# Overcharged by Accountant:Recommend a Solictor to defend court action. Dublin



## nikki79 (8 May 2008)

Hi we have been grossly overcharged by an accountant and we have paid him over and above for his services but refused to pay the two/three additional invoices sent out.  

We have received a court summons and want a good solicitor (preferably in Dublin City Centre/North Dublin) to advise re the case.

Any recommendations?

Thanks


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## mf1 (8 May 2008)

*Re: Recommend a Solictor*

Just to say to you that your perception of being overcharged may or may not be accepted by the Court. Most Courts take the view that a professional should be paid and unless you can clearly show that there was a fee quote, no changes in the spec and then and only then, additional fees raised are you likely to be successful. 

I have often had clients try to "milk" a fixed fee situation - with experience, you get used to the mantra "your fixed fee does not cover additional work".

Also, a good solicitor will charge appropriately and you may find that you would be better off discharging accountants fees now rather than incurring solicitors fees. It depends on the amounts involved and your conviction of being right or wrong.

mf


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## nikki79 (8 May 2008)

*Re: Recommend a Solictor*

Thank mf

We had no previous experience with dealing with accountants and choose one that had been recommended by a friend, we were given a verbal quote of approx €1,500 but in the end we were charged a total of €7,000 ,of which we paid half of that. There was no additional work needed to cause the additional fee. We have rang around approx ten other accountants and have received verbal and written quotes for the exact work done for between €650 - €1,200.  

I know it would be cheaper to pay the fee than to hire a solicitor but it's the principle at stake now.  Also we have no idea if we have grounds for a case which is why we're looking for some expert advice.

N


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## mf1 (8 May 2008)

*Re: Recommend a Solictor*

"we were given a verbal quote of approx €1,500 but in the end we were charged a total of €7,000 ,of which we paid half of that. "

Have you asked them to explain the discrepancy? Do they deny the verbal quote? Did you get a written quote? 

mf


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## nikki79 (8 May 2008)

*Re: Recommend a Solictor*

No unfortunatley we never got a written quote, we paid the first two invoices without question it was only when we got the fourth and fifth that we complained and asked them numerous times to give us a detailed breakdown, hoping to see what work was completed, hourly rate etc but we received a very basic reply charging us a standard monthly amount of €242 approx for book keeping (covering 14 months) and further fee's for one Income tax return and bi-monthly VAT returns.  I understand that they use the Sage accounting package to produce everything.

I'm at a loss as to why the fee's are so high and why they differ so much to the other quotes we received, i'd understand if they were company accounts which needed to be audited but they're for a small self contractor.  

????


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## ubiquitous (8 May 2008)

*Re: Recommend a Solictor*

I would recommend that you meet face to face with the accountant(s) in order to find out whether their fees are justified by the amount of work they have done, and on that basis whether you should pay them in full, or seek a voluntary writedown of the fee. Going to court, particularly when you are trying to avoid payment of invoices, is likely to end in tears for you, especially if the accountant is confident or cocky enough to pursue the case that far. If you meet with them now, they are more likely to see where you are coming from and you are more likely to see where they are coming from. Maybe then there may be room to negotiate a satisfactory outcome.


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## nikki79 (8 May 2008)

*Re: Recommend a Solictor*

We talked to him directly about the fees and he went as far as giving us a €1,000 'loyalty discount' which we didn't consider resonable, we then wrote to the accountancy body to query whether the fees were reasonable, they contacted him and he agreed to settle if we paid him a further €2,000 which means we would have to pay him €5,000 in total, which to me is still unreasonable.  The amount we have paid is still over double of all the other qoutes we have since received.


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## sam h (8 May 2008)

*Re: Recommend a Solictor*

Book-keeping fees and annual accounting fees are different- did you agree for him to do the book-keeping as I would be very surprised if an accountant would quote €1500 to do monthly books and an annual set of accounts.

Can you detail exactly what you were expecting him to do for his fee?


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## ubiquitous (8 May 2008)

*Re: Recommend a Solictor*



nikki79 said:


> The amount we have paid is still over double of all the other quotes we have since received.


