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- Member PM.Dip
- Practice Licence
- 117 posts
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Hi All
Accountancy institutes require their practices to have an agreement in place whereby should the practitioner fall ill for a period or die then the services to the clients will be performed by the another practice in the continuity agreement. It is designed to ensure clients continue receiving the services they need.
Anyone do this?
Any ICB guidelines?
Thanks
Andrew
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Hi Andrew,
As an AAT Member in Practice the named person must be in place as part of the license renewal process each year.
I have not seen any details regarding this on the ICB.
Christopher.
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Hi Guys
Andrew thanks for bringing this up it is an extremely important point.
If it is not within the terms of practice licence I think it should be. Hopefully a member of the advisory council will pick up on this (Ohhhh Geoffrey where art though accounts legal certified legal bookkeeper and member of the advisory council when one needs thee)
In all seriousness I think this is a subject that should be discussed thoroughly and put in place for both the benefit of the members and their clients.
Another area I keep pushing with ICB is the need for peer reveiws ro ensure standards.
Kind regards
Stuart
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I am here and reading even though it is supposed to be a day of rest!
The issue of continuity is interesting. I have taken the view that if I were unable to continue then I would let my clients know and co-operate with a smooth hand over. I do understand that these matters cannot be forecast however.
Members can of course take out their own critical illness cover which would help defray some or all of the sudden costs. The only problem I see in this is that it adds yet another financial burden at a time when life is tough economically and compulsory cover may drive people away.
Having said that it will be on my list to raise at an appropriate time.
Geoff
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Hi Geoff
My thinking was laong the lines of having a recprical arrangment with another local ICB member who could step in the event of help being required even if only required for the short term to cover say if you were not availiable due to an illness or operation.
This way when you were back on your feet you could pick the client back up when your up and on your feet again. I would go so far as the covering bookkeeper would be paid to cover the job so you would loose some or all of your fee income for that period but at least it keeps the client happy and your practice running.
Any other thoughts anyone.
kind regards
Stuart
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- Companion Fellow PM.Dip
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- 1137 posts
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Hi All
I have to agree with Geoff. This is just my thoughts as you know I am always up for a good discussion and to listen to other thoughts.
I feel this would be an extra burdon. With most of my clients a bookkeeper could not just walk in . I can only speak for my practice , but someone would have to been along side me for at least 2 or 3 months to even get started. My clients would not be happy
I can speak from experience here, as I was very ill for about 2 years and not walking on and off for a period of time over 2 years. No matter how ill you are it is up to your practice to have the procedures there.
I was able to keep most of my clients and organised for the work to be done by an employee. I could though work from bed at a struggle for 15 min periods. I covered difficult areas that came up and would speak to my clients re areas that the girl who I employed was not able to do or the client did not want to cover with them .
Through no fault of her own , its comes down to clients trust and other reasons like been with you a long time.
I had to let some go which was a big blow at the time, as it was my personnel knowledge they wanted. My health was more important. Some I got back , but for good business reasons some stayed on with their new accountants which I recommended and we still keep in touch.
I am thankfully well again, and appreciated my clients kindness and loyalty at the time. What I am trying to say here is that your clients will decide . You must as a practice look after your clients and as part of a ongoing responsiblity of having a practice you should have a procedures set up for your clients to be able to deal with short term illness.
If it is not short term like in my case. You have to sit and discuss with your client the best way forward for them and deal with as a practice what decisions they make . Market conditions I feel deal with this area .
I really do not feel there needs to be an extra layer, because this should be part of your practice Ethos.
Edited at 09 Oct 2011 06:05 PM GMT
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Hi Sarah
You raise some very good points.
I do agree being a bookkeeper often means you have a very personal relationship with your clients, I think this is going to be an interesting debate hopefully we will see some good ideas that other members have come up with to cover this point.
For you having an employee makes this more a moot point as you have the cover in place already, Howver there are a lot of sole practicioners who have no such cover and hopefully this topic will make them think about how they would best cover meduim to long term illness for their clients.
Best regards
Stuart
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Careful Sarah, I am not used to people agreeing with me, it might make me ill
It is a serious issue though. I have had three operations in the past twelve years of self employment. Fortunately I was not unavailable for more than a couple of days and able to be back in my clients offices within two weeks.
Part of the process being eased was being able to plan ahead as they were not short notice situations. For example I always have a copy of client data so I can answer questions relatively easily at any time anyway. Of course there are illnesses which do not give any notice and that can cause problems if there is not a contingency plan in place.
