Is this how accountancy usually is?

taibhse

Ok, I'm not sure where else I can get some info so any help would be greatly appreciated.

I opened a business a couple of years ago and last year was my first time using an accountant to do the tax return and end of year accounts. It was close to the deadline for tax returns, but after going in to meet with them they said that was no problem and they were happy to take on my business.

It was after the contracts were signed that they said they didn't have time to go through my accounts, I would have to do them myself. So I used accounting software, did the best I could with the accounting and produced an account summary.

It was this that they used to file a tax return, basing it off my numbers and as far as I'm aware they did not take one look at my accounts, only the summary I had provided.

I was charged over 700 euros for this. Is this normally how it works with accountants, I have no idea as I have nothing to base it off. Cheers for any help

.......

Why on earth did you keep them on when they told you that they didnt have time to do the work?

No - you have been scammed.

taibhse

It was close to the deadline and I was panicking that I wouldn't get it in on time. I wouldn't have been able to meet with other accountants in the time I had. This was my mistake and I certainly won't be cutting it close in future

.......

You paid someone over 700 euro to file your tax return - Id be contacting them and telling them you want a refund.

taibhse

The accounts that they produced was just a word document filling in exactly what I had given them in the summary. How do end of year accounts usually work? Sorry for the stupid questions, I just know nothing about accounting! If they refuse to refund is there somewhere to make a complaint to?

SEPT 23 1989

You will make plenty of mistakes in business just learn from them don't worry

Find another accountant a good one

they are worth their weight in gold

I would get your new accountant to review that last return though

And Ask your last one for a breakdown of their invoice for doing fcuk all

taibhse

I'm just taking a look at the invoice - over 400 for the tax return. The end of year accounts that was agreed on - this was changed to an income and expenditure account for the year. The charge for this was over 200. This was the word document with almost a copy and paste of the summary I had given them.

mickdw

It appears the service they provided is the same as what I pay 99 quid to an online company for. Basically populating the tax return form with correct inputs pulled straight from your figures.

taibhse

Yeah I had used that service myself the year before - didn't want to risk making any mistakes then the following year and thought I'd pay an accountant - ended up doing it myself and being charged for the priviledge it seems like

RoamingDoc

OP, just do this:

SEPT 23 1989 wrote: »

• Find another accountant a good one
  
• Get your new accountant to review that last return
  
• Ask your last one for a breakdown of their invoice for doing fcuk all

And get a refund off the last one.
That's not how working with an accountant is supposed to be at all.

Jim2007

taibhse wrote: »

It was after the contracts were signed that they said they didn't have time to go through my accounts, I would have to do them myself.

I assume you are referring to what we call a letter of engagement, it would normally set out what services would be provided and usually how fees would be calculated.

So what exactly did it say? Did the accountant agree in writing to prepare your accounts or not?

v638sg7k1a92bx

....... wrote: »

You paid someone over 700 euro to file your tax return - Id be contacting them and telling them you want a refund.

€700 works out at €1.90 per day over the course of a year. Why would an accountant do it for any less?

These are exactly the type of clients that accountants would avoid. €700 per year and a litany of never ending questions.

.......

Emerie Many Xerography wrote: »

€700 works out at €1.90 per day over the course of a year. Why would an accountant do it for any less?

These are exactly the type of clients that accountants would avoid. €700 per year and a litany of never ending questions.

Do you understand how filing the tax returns for a small business works?

The business owner provides the accounts and supporting documents. The accountant spends a few days to a couple of weeks (in this case it's a few days based on the fee) going through all this and then files the tax return.

It's not charged on a daily rate of 1.90 by the number of days in the year. It's charged on how much work the accountant has to do. Depending on how well the business owner has maintained records and depending on how complex those records are, a fee is agreed. It's got nothing to do with 700 per year.

v638sg7k1a92bx

....... wrote: »

Do you understand how filing the tax returns for a small business works?

The business owner provides the accounts and supporting documents. The accountant spends a few days to a couple of weeks (in this case it's a few days based on the fee) going through all this and then files the tax return.