You should ignore the other quotes you have received, as they are meaningless, to all intents and purposes, to this particular scenario. 

If the accountant tried to justify his fees on the basis that some other guy up the road was charging double his rates, you would tell him where to get off and you would be right. 

By focusing on this argument, you run the risk of the accountant claiming (justifiably or otherwise) that there were deficiencies in your books and records that could not have been foreseen in advance by either himself or any other accountant, and on that basis the other firms who have quoted lower figures would have done exactly as he did by charging additional fees on completion for the extra work involved.


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## nikki79 (8 May 2008)

*Re: Recommend a Solictor*

When we went to him we were only looking for him to prepare the VAT returns and the income tax return, (thats probably what was iro of the quote of €1,500) as we were not aware that we needed to keep accounts as a self contractor???  However he provided us with a profit and loss account and balance sheet. There was nothing complicated, normal income & expenditure, vat inputs & outputs and RCT certs.  We sent all receipts etc to him in the post and had one meeting with him all year, nothing too time consuming and no additional work.

I have no knowlegde of this but if he did our accounts and taxes do you agree that €7,000 is a resonable fee???


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## ubiquitous (8 May 2008)

*Re: Recommend a Solictor*

Its impossible to tell whether €7,000 is a reasonable fee without knowing what was involved, and/or how messy or complicated the RCT was - believe me, it can get very messy in particular cases. 

Does the €7,000 include VAT? If it does then the bill is actually in the region of €5,800 net. This would be normally considered expensive for a single year, but if it includes more than 12 months, and it includes accounts preparation, an income tax return (or 2), VAT returns, RCT returns and basic bookkeeping then to be frank it does not sound grossly excessive, particularly if the RCT was messy. Certainly a fee of €1500 for all this work would be regarded as a bit of a joke, unless they were literally working for peanuts.

If his bill is now reduced to €5,000 including VAT (approx €4,100 excl VAT) then it is quite likely that this is a reasonable fee, possibly a bit over the odds but hardly by much.

Have you spoken to your friend who recommended them to you? What do they think?


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## nikki79 (8 May 2008)

*Re: Recommend a Solictor*

I think it was inclusive of VAT and covered a period of 14 months in total. The person who recommended him has since left him and gone somewhere a lot cheaper.


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## mf1 (8 May 2008)

*Re: Recommend a Solictor*

Different people charge different fees for the same work. 

I would be regarded as quite expensive by some of my colleagues but I see no reason to work for less than gives me a decent living. Some of my colleagues are happy to subsidise on some jobs in the hope of getting juicier and more lucrative work down the line. I reckon if people are very price sensitive, that approach does not work. 

In this scenario, it has become clear to you, after the event, that you can get the work done more cheaply but that is not a valid comparison.  I strongly suspect that you will be not win your case and my advice to would be to take Ubiquitous's advice and try and talk this through. I don't believe you are on strong enough ground to deal with a Court case.

mf


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## JJ1982 (8 May 2008)

*Re: Recommend a Solictor*

Hi Nikki79,

I must agree with ubiquitous here in saying that there is no accountant who values their work will do 14 months of bookkeeping, a year of VAT, a set of annual accounts, RCT retunrs and your income tax for €1500. As an accountant myself this would earn a standard fee of 3500 +VAT for us. 

But what is more relevant, i do not think getting a solicitor to fight your corner will be sucessful. 7K is expensive i do agree but seeing as they have reduced it then I suppose you just need to move to an accountant who will work for cheaper for you

Best of luck


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## Black Sheep (8 May 2008)

*Re: Recommend a Solictor*

Some how I get the impression that you are now wondering did you really need the services of a highly skilled Accountant in the first place. 

As this seems to be a small operation perhaps a good book-keeper or Accounting Technician would suffice and the cost would have been less.


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## nikki79 (8 May 2008)

*Re: Recommend a Solictor*

Hindsight is a wonderful thing, thanks for your advice, I have learned a valuable lesson to agree everything in writing. However I do not agree that a 'professional' has the right to overcharge naive customers just because they can, this to me is unprofessional.