It will take time for anyone to build up a trusting relationship with someone else locally which in itself could cause a problem. You may get on very well with them but would you know (or even how would you know) that their work is up to your own standard?
It is of course always important not to take on more work than you can handle at any stage in any event and keeping that in focus will minimise problems in the event of illness - and may indeed help your health by reduction of stress (although that is easier said than done). I have recently had to fill in some forms for employment (to run alongside my self employment) and have been asked on each about my sickness record - I have answered on each one "illness is not an option when you are self employed"!!!
Geoff
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- Companion Fellow PM.Dip
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Hi All
It is an interesting topic.
I had to put the employee in to cover this as I was solo at the time because I had to let employees go 6 months prior to that because of illness and not been able to be around enough for them.
I had to take a major hit in loss of earnings. I feel it is just business and that is the way business is . As Geoff mention when your self employed there is no such thing as illness. Most businesses are struggling at the moment . I did as much as I could so I did not lose my practice which I had set up 6 years prior to been ill.
My point about markets sorting out is based on the theory that if a client wants to have a big pool of accountants or bookkeepers at the ready incase someone is ill or short tem sick then they pay the considerable extra cost for having a larger practice. Most clients are not willing to pay this extra cost and therefore as Geoff says it becomes another financial burdon as you would now need to train another bookkeeper to the level your customer would like.
I had to this and I had to take the hit whilst doing so. You cannot expect the client to pay your practices full rate while you are training that person. Some clients were nice about it but not all, at the end of the day they are paying your practice an agreed rate for Services to be provided and not for training on their time. The training would have to be on your practices time and taken as unbillable admin time.
I do feel regardless if you are a soletrader, you should have procedures set up at your clients so they can deal with a short term illness. Most of my clients would not be willing to pay the full rate for a different bookkeeper.
I am afraid if you are long term ill, then your practice will have to what is best for the client . There is no reason why you cannot recommend a good ICB bookkeeper. If you our long term ill then it is up to the client , because he or she is then paying for you to catch up and get back up to speed again especially if you are out of the loop for over 3 months.
Geoff also has raised a good point about the amount of work you take on, and also you have no way of knowing how good someones work is and do they have enough knowledge for that business.
Edited at 09 Oct 2011 08:35 PM GMT
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- Member PM.Dip
- Practice Licence
- 481 posts
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Isn't one of the questions on whether you are an employee or self-employed that you could send someone else in to do the job. If the client insists on it being the one person (you) could that not then point to employment rather than self employment?
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No, we are talking clients in the plural so IR35 does not apply.
I have X clients and I am the only person looking after the accounts, that does not make me employed.
Geoff
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- Member PM.Dip
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Geoffsaid:
“No, we are talking clients in the plural so IR35 does not apply.
I have X clients and I am the only person looking after the accounts, that does not make me employed.
Geoff ”
I'm not talking about IR35 - if you work x days a week for the same client and the client says you can't send a replacement it has to be you that does the work - could HMRC not argue that this is employment with that particular client? I know there are other questions to be answered - just adding something to the debate. Whether the addition is relevent or not is still to be decided.
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- Companion Fellow PM.Dip
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Hi Peasie
Yes you do need to careful and you have raised a valid point. When a client chooses your practice they are choosing your business and services you have agreed to provide and that well mean and include your knowledge. It is the same as any business pitching for a client.
If for example like myself at that time. I could not provide anyone with the same level of skill and knowledge that I had promised to supply the client in first place , then the client has a right to say they no longer which to pay for that service.
The person you send must be to the exact level you agreed with the client. The client can claim they are receiving a reduced service and therefore the rates and your letter of engagement would need to change. Or they can simple say your practice is no longer able to provide the service agreed unless you can clearly demonstrate this is not the case. Then the rules of been an employee would come into play.
A client has the right to refuse under Scottish Business Law if the service is not like for like. I am aware the law maybe different in England and Wales.
Edited at 09 Oct 2011 08:28 PM GMT
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Hi Peasie
In fairness I do not see an issue in that at all with regards to your HMRC status when refrring to the continuity of your practice.
We are simply trying to debate should the ICB like the other professional accounting bodies insist we a practive licence holders have a contingency in place to ensure our clients are covered in the short term should somthing nasty befall us.
I agree with what people have said that the clients trade with us because of the personal relationship however what if you get run over by a bus and that client needs support immediatley even if they use that time to source an alternative bookkeeper.
FYI if you have several clients then the test you describe below is not really that relevant it would only really come into play when trying to determine whether you fall in the scope of IR35 if you trade thorugh a limited company or if you should be classed as an employee if a sole trader.