It's not charged on a daily rate of 1.90 by the number of days in the year. It's charged on how much work the accountant has to do. Depending on how well the business owner has maintained records and depending on how complex those records are, a fee is agreed. It's got nothing to do with 700 per year.

Family members are accountants and I worked for one of them previously. I would manage his email inbox and the constant emails and calls he would get from clients with the most basic of questions was unbelievable. "I need a letter for the bank, can you sign this letter confirming my salary", "I got this letter from revenue, what does it mean" "can I claim tax back on this" "why do I have to pay preliminary tax"

This was about 3 years ago and maybe things have changed since then but when he would get a new client, we would have to get copies of their ID for money laundering rules and the accountancy body would come out and check his files. I remember him telling me that it wouldn't pay him to take on a new client for less than €900 so even if it was €700 for 2 - 3 days work, that's not bad.You couldn't get a tradesmen to call out to your house for less than €200 these days. So although you pay the accountant once per year, they#re effectively on call the whole year round.

Accountants IMO, are generally very bad business people. I would ask him, why are you doing all this for your clients for free and he said that if he didn't other accountants would. Every time a client needed a loan, they would need accounts, letters, tax returns and a load of paper work and then this would be handed over to a mortgage broker in a nice little bow who would get a commission from the bank!!! So the accountant does all the work and the broker gets paid and then the client is cribbing over a 700 fee. Makes no sense. If you're an accountant and the client needs your signature to get that loan then surely your signature is worth more than €700?

.......

Emerie Many Xerography wrote: »

So although you pay the accountant once per year, they#re effectively on call the whole year round.

This is completely incorrect.

All time is chargeable. If you ask a question you will be charged the minimum unit of payment for it (usually half a day).

There is such a thing as being on retainer, but you pay a yearly fee for that a lot more than 700 euro.

What the OP has described is using an accountant for a few days to do a specified job, not keeping one on retainer..

v638sg7k1a92bx

....... wrote: »

This is completely incorrect.

All time is chargeable. If you ask a question you will be charged the minimum unit of payment for it (usually half a day).

There is such a thing as being on retainer, but you pay a yearly fee for that a lot more than 700 euro.

What the OP has described is using an accountant for a few days to do a specified job, not keeping one on retainer..

Wrong. Most people pay a fixed fee which they think includes all and sundry and then complain if they try to charge more.

The billable hour is as dead as the dodo.

.......

Emerie Many Xerography wrote: »

Wrong. Most people pay a fixed fee which they think includes all and sundry and then complain if they try to charge more.

The billable hour is as dead as the dodo.

Lol, it really isnt

v638sg7k1a92bx

....... wrote: »

Lol, it really isnt

They may keep a record of their hours but nobody bills by the hour.

Just do a cursory Google search and you'll see most practices operate on a fixed fee. Nobody would agree to a fee if you don't know what the cost is gong to be and the accountant is going to bill you by the hour.

Charging by the hour is also bad practice from a business perspective as it limits the amount of profit you can make from each client and means you are dependent on leveraging staff to make money.

Fixed fee packages are much more lucrative from the accountants perspective.

jim o doom

OP - you may not have the time as you are running your own business.. but if you do end up with spare time on your hands, doing a course which would help you file your own returns would be excellent.

Unless you are the type of limited company that needs to file audited accounts, you can just file them yourself.

There is learning and time involved though, so if you are too busy, sorry for the useless suggestion!

.......

Emerie Many Xerography wrote: »

They may keep a record of their hours but nobody bills by the hour.

Just do a cursory Google search and you'll see most practices operate on a fixed fee. Nobody would agree to a fee if you don't know what the cost is gong to be and the accountant is going to bill you by the hour.

Charging by the hour is also bad practice from a business perspective as it limits the amount of profit you can make from each client and means you are dependent on leveraging staff to make money.

Fixed fee packages are much more lucrative from the accountants perspective.

Oh I see, you misunderstood me.

