smcgiff

dbran wrote: »

Hi Smgriff

I most humbly disagree.:)

No need I agree with your two posts.

mct1

dbran wrote: »

3. He is not entitled to hold onto your books and records in lieu of fees. This is definately a no-no.

That didn't actually occur to us. He said the reason was that if we queried anything on the draft accounts he would have all the necessary paperwork there to hand. Is that plausible?

dbran wrote: »

My honest opinion would be to pay him his fee, get back all your stuff and go elsewhere.

If we do that, would the next accountant have to start again from scratch? Because we only have 8 weeks before the annual return date and I know from past experience that it can take months for an accountant to transfer all the necessary information, paperwork etc to the new one. Does this leave us in the mire?

Bazzy

mct1 wrote: »

1. Despite several phone calls and emails from us, he was too busy to meet us at any time this year until last week to give us draft accounts.

Would you still be in business if you treated your customers no matter how big or small like this that's the 1st question you need to ask when your questioning something like this.

The answer will be no and you should vote with your feet and change accountants. I could recommend some but it would be against charter rules!

dbran

Hi Mct1

I don't think it is plausible as he should not need to keep your invoices etc for this reason. If he did a proper file he would have photocopied all the invoices that he needs to deal with any query you may have. What happens if you get a revenue audit in the meantime and he has all your invoices and documents? What if he looses them?

As regards moving I think you will need to let him finish this years accounts, take a view on whether they are right or not, get them filed, pay him and then move on. The new accountant would have to otherwise start from scratch and as the relationship seems to have broken down between you it could become a very long drawn out and costly affair.

Hope this helps

Kind Regards


dbran

mct1

As we already have his draft accounts (which seem fine) is there any reason why we shouldn't file the Annual Return with the CRO ourselves - and pay the CT of course - While we look for another accountant?

I know we need to submit an annual report but I would have thought between us (with a little direction from yourselves possibly) that shouldn't be too hard. The business is very straightforward in every way: just us 2 directors, no other employees. What do you think?

Little Miss Cutie

Just one thought are you sure you need an audit? If you keep the books and records very well yourself could you not prepare the financial statements yourself?

The criteria for requiring an audit (off the top of my head and open to correction) are t/o of €7.3m, less than 50 employees and net assets of €3.65m

There are various other conditions like not being an insurance business and accounts being filed on time.

This may be something to consider for next year.

censuspro

Sounds to me like he puts things on the long finger, I doubt he's holding onto your invoices in lieu of fees.

I mentioned this on another forum before but in 99% of the cases where a client does their own book-keeping they invariably get it wrong. More than likely this is the reason he re enters all the invoices.

Simplyjoe

censuspro wrote: »

I mentioned this on another forum before but in 99% of the cases where a client does their own book-keeping they invariably get it wrong. More than likely this is the reason he re enters all the invoices.

I am an accountant with 25+ years experience. In all that time I would say there were no more than 10 clients whose books were fully correct. Often times it would have cost the clients lots of money if the mistakes had not been corrected. How hard could it be you ask? Obviously very hard according to my experience.

dbran

Simplyjoe wrote: »

I am an accountant with 25+ years experience. In all that time I would say there were no more than 10 clients whose books were fully correct. Often times it would have cost the clients lots of money if the mistakes had not been corrected. How hard could it be you ask? Obviously very hard according to my experience.

Hi Simply Joe

It depends what you mean by fully correct though.

There have been times when I have had to say to the client "Well, you shouldnt have bothered doing up the books if you wernt going to put any effort into it. They are a total mess and I will need to write them up again." Those times mercyfully have been only very few and have been very rare.

Most times however, although the work done was not "fully correct" (in the sense that it would not win awards for bookkeeping), it did help cut down the time I had to spend putting the accounts together.

Proper review of the work done beforehand by the client is part and parcel of providing value for money and ensureing you don't end up sending a bill that the client wont want to pay afterwards.

OK. Thats me off my soap box now


Best Regards

dbran

mct1

Thanks to everyone who kindly replied to my thread - all very helpful in clarifying our present situation and for the future.

On reflection, and taking into account your various comments, I think that the guy probably overstretched himself with too many clients and that we simply fell off his radar. I think he genuinely did his best, but it wasn't up to our standards and we just couldn't trust him any more. The trouble is that then you start doubting and questioning everything they say and do.

So all in all, it feels like it is time to move on since that's what all parties eem to want. Since he does not apparently plan to charge us (much to his credit, I must say) given that we aren't happy with him, we are moving swiftly on to a new accountant. Hopefully we will have a better relationship with them - we will do our best to anyway.

Thanks again.

seco

It looks to me that you have not received good service. I am an accountant and would be prepared to sit down with you, review your concerns and discuss your requirements if you wish.
I will pm my contact details if you wish to contact me.
Regards,
Seco