Kind regards
Stuart
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- Companion Fellow PM.Dip
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Hi Stuart
Some comment here are in Jest, but I have had many a conversation with my clients regarding this issue in relation to my own practice.
If a client requires that facility immediately, we would need to double our rates. I have spoken to a couple of my clients this morning out of interest about this.
And they have all said they would not pay for a different bookkeeper who they did not already know or who had not been introduced prior to their business . There is no way you could confirm a practice or individual as they will not sit around and wait as they need to run their own practice. They have all said they would rather wait. If it was long term (or you were flatten by the bus) they would review the situation with their bookkeeper and would decide they as a client want to do and very quickly.
Stuart I still feel if a company wants this then they need to pay the same fees they would pay to large bookkeeping or accountancy firm. This is why business pick sole traders to reduce their costs.
I completly understand there is a need for the ICB to be professional but as a good bookkeeper procedures should already be set up so your client could manage if you were run over by a bus. I guess you would be dead so they would just go ahead a get a new bookkeeper or continue with your firm if you have employees.
The feedback I received is that they would need to know this bookkeeper prior to them having access to their books or they would have to be an employee of the practice. So if I had passed away , then this whole process would be need to be done anyway.
Another point is if work was passed to other ICB members after your death , you family might have difficulty getting it back. This could be your part of childrens are families inheritance as hopefully they could sell your business our a block of fees.
How would this work , would the people you list to take on the work have to pay a percentage to your family and for how long or would the client have to be valued prior to your death so your family knew how much to sell the clients fees for.
This may sound greedy but my kids and family would be my first worry that they were look after.
Edited at 10 Oct 2011 01:52 PM GMT
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Intuitively I think it's a good idea to have a continuity of service agreement between practices. But I don't believe it's really possible until we have a consistency of service offered by members. One area I think the ICB could be stronger on is the advice it offers in terms of practice management,client files, expected working papers, notes etc.
I can see the argument in favour of Stuarts idea of peer reviews and how that would help. But I have a genuine question about this - what would the peer be reviewing? If that sounds glib, it's not meant that way. Sarah often posts about the procedures of a "good bookkeeper" but I don't know what that means? Again, that isn't meant disrespectfully.
I appreciate that bookkeepers aren't accountants and that perhaps it's another level of compliance that we don't need (as Geoff said things are hard enough), but perhaps areas like those being discussed are part of how the ICB continues to promote the reputation of itself and it's members.
Edited at 10 Oct 2011 05:52 PM GMT
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- Companion Fellow PM.Dip
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Hi Tony
This is what I am refering to when I mean been a good bookkeeper .
Your client may not like to do the work but they may also not want to pay for someone who does not know their business when they feel they could manage short term.
Your systems set up for clients should be understood mainly by your clients and employees. A bookkeeper coming in fresh will not know anything about that business the history of their customers or suppliers. Potientally eveytime they have to ask a question, they would be annoying your client whilst the client maybe trying to complete important deadlines.
If they are not willing to pay the prices of a large firm of bookkeepers or accountants then it is up to us to guide and give our client the knowledge how to do certain things in the case of emergency or when a sole trader goes on holiday.
I have a manual set up and procedures that my clients could follow if I was ill short term our if my employees where else where and could not get to that client.
Tony in relation to having uniformed notes . This would be impossible not one of my clients run the same bookkeeping systems as every company required different systems to suit their needs and employees. You can have the best system in the world but if your clients does not like it . It will not work for them in the long run.
I am not suggesting for a second this would last long term but it would get my clients by for a few weeks or least a month untill they found a newbookkeeper if I turned out to be long term ill.
This is entirely a decision that should be taken by each individual practice as some may totally disagree with my approach .
I personally do not have a problem showing at least two members of staff how I am doing things.
Having been long term ill for a while it stood me in good faith, and the clients felt at ease. The one area I could not cover is my experience and knowledge if different areas that came up and you cannot write a manual for every secarnio . Hence the client may feel if you are long term ill. They would prefer to go to another practice for a companies or indivuals knowledge.
I hope this helps
Edited at 10 Oct 2011 07:45 PM GMT
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sarahsaid:
“Hi Tony
If they are not willing to pay the prices of a large firm of bookkeepers or accountants then it is up to us to guide and give our client the knowledge how to do certain things in the case of emergency or when a sole trader goes on holiday.
Hi Sarah,
Thanks for replying, the above is food for thought. It's some thing I hadn't really thought of. Most of my clients give me "a bag of receipts and a bank statement", so I suspect if i was ill the bag would just get larger.