I referred to the smallest unit of time, usually half a day. i.e., if you give someone 10 minutes work or 2 hours work, you will be billed for half a day.

Apologies, I did not mean charging by the hour itself.

Indeed, many will have a full day as the smallest billable unit.

i71jskz5xu42pb

mickdw wrote: »

It appears the service they provided is the same as what I pay 99 quid to an online company for. Basically populating the tax return form with correct inputs pulled straight from your figures.

Can you say who this company is.

Stratvs

To the OP, as you said it was deadline pressure caused this situation so if you can deal with your future returns in good time then go back to that and consider it a lesson learned. But if you plan to continue with an accountant then the ground rules (terms of engagement) must be clearly laid out. Who is responsible for doing what what, when it is to be done by, what is the basis of the fee and when it is to be paid, what rate or basis is used for work outside the normal course or if an "all encompassing" annual fee is to be agreed (yes this is still quite common but would normally set limits on what's included). Don't let your experience colour your perception of all accountants in practice. You were deadline pressured and so were they so they shouldn't have taken it on if they couldn't do what was agreed.

You may find fee approaches differ between practices with principal/partners & staff and the sole practitioner. The "all encompassing" fee still exists among smaller practices dealing with small owner managed clients. It gives a level of fee stability for the client and once they don't abuse the situation also gives them largely unlimited access. Being afraid to ring or call in to ask a question because that might result in an extra bill could result in a bad decision which ultimately leaves the accountant trying to sort out a bigger mess than if they'd taken that phone call or meeting.

As an aside, another poster said that accountants can be bad business people and there's truth in that. In particular in sole practice where one deals directly with the client one on one over many years the work can often drift outside the strict terms of engagement. Phone calls can come with no relevance to the business at all but relate to other matters where the client trusts the accountant's judgement. With longstanding clients there can be the sense that both client and accountant are on a journey together rather than on opposite sides of a desk and the accountant can feel mentally/emotionally invested in the client. The ups and downs of the client's business and life generally can lead to a loss of focus that this client should be first and foremost be profitable to the practice. Being needed is nice, but it doesn't always put a nice Chianti on the table.

Franz Von Peppercorn

Emerie Many Xerography wrote: »

€700 works out at €1.90 per day over the course of a year. Why would an accountant do it for any less?

These are exactly the type of clients that accountants would avoid. €700 per year and a litany of never ending questions.

They didn’t do anything.

v638sg7k1a92bx

Franz Von Peppercorn wrote: »

They didn’t do anything.

Who is "they"?

wally1990

Stratvs wrote: »

To the OP, as you said it was deadline pressure caused this situation so if you can deal with your future returns in good time then go back to that and consider it a lesson learned. But if you plan to continue with an accountant then the ground rules (terms of engagement) must be clearly laid out. Who is responsible for doing what what, when it is to be done by, what is the basis of the fee and when it is to be paid, what rate or basis is used for work outside the normal course or if an "all encompassing" annual fee is to be agreed (yes this is still quite common but would normally set limits on what's included). Don't let your experience colour your perception of all accountants in practice. You were deadline pressured and so were they so they shouldn't have taken it on if they couldn't do what was agreed.

You may find fee approaches differ between practices with principal/partners & staff and the sole practitioner. The "all encompassing" fee still exists among smaller practices dealing with small owner managed clients. It gives a level of fee stability for the client and once they don't abuse the situation also gives them largely unlimited access. Being afraid to ring or call in to ask a question because that might result in an extra bill could result in a bad decision which ultimately leaves the accountant trying to sort out a bigger mess than if they'd taken that phone call or meeting.

As an aside, another poster said that accountants can be bad business people and there's truth in that. In particular in sole practice where one deals directly with the client one on one over many years the work can often drift outside the strict terms of engagement. Phone calls can come with no relevance to the business at all but relate to other matters where the client trusts the accountant's judgement. With longstanding clients there can be the sense that both client and accountant are on a journey together rather than on opposite sides of a desk and the accountant can feel mentally/emotionally invested in the client. The ups and downs of the client's business and life generally can lead to a loss of focus that this client should be first and foremost be profitable to the practice. Being needed is nice, but it doesn't always put a nice Chianti on the table.

