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Nightmare previous accountant

groundygroundy Trusted RegularPosts: 495Registered
in General accounting discussion
I have recently taken on a new client and I could write a book on the errors I have discovered. My problem is the company have a number of vehicles on HP agreements but there is no HP balance in the accounts brought forward. No fixed asset register has been kept and therefore I can only presume the payments have been included on the P&L!

My question is to I try and revise these somehow or to I continue to charge them to the P&L. Just for an added bonus the accounts are due to be filed at Companies House tomorrow and I have only received the finance agreements this afternoon!!!!!!!

AAAAAAAGH, thank God its friday tomorrow.:001_tt2:
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Comments

  • BluewednesdayBluewednesday Font Of All Knowledge Posts: 1,624Registered
    Are they hire purchase or lease hire? Chances are they should be in the balance sheet anyway but if they have taken the legal form of a lease hire it might explain why they have done that???
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  • burgburg Experienced Mentor GloucesterPosts: 1,440Moderator, FMAAT, AAT Licensed Accountant
    If you now have the HP agreements then that is a good start.

    How sure are you that the whole amounts were previously put through the P&L?

    Was HP interest or leases or bank & loan interest particularly high last year versus this (with the correct HP interest)?

    If yes then why not work out what the current balance should be by doing a control account from purchase to year end and then adjust the presumably overstated interest charged to the P&L by crediting the difference back in the current year?
    Regards,

    Burg
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  • NewbieNewbie Well-Known Posts: 229Registered
    Hi I would call the previous accountant to clarify exactly what has been done then you can make an informed decision, works in theory anyway.
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  • groundygroundy Trusted Regular Posts: 495Registered
    Thanks for the replys.

    Blue Wednesday they are definately HP's I have the agreements.

    Burg I am almost certain the repayments must have gone through the P&L as there is no HP interest on last years P&L and no HP balance brought forward even though I have HP agreements from 2&3 years ago!

    Newbie, normally I would call the previous accountant but I have been back to him so many times already you wouldn't believe the problems I have had. One example is that there is a VAT creditor of £70k but the first payment in my year is only £23k, I went back to the accountant for a detailed breakdown of his VAT creditor he explained that the difference was the June quarter and that it must have been paid by the director as HMRC would be kicking off by now. There is no way my client would have paid a £40k VAT bill privately and to suggest that I just credit the directors loan balance was unbelievable. It also took me the best part of a year to get a full reply. The previous accountant is in his 70's and I get the impression he looks after 1/2 people part time, this client got too big which is why they eventually came to us. I had to completely rework the first VAT quarter of my year as I couldnt make any sense of his workings.

    Sorry for the rant people but in 14 years of being an MIP this is by far the worst pass over from a previous accountant I have ever had and I am still unsure what to do about these HP accounts
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  • DeanDean Experienced Mentor DevonPosts: 646Registered
    What do the tax comps suggest has happened? Is there a large pooled balance?

    If its not totally clear you might have to ring the previous agent again - unfortunately you haven't got a crystal ball!

    Regards

    Dean
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  • groundygroundy Trusted Regular Posts: 495Registered
    Cheers Dean. There are substantial additions to motor vehicles on last years balance sheet and tax comp but no liability. My initial thought is that the directors loan has been credited with the purchase price and debited with repayments as there are no substantial hire costs on P&L and motor expenses appear in line with my figures for the current year. I have no idea why they would do this. I have emailed the previous accountant but doubt I will get a reply today. Judgement call needed I think for Co House with a possible revision once finalised for HMRC!
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  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    groundy wrote: »
    Judgement call needed I think for Co House with a possible revision once finalised for HMRC!

    Sounds wise to me.
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  • stevo5678stevo5678 Well-Known Cheltenham Posts: 326Registered
    Definitely need to adjust for last years accounts. Sounds like they were almost certainly credited to the DLA hence the additions. I would reverse that entry and put the balances as you expected them to be (based on the HP agreements you have) to the HP liability a/c (IE DR DLA CR HP).

    You can show the adjustment as a 'previous year adjustment'. Your problem is obviously the timing.

    You can only work with the information you have and this would result in the correct B/S position at YE. You would obviously need to a/c for the HP interest that should of been provided LY.

    Have you considered that the previous accountant was not actually given all the information himself? May explain the situation.
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