UK At what stage the accounting fee should be paid?

[Sam101]

I work with an accountant and for each year’s company accounts (Jan-Dec) he sets up direct debit for the agreed fee to be collected. It is however the following year and at the end of the tax year (i.e. after April) when he starts to do the work. Therefore fees begin to be collected nearly a year and a half before commencement of any work. There is no need for ongoing work during the accounting year and his work is a couple of days of paper work as it concerns a small company with one employee. My former accountant used to collect the fee once the work was done.

Is there a particular protocol for when to settle accounting fees? I can understand a busy restaurant needs a lot of ongoing book keeping but in this instance the work only concerns a single property’s rent and few expense receipts.

Would appreciate any advice.

 

[kirby]

I am in the US but I doubt this is the normal practice in the UK. There is no reason to pay for the services before they are performed. Tell the acct that he/she is to bill you after services are performed. If the acct does not like this, find another acct.

 

[Sam101]

I work with an accountant and for each year’s company accounts (Jan-Dec) he sets up direct debit for the agreed fee to be collected. It is however the following year and at the end of the tax year (i.e. after April) when he starts to do the work. Therefore fees begin to be collected nearly a year and a half before commencement of any work. There is no need for ongoing work during the accounting year and his work is a couple of days of paper work as it concerns a small company with one employee. My former accountant used to collect the fee once the work was done.

Is there a particular protocol for when to settle accounting fees? I can understand a busy restaurant needs a lot of ongoing book keeping but in this instance the work only concerns a single property’s rent and few expense receipts.

Would appreciate any advice.

 

[Sam101]

Thank you so much Kirby,

Dare I say the accounting practices and business etiquette in the UK and US are quite similar. I personally feel quite uncomfortable with this proposition but if there is one person that we don’t want to annoy, it is our accountant.

I appreciate your advice and will follow your suggestion.

 

[Ben5678]

If I was preparing accounts for a new client I would invoice the client once the work is completed and then start the direct debit after so the following years accounts are paid for over the next 12 months.

 

[Sam101]

Thanks for your comment Ben.

Are you required to do continuous work throughout the accounting period? I interpret your comment to mean that you DD your client in the same year as the accounts are due (not a year in advance). My problem is that I am being billed in 2015 for the work which will be carried out after April 2016.

On a completely hypothetical level, say you are a ‘sole practitioner’ and I paid you for 2015 accounts, by April 2016 when my 2015 accounts are due you stop practicing and relocate abroad, what safeguards do I have?

 

[kirby]

Hi Sam101, by your last post I think you are getting the picture. The current setup benefits your accountant and not you. In fact, as you expressed, the money you have prepaid is at risk if your accountant leaves. I cannot see how this works for you. You said above you do not wish to annoy your accountant. But now it is you who should be annoyed. I could understand a prepaid arrangement if: you live in a remote area and there is only one accountant, or the accountant is your Dad, or your business is hugely profitable and missing this cash is no problem. Else why do you take the risk?

 

[Fidget]

How much is the fee? Sounds a bit odd to be paying a fee by advance direct debit for a couple of days work to be done at the year end.

Generally fees are collected after work is done, or maybe also interim fees where work is on-going, which doesn't sound like it in your case. The only plausible reason I can think of for wanting the fee in advance is if the credit rating of the business is a bit dodgy, and even at that, the full payment could be made at the time the work is due to commence rather than by direct debit over the course of the year, unless of course, the company prefers to do it that way.

 

[Sam101]

The proposed fee is about £500 for essentially what is no more than a day of work for an experienced accountant. And there is no problem at all with the credit history.

- Dear Kirby:

You clearly feel as strongly about this as I do !! I am now quite convinced that there is nothing discourteous in asking to settle the fees after the work is complete. Thanks for all your advice.