Regarding unifrom notes, I think I explained that badly. As you rightly said every business is clearly different, so that wouldn't work.
I was thinking more in terms of e.g. if you're engaged to prepare vat returns for a client, then in each client file there should be a page detailing, off the top of my head, return periods, scheme used etc. So if circumstances arose where another ICB member had to pick up the client / file they would know where to find the information.
I don't know, I have a habit of typing as I'm thinking - maybe I'm trying to be too prescriptive 
edit: Being ill and having a family is scary enough in itself, it couldn't have been pleasant worrying about your practice as well.
Edited at 10 Oct 2011 08:56 PM GMT
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- Member PM.Dip
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Hi all
Noticed this on our Professional Conduct regs here:
" 29 · A member shall make and keep in place adequate provisions and arrangements for the continuation of his practice and the protection of his clients in the event of his death, illness or incapacity. "
Doesn't give exact details on what 'adequate provisions' are, but at the very least it does suggest something should be done.
It mentions the motivation as well - 'the protection of clients'. Not for our own benefit.
Tbh if the clients are 'bag of receipts' types as Tony mentioned I don't think it is very relevant. But if members are more essential (hard to replace) or even preparing tax returns and CT600s then it is more so.
Posters have mentioned the increase in paperwork and regulation that would come with continuity arrangements and my guess is this is the overriding factor as to why the ICB aren't enforcing the above.
Incidentally, having employees to replace you if you are incapacitated won't necessary work as you won't be there to pay them!
Regards
Andrew
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- Companion Fellow PM.Dip
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Andrewsaid:
Incidentally, having employees to replace you if you are incapacitated won't necessary work as you won't be there to pay them!
Regards
Andrew
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Hi Andrew
I don,t nessarily agree , that if you are incapacitated , you won,t be there to pay them.
When I was incapacitated I orgainised for employees to do the payroll, no employees where left unpaid because I was not around , which was the case.
Your clients still pay you for the work . So therefore you make sure your employees are paid. It makes no difference if you are incapacitad if you employe someone they have legal right to be paid. You pay someone to do your practices admin.
The job centre and Access to work agency had no problem with paying me incapacitated benefit as I was clearly able to show salaries and all business expenses been paid with no profit. Every month the accounts were produced for them and they funded me gradually bank to work though an access to work scheme which I agree to take part in.
There is nothing to stop the sole trader or director taking a reduction in pay in order to pay for employees.
Andrew you do have to look after your client but you have every right to protect the goodwill your practice has made.
The procedures I have set up would see my clients okay for a month , which is more then plenty of time for them to replace me if I am dead. You are not obilged to look after them forever.
Your work should also be of a standard that if you are dead someone could complete a quick return. All returns have a time frame where figures can be changed if notified on the returns .
Edited at 13 Oct 2011 09:21 PM GMT
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- Member PM.Dip
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sarahsaid:
“Andrewsaid:
Incidentally, having employees to replace you if you are incapacitated won't necessary work as you won't be there to pay them!
Regards
Andrew
”
Hi Andrew
I don,t nessarily agree , that if you are incapacitated , you won,t be there to pay them.
Hi Sarah
I guess it depends on the level of incapacitation. If I was unconscious then any employees etc won't be able to be paid (at least not anytime soon) - no one else has access to the bank.
Going back to the ICB and what it should ask of it's practices, you make a good point that if our standard of work is good then in theory someone of equal capability could pick it up and continue. But what if that person was elected beforehand in a continuity arrangement? The agreement would say along the lines that the other practice has to either:
-hand back the client when the incapacitated becomes well enough to work again
-pays for the client's fees
-arranges for the fees to be sold
The terms of which are all previously agreed in the terms of continuity. This would then protect our own interest, as you said.
What do you all think, too impractical? Would the client really play along with these arrangements?
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- Member PM.Dip
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This is a very interesting debate.
I have skill and experience in a particular niche area and have clients that use my services because of that experience. It is unlikely that many other ICB members would have the same skills and knowledge in that particular field (proven fact as one client I picked up was through the ICB website and had had no other interest in his advert!) and even many accountants struggle with it.
I am having a baby in February and am planning on taking minimal maternity leave, however I do not have any contingency in place if for example, and god forbid, I had to stay in hospital or there was a problem with my baby. I guess as others have said that when you're self employed, illness doesn't exist. That is very true for most, but what happens if run over by that figurative old bus?
Definitely something to think about for me - maybe I need to find another Gloucester bookkeeper and train them up myself?
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