[Opinion] Urgent Advice please!

[Jaded]

I got divorced in 2004 and left as a member of my ex husbands company. My lawyer put me in touch with a rather big accounting firm to guide me through the process of opening my own freelance design business. I knew absolutely nothing on how to go about it and this accounting firm guided me through the process. Registering my CC, showing me what to send to them for my VAT / Provisional Tax and my personal tax. They basically took over everything with the arrangement that I pay R460 a month plus an annual fee for secretarial and accounting. I diligently paid on time - paid whatever they told me in VAT / provisonal and personal taxes.

They called me in last week to their offices as they said they had finished my financials for 2005/2006/2007 and they would like to go through it with me.
In the meeting I got confused by an amount for R5500 in each yearly draft they had put together and when I asked them what these amounts were they looked a little unconfortable and said it was their mistake but I owed them +- R5500 for each of the years amounting to just over R18000.

I told them this was impossiblle because I had never got any invoices with these amounts and I have every single invoice from them filed. Again they said it was a mistake on their part and [quote] "would I think about paying them or HOW much would I think it is fair to pay them"

In the same breath they also let me know that they would no longer be doing my VAT & Taxes as I was too small and they are going to concentrate on bigger companies from now on.

I feel totally blind-sided and I run a very tight budget which is getting increasingly tighter. If they felt they were in the right they surely would have given me the invoices there and then - but surely to ask to be paid for something 3/2 & 1 year ago is unfair - ESPECIALLY as I am so small. At no stage was I consulted on any of these amounts.

I feel they are taking advantage of me as I leave their doors.

What are my rights here? I am not sure how to handle them now - and still need to get my files to pass onto a new accounting person who DOES deal with small business.

Thanks!

[Dave A]

Reading between the lines, it seems 3 years worth of annual statements have only just been prepared in a batch. Is that right?
Also - Have they said exactly what this R5500.00 is for? Preparing the annual statements, perhaps?

[Jaded]

Reading between the lines, it seems 3 years worth of annual statements have only just been prepared in a batch. Is that right?
Also - Have they said exactly what this R5500.00 is for? Preparing the annual statements, perhaps?

Hi Dave,

Yes, they called them 'Financials' that they prepared - when I asked about what the R5500 was for (it went up each year) they said it was to do my personal tax. They never informed me that there was this amount at all or even gave me the choice to say that I would take my personal tax elsewhere, if I was not happy with the amount.

I have just spoken to another person who runs a business who reckons they are relying on my 'good nature/ignorance' on paying the amount after the fact. It is very disturbing and I am quite upset by it all.

Thansk for the reply!

[Dave A]

Your personal tax arrangements will have to be fairly complicated to justify a R5 000.00 bill for preparing them. However, it is not out of line for preparing annual financial statements.

Re-reading your first post, perhaps your core problem may be that the accounting firm is mismatched to the size of your business. The big guys do not handle small accounts very well. You keep sliding down their list of priorities. You might do well to look for a smaller accountant service operation that is better geared to handling smaller clients. I see you are in Jhb - maybe someone here might come up with a referral. *HINT*

It doesn't sit well with me when you are paying a monthly fee and then the annual financials take so long to prepare. And I suspect it is not the amount, but the fact that they are hitting you with three years worth of fees that has them squirming a little.

If they seem open to an offer, make one. And then find someone who will actually place some value on your business to do your accounts.

[IanF]

Jaded
Take this to the CA institute, the website is www.saica.co.za Tell them you the accountants have not acted professionally. They spring on a charge then want to fire you as a client. You must say you don't want to pay more for services for which you feel should have been covered by the monthly charge.
Also state you will be raising this with the various business associations you belong to and you feel that you should be able to walk away from them owing them nothing. They will protect their members until it affects the image but they should try and help.
Then look for a bookkeeping practise in your area which friends or associates reccomend in your area.
Keep us informed and let me know if you need contact details

[Jaded]

Thanks

Ian and Dave

Ian - It has seemed as though I have been passed from one person to another in their firm when I have sent through my VAT documents. So I reckoned I have been sidelined to an extent because I am not a multi million dolllar company.

Dave - I don't feel comfortable in offering them anything for this, except by leaving through the door they have shown me. It is like me doing a brochure booklet for a client - invoicing them and then 3 years down the line I tell them I did not charge them enough for the booklet at the time? I am sure they would laugh at me.

I certainly will be looking for a bookkeeper/accountant in my area (Sandton/Fourways) who is ethical and does not charge the earth. So if there are any good referrals I would welcome them.

Thank you for all your thoughts on this.

[duncan drennan]

Again they said it was a mistake on their part and "would I think about paying them or HOW much would I think it is fair to pay them"

Maybe you should take them up on this offer and let them know that you think it is fair to pay nothing. Ian's advice sounds like quite a good idea - they do seem to be acting very unprofessionally.

[Debbiedle]

Hi Jaded and welcome to the forum.

Based on the information you have provided, I would pay them nothing and change accountants. You paid them a regular fee of R460/month as quoted. Any other work completed, it should have been made quite clear that there is an additional charge and what it would be. I expect transparency from my providers including accountants and lawyers......having said that, I always ask about payment and payment terms in advance as well.

[Jaded]

THANK YOU ALL

Dave, Ian, Duncan & Debbie - really appreciate you taking time to give your thoughts! It has put my mind at rest!

A friend who runs a small design operation more or less on the same basis has given me a good reccommnedation of the firm he has used for the past 5 years and is very happy with. I have spoken to them and will be seeing them on Friday to meet and give them an idea of my business.

Once I have cleared all the loose ends with the other crowd I will hopefully appoint them to deal with everything.

Thanks again!

[Dave A]

At least this time round you'll know all the right questions to ask

School fees! When do they ever end