A logging contractor from South Auckland was referred to us a in July 2022. He had considerable payment arrears for GST and income tax. His accounts were miles behind and the relationship with his families CA was strained.
We engaged. The client was sold a XERO accounting package at $70.00 plus per month. There were issues with the bank feeds…at some considerable cost. The client’s XERO was only good for invoicing and the accountants used their own system. So the client’s software was more or less a blank page!
We immediately noted errors in accounting and GST claims and completely incorrect allocation of personal vs private use of assets. As an example, the client had a number of work Utes (reflected in the depreciation schedule) that reflected different personal usage rates. Further, a large digger/excavator he purchased was also recorded as 25% personal use. This is ridiculous.
The client had never been consulted and barely communicated with the accountants who are a Pukekohe-based Chartered Accountant firm.
Extracting files from them was laborious and a lot of excuses were passed on such as….the girl who does the work has been away for 2 weeks and will not be back for another 2 weeks/Mr XXX will deal with this and so on and so on.
On hand over a trial balance for the 2021 year was sent. However, that was completed to December 2020 only. No balance sheets were issued, and no disclosures were filed for the tax return relative to that.
The accountants were advised that the work was in error and needed to be completely redone. They maintained the work was fine but could not respond to all of our queries. They did however advise that they did not issue balance sheets.
What sort of accountant does not issue balance sheets?
We set the client up with MYOB Essentials with Invoicing and the client saved around $30.00 a month of subscriptions.
The accounts and GST were then needed on an urgent basis for financing for heavy equipment for a large forestry job. Within 4 weeks we had completed the 2018,2019,2020,2021 and 2022 accounts, and tax plus reworked the GST for the erroneous claims.
In addition to these CA’s a new client came to us Sept 22 from a referral. Interestingly they had approached the same Pukekohe accounting firm for help and for lending also and in the words of my client ”were really rude, uninterested and would not attend to our requests”. Naturally, we set them up and did the work promptly.
If you have experienced poor accounting or if this sounds like you give DC a call!