Why companies hire non accounting staff for their books

Londina

As I'm working in practice, most of the time I find myself dealing with back up data from companies in order to prepare their year end accounts.

Their accounts have been maintened by a bookkepper or "supposed" to be one....

The amount of mistakes that I come across are unbelievable...no payroll journals (so the net wages account have only payments posted), in the credit card accounts only transfer from the bank are posted, VAT control a/c a mess with again payments to HMRC are not always posted, purchase of stationery posted into fixed assets a/c, payment of annual return posted into corporation tax provision a/c...and much more..

It's clear that whoever keep the accounts doesn't know what is doing and have zero knowledge about accounting. Wondering why a person like that is hired in the first place, I give the blame to some directors that thinks "accounts is basic as admin, so it's just a data entry jobs" and therefore they give it to a person who doesn't know anything about double entries?

With so many accountants looking for jobs, why companies don't hire the proper people for the proper job?

ps. sorry if my post contains errors, but my lunch break is running out and need to be back at work.. ;-)

deanshepherd

Cost?

Monsoon

Londina wrote: »

With so many accountants looking for jobs, why companies don't hire the proper people to to the proper job?

Because apparently they'd rather pay us lot to fix all the errors...... :rolleyes:

coojee

Pay peanuts, get monkeys.

Londina

But it should be at the interest of the company, if a bookkeeper doesn't know what is posting, it gives a wrong picture of the company...

blobbyh

Seems to be that for every willing new business person, there's a family member somewhere who offers to "do the books" for them. It's not always confined to small businesses either since there's quite a large hotel in Brighton that continually issues its invoices wrong and which subsequently get rejected by me. Makes me wonder what else they get wrong.

We've had over £100k accrued for an IT supplier who hasn't even bothered to invoice us for over two years. Now things are tight, it's no longer in our interests to let him know. We downloaded his accounts and while it was clear (to us) they're almost certainly fictitious, he's still somehow managing to make a living. Presumably he also doesn't employ a properly trained accounts person to "do his books" - his loss.

PGM

blobbyh wrote: »

Seems to be that for every willing new business person, there's a family member somewhere who offers to "do the books" for them. It's not always confined to small businesses either since there's quite a large hotel in Brighton that continually issues its invoices wrong and which subsequently get rejected by me. Makes me wonder what else they get wrong.

We've had over £100k accrued for an IT supplier who hasn't even bothered to invoice us for over two years. Now things are tight, it's no longer in our interests to let him know. We downloaded his accounts and while it was clear (to us) they're almost certainly fictitious, he's still somehow managing to make a living. Presumably he also doesn't employ a properly trained accounts person to "do his books" - his loss.

Theres a worryingly amount of business people that undervalue the "back office" staff.

They often don't see us as the ones that can contribute to the profitability of the company like the front line staff.

Hopefully we get valued by the right people!

Londina

PGM wrote: »

Theres a worryingly amount of business people that undervalue the "back office" staff.

They often don't see us as the ones that can contribute to the profitability of the company like the front line staff.

Hopefully we get valued by the right people!

Exactly!! and if it's a question of cost, there are so many newly AAT qualified than need a first job, I'm sure most of them would like to work for a lower salary or even for free just to get the experience!

My first accounting job was for 13K per year!Peanuts but since then I didn't have a problem finding another job, I learnt so much and gain lots of experience (and get paid much more :-)))

A-Vic

the fact of business is if a company did keep good books they wouldnt need us we are the last point of call and the ones that sort things out (yes that means the tesco bags and have eaten fuel receipts) but hey it pays the bills

Londina

A-Vic wrote: »

the fact of business is if a company did keep good books they wouldnt need us we are the last point of call and the ones that sort things out (yes that means the tesco bags and have eaten fuel receipts) but hey it pays the bills

Not when your service is only preparing a financial statement, but you ending up dealing with so many adjustments that it would be quicker just to do the whole bookkeeping yourself!!

If a client pays a fixed rate charge of £300 for the preparation of final accounts, you cannot charge them also say £1000 for sorting out their mess...you are going to do lots of unpaid work if they don't sort out their internal staff.

Monsoon

Londina wrote: »

If a client pays a fixed rate charge of £300 for the preparation of final accounts, you cannot charge them also say £1000 for sorting out their mess...you are going to do lots of unpaid work if they don't sort out their internal staff.

Oh yes you can!

The way we work this is we say:
Your fixed fee is £300 and this is based on the bookkeeping being up to the agreed standard. If it's not, we reserve the right to charge for bringing things up to the required standard and will advise you of this in advance of doing the extra work.

So your client would indeed be charged £1300 as per your example, if that's what the right fee for the work was. And they would have agreed to it, and we would take a 50% deposit up front.

Fixed fees are great, but they have to come with a caveat otherwise as you have pointed out, the practice will be making no profit on these jobs.

Monsoon

duplicate post

A-Vic

Londina wrote: »

Not when your service is only preparing a financial statement, but you ending up dealing with so many adjustments that it would be quicker just to do the whole bookkeeping yourself!!

If a client pays a fixed rate charge of £300 for the preparation of final accounts, you cannot charge them also say £1000 for sorting out their mess...you are going to do lots of unpaid work if they don't sort out their internal staff.

This is where the first meeting is important you speak with the client what their expectations are what they need and what they end up with - am sure everyone will agree new clients are the most time consuming (more so when previous accountant give you practaly nothing) this is when you give them the quote for the work to be completed nine time out of ten the client will be happy with the quote.

However once the first work has been done you can then TRAIN the client (yes i said train) the client on what will be needed the next time.

This i have had to do a lot with VAT clients, payroll, accounts prep and statements i have onlt ever done one LTD FS but have produced numerous accounts over a few years for s/t and by year two it is a lot better.