I work in an accountants and this brought a situation that happened recently to my mind of ex long term client emailing me their current PAYE payslips regularly and other docs to review 'if I wouldnt mind' (we get no money) and had to put a stop to it

People will take ya for a ride in life

We had a woman the other day moan for 40 mins on a call that we charged for 22 euro 'to put money into her bank' as she called it for her wages , but trying to explain to her that we have to do the book keeping, work expenses review, Invoice creation and issue,
payroll calculation, bank transfer and revenue returns for her wage went over her head plus this 40 min call for 22 quid,

She just saw it as we charged 22 quid from her 550 earnings (which was so tax deductible and we explained that ) to put money In her bank.

I hate these clients but it's not my business so I've to take the brunt of it.

I wouldnt mind at the start of the call initially (as from her perspective she knows no better /besides ignoring the list of service we tell her that's involved) but when she complained and I tried to explain all of the work in the background she wouldn't listen.



By the way I am not saying OP is like this at all, just sharing the story as people running businesses need to be mindful of their time and work involved otherwise you will be taken for a ride by certain clients

Stratvs

wally1990 wrote: »

people running businesses need to be mindful of their time and work involved otherwise you will be taken for a ride by certain clients

I woke to the fact that we were a bit too lenient the day a retired farmer asked me to draw up a lease for long term letting of farmland. I told him that wasn’t something we did but maybe his solicitor or the letting agent would do it. His answer ......”but they’d charge me for it”.

v638sg7k1a92bx

Stratvs wrote: »

I woke to the fact that we were a bit too lenient the day a retired farmer asked me to draw up a lease for long term letting of farmland. I told him that wasn’t something we did but maybe his solicitor or the letting agent would do it. His answer ......”but they’d charge me for it”.

Or the clients who get a revenue audit and assume your work is included in the annual fee.

We should create a separate thread for these stories, lol.

wally1990

Had a client today F**k us out of it(accountants) because be said he should have a invoice paid for his business 3 days ago so he can take a salary but the payment terms are 30 days from issue date of the invoice so still another 2 weeks before due date on payment

We tried to explain that the invoice will be paid to his business but the expected payment date is 2 weeks from now

Think he listen? Nope,

Wanted his couple of thousands now and his company has no profit and the funds in there are for VAT and PAYE,USC,prsi due this month

Tried to explain this and he wants that money now instead as a director Salary

Why the **** is he a director
Some days !!
Ugghhh!

Cant stand some people

v638sg7k1a92bx

wally1990 wrote: »

Had a client today F**k us out of it(accountants) because be said he should have a invoice paid for his business 3 days ago so he can take a salary but the payment terms are 30 days from issue date of the invoice so still another 2 weeks before due date on payment

We tried to explain that the invoice will be paid to his business but the expected payment date is 2 weeks from now

Think he listen? Nope,

Wanted his couple of thousands now and his company has no profit and the funds in there are for VAT and PAYE,USC,prsi due this month

Tried to explain this and he wants that money now instead as a director Salary

Why the **** is he a director
Some days !!
Ugghhh!

Cant stand some people

Are you also the clients customer or did they want you to call the customer to get them to pay the invoice?

wally1990

Emerie Many Xerography wrote: »

Are you also the clients customer or did they want you to call the customer to get them to pay the invoice?

We are the accountants/agents but his customer has 30 day payment terms which my client has signed a contract with too. He just doesn't care

Had another client ring me today and say she was considering taking cash in hand work and not declaring it.

I was dumbfounded on the phone

People would make ya laugh

Like ringing a guard and saying I'm off to buy drugs.

StringerBell

OP, your typical engagement letter/agreement will have the terms of what the accountant is going to do for you, scope of services, out of scope service and relevant fee information. Ask them for a refund and get yourself some proper representation. If you can make a big effort to get out ahead of things early in the FY it will save you time, hassle and money in the long run.