Canada Billing best practices

[Jane Perpick]

We engaged an accountant for our business a few months ago and he provided minor support over the last 2 months. We did not receive an engagement letter or quote for the work, but the tasks he performed were so minor we were expecting to get a bill for a few hours at the most.

He sent through a very high invoice at the end of the two months and said it was for "all of the time spent to date." At this point he provided a quote for the rest of the year, which was ridiculously high based on other quotes we received. I tried to ask him to work with us on his quote as it was so out of line with other quotes. He told me to 'take it or leave it.'

We paid his bill for work done to date and let him know we would be transitioning to a new accountant.

At this point he sent us a second invoice, for half of the amount of the first invoice and said that it was related to his quote for this year, the quote we did not approve. Having just paid a very high invoice for "work done to date" - and based on the fact that no work was done between paying the bill and providing notice that we were moving- we told him we were not willing to pay the second invoice.

He has just sent me an email indicating that he will be throwing out our box of receipts unless he gets payment in 3 business days.

This is not normal behaviour, right? Our new accountant gave us a letter of engagement that clearly outlined his fees and he said he provides a quote before doing anything outside of the agreed upon quote. I feel like our previous accountant is being very unprofessional. I'm not really willing to pay this second invoice, but I also don't want our receipts thrown out in case we ever get audited. I almost feel like we're being blackmailed into paying a surprise penalty fee for leaving him.

I'm not sure if he's a CPA. He doesn't come up in the CPA directory. If he's not a CPA, does this mean we have no course of action other than to pay his surprise 'penalty' fee for leaving him?

 

[Becky]

This is not normal behaviour, right?

Correct. I don't know how things work in Canada (I'm in the UK) but here items such as receipts belong to the client, and if you are fully paid up for work done then your accountant has no justification for retaining them. I would look into which association he belongs to, and seek legal advice.

 

[david ellis]

Correct. I don't know how things work in Canada (I'm in the UK) but here items such as receipts belong to the client, and if you are fully paid up for work done then your accountant has no justification for retaining them. I would look into which association he belongs to, and seek legal advice.

In California just about the fastest way to lose your CPA license is not to give back the client their paperwork......regardless of whether or not you have been paid. I have been a CPA for 30 years, and I have never heard of such billing and collection behavior.