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## mf1 (8 May 2008)

"However I do not agree that a 'professional' has the right to overcharge naive customers just because they can, this to me is unprofessional."

I don't think this argument will do you any favours. You're hurting but the range of fees charged by professionals varies a lot. You've learned a valuable lesson - get fee quotes in writing, follow through  and find professionals who will do your work  at the rate you want to pay. 

A valuable lesson I learned early on is find an accountant you're comfortable with, happy with, and whose expertise you are satisfied to rely on and be prepared to pay what it takes. 

mf


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## ubiquitous (8 May 2008)

Advance written quotes are generally pointless in situations such as described by the OP. 

The accountant cannot tell in advance how organised or messy the client's affairs are going to be. 

The client will often have little knowledge of exactly what services they will or will not require from the accountant. They will often be barely aware of what taxes they need to register for. 

There is no way of knowing how Revenue will treat an individual client. For example the processing of a C2 application could in one case be a simple rubber-stamping exercise and in another similar case could be as protracted as a minor Tribunal of Inquiry. Ditto (to a less extent) an application to register for VAT.

There is no way of knowing whether a client is going to be fully compliant in terms of bringing in complete records on time, signing and returning forms on time and paying their liabilities on time. 

If the Collector General and/or Revenue Sheriff get into the habit of routinely pursuing a client for interest or fees on late payments (as happens occasionally), this will cause an exponential increase in the time commitment that the accountant will need to devote to the client's affairs.  

A fixed price quote is useless to the client if it excludes essential services that the client may need urgently at some stage (which presumably in such eventuality could not be performed without a revised quote being agreed) or may never need, if they are lucky. 

Any accountant who would give a fixed price in such circumstances is fooling either themselves or their client, or both.


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## z103 (8 May 2008)

*Re: Recommend a Solictor*



mf1 said:


> Most Courts take the view that a professional should be paid and unless you can clearly show that there was a fee quote, no changes in the spec and then and only then, additional fees raised are you likely to be successful.
> 
> I have often had clients try to "milk" a fixed fee situation - with experience, you get used to the mantra "your fixed fee does not cover additional work".



Interesting. 
For example;
1. Frank quotes €1000 to do some work.
2. Frank suggest doing extra, but do not point out that it will cost extra.
3. They complete the job, and charge €1500.
4. Client only wants to pay €1000 that Frank originally quoted.

How would most courts view that scenario?


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## ubiquitous (9 May 2008)

*Re: Recommend a Solictor*

Or to turn the scenario on its head...

1. Frank quotes €1000 to do accounts for a client for 2007.

2. Frank suggests that it may be necessary to do extra work, and points out that this will carry an extra cost. Client does not commit to paying any extra costs and says they want to stick to  the agreed quote.

3. Frank notices while reconciling his client's 2007 VAT position that the client seems to have overpaid VAT in 2004 and 2005, amounting to €15,000. It will take an enquiry to the Revenue and an examination of  the client's 2004 and 2005 VAT returns to ascertain if this possible overpayment is real.

4. Frank decides that this is outside the scope of the work included in his quote to the client. He does not bring the matter to the client's attention as he is not being paid to advise on VAT. 

5. Frank completes the job, and charges the quoted fee of €1000. The client is happy.

6. Twelve to eighteen months later the client discovers that he has indeed overpaid VAT. At that stage the Revenue will not refund the overpayment due to the "four year rule". The client therefore loses the €15,000 by not claiming on time. The Revenue official who takes the client's call mentions to the client that their accountant should have sorted the error.

7. The client then sues Frank for the €15,000.


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## Brendan Burgess (9 May 2008)

nikki

You got two discounts off the original fee. Nothing in what you say suggests that the fee is outrageous. 

It seems to me that the accountant has bent over backwards to facilitate you. I would guess that the court would take the same view.

If you decide to defend this, it is likely that you will lose and have to pay your own legal costs and his legal costs. That will be around another €2k in total. 

Make sure to get a quote from the solicitor you use beforehand. 

Brendan


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