ChatterBank34 mins ago
Accountants - Bad Advice
2 Answers
Last year we changed our accountants as the company I work for was beginning to grow rapidly and the old accountants could not cope with our size.
We regularly had meetings to discuss our progress on which the new accountants were stating that we were running at approx �400k profit. As a result and on their advice we placed �150k into a pension fund before the year end. However, when the new accountants came to finalise our figures for the year they realised they had made a huge mistake and hadn't checked the old accountants figures correctly and having finalised our figures it came to light that we had in fact only made an �8k profit (a slight difference to �400k!)
As a result our cash flow situation has become extremely strained to the point where the company is really struggling to survive. We have enquired whether there is any way we can get the money back from the pension fund but apparantly this is a no go as amongst other disadvantages we would also suffer large penalties.
My main question is do we have any come back to the accountants for providing us with such bad advice? They have offered to provide us with a free meeting every month to discuss the direction of the company and the monthly figures.
Any views greatly appreciated. Thanks
We regularly had meetings to discuss our progress on which the new accountants were stating that we were running at approx �400k profit. As a result and on their advice we placed �150k into a pension fund before the year end. However, when the new accountants came to finalise our figures for the year they realised they had made a huge mistake and hadn't checked the old accountants figures correctly and having finalised our figures it came to light that we had in fact only made an �8k profit (a slight difference to �400k!)
As a result our cash flow situation has become extremely strained to the point where the company is really struggling to survive. We have enquired whether there is any way we can get the money back from the pension fund but apparantly this is a no go as amongst other disadvantages we would also suffer large penalties.
My main question is do we have any come back to the accountants for providing us with such bad advice? They have offered to provide us with a free meeting every month to discuss the direction of the company and the monthly figures.
Any views greatly appreciated. Thanks
Answers
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I had the same teribly bad advice from an accountant on the last four months but, thankfully, I took a guage from my cashflow and average bank balance before taking their word for it and re-investing my liquid assets.
The accountants are sounding as though they are a bit concerned about this, hence the offer of help. Maybe worth taking a bit of legal advice to see if you have any case. However, any legal case would drag on, be costly and have no guarantee of recovery.
Whatever costs estimate a lawyer gives you... triple it!
If your cash flow is now as fragile as you indicate, legal action could be terminal, unless you can raise money elsewhere to support the business in the meantime.
If you feel as though you have a worthwhile business, it may be wise to do that anyway. Liquidity is essential during an uncertain economy period.
Good luck
.
The accountants are sounding as though they are a bit concerned about this, hence the offer of help. Maybe worth taking a bit of legal advice to see if you have any case. However, any legal case would drag on, be costly and have no guarantee of recovery.
Whatever costs estimate a lawyer gives you... triple it!
If your cash flow is now as fragile as you indicate, legal action could be terminal, unless you can raise money elsewhere to support the business in the meantime.
If you feel as though you have a worthwhile business, it may be wise to do that anyway. Liquidity is essential during an uncertain economy period.
Good luck
.
-- answer removed --
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