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  • Jul 22nd, 2016 12:11 pm
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[OP]
Sr. Member
Oct 23, 2010
600 posts
69 upvotes

Corp Accountant Dispute

Hello all,

I've got a problem with my accountant that I recently used to file my corporation's tax for the first time. The dispute is about their fees, I was verbally quoted an amount, this quote was given to me after I had provided all the details about my corporation including all bank statements and other papers. After filing the taxes the accountant sent me an invoice that was much higher than what was originally quoted (3x more). When asked why, he stated that this is the price due to the amount of hours spent on all the paperwork and this is the new fee I must pay. Up hauled by this, I told him that I would not pay this and that I would only pay the originally agreed upon fee. He stated that he'd send it to collections if I don't pay the full amount he's asking for. 2 weeks later, he sent me a second invoice that included some interest and an administrative fee, which increased the total amount owing to him by another $900. I contacted him again and told him that this new invoice is bogus and again requested to clear this up by accepting the original fee. He then told me if I don't pay in 2 weeks he is going to send it off to collections. Fast forward to Monday of this week, I received a notice from a collections agency requesting the total amount from the two invoices this accountant sent me, debtor is my corporation.

Some further facts:
-There is no contract between the accountant and my corporation or myself stating this accountant would get paid an X amount. There is no paper trail stating that my corporation or myself have agreed to any value for the accountant's fees.
-Accountant was given "representative" authorization to the Corporation's CRA account


I wanted to know how I should go about this? It looks like the accountant can make up any fee in the invoice and send it off to collections? How can I dispute this debt? Does an accountant have grounds to send this unpaid amount to collections? How can a collections agency accept this debt without verifying if there was a contract between the accountant and corporation? Clearly the accountant lied to me about what he would charge and the amount of paperwork involved was minimal. I consulted with two other accountants who I was referred to by friends and after giving them all the details and papers they told me that this accountant is trying to charge me a ridiculous amount of money for the work involved.

I have learned my lesson, obviously I will not be using this accountant in the future. When hiring a new accountant I'll get everything in writing pertaining to the work they would be performing and their fees. Any help with this would be highly appreciated.
22 replies
Deal Addict
Dec 10, 2012
3280 posts
664 upvotes
Canada
real professionals charge by the hours only.
Deal Guru
User avatar
Mar 9, 2007
10181 posts
4797 upvotes
Toronto
Sounds like this accountant took advantage of your companies earnings.

WOULD SOMEBODY THINK OF THE CHILDREN!!!
[OP]
Sr. Member
Oct 23, 2010
600 posts
69 upvotes
badsha wrote:
Jul 7th, 2016 4:42 pm
real professionals charge by the hours only.
I understand. However, I was not quoted an hourly rate verbally nor in writing. I will pay the future accountant on an hourly basis.

Any idea how to tackle this issue at hand?
Deal Fanatic
User avatar
Mar 23, 2008
7970 posts
4715 upvotes
Edmonton
Some semi-random thoughts...

Accountants are part of a professional association, are they not? Consider contacting them, and seeing what they recommend.
Do you have a lawyer available? Consider asking them what they'd recommend. You might be covered by a cheque for the original amount and a letter stating something like "Acceptance of this payment indicates that my account with you is paid off in full, based on the initially agreed upon price of $xxxx.xx on xx/xx/xxxx"
Write the collection agency, and state that you deny this debt. Look into the Personal Finance thread on dealing with collection agents. Not sure if its the same for corporations, though. Basically, tell them to leave you alone until they prove that you owe them any money.

Make sure they're taken off as "representative" of your company with the CRA.

C
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Mar 23, 2008
7970 posts
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Edmonton
And only paying by the hour doesn't protect you, in the future. If you give the next accountant your paperwork for your corporate taxes next year and ask them to bill hourly, they're free to run up the bill as much as their ethics will allow. What you need to do is get more communication in WRITING. It will protect both you AND the accountant.

C
[OP]
Sr. Member
Oct 23, 2010
600 posts
69 upvotes
CNeufeld wrote:
Jul 7th, 2016 5:49 pm
Some semi-random thoughts...

Accountants are part of a professional association, are they not? Consider contacting them, and seeing what they recommend.
Do you have a lawyer available? Consider asking them what they'd recommend. You might be covered by a cheque for the original amount and a letter stating something like "Acceptance of this payment indicates that my account with you is paid off in full, based on the initially agreed upon price of $xxxx.xx on xx/xx/xxxx"
Write the collection agency, and state that you deny this debt. Look into the Personal Finance thread on dealing with collection agents. Not sure if its the same for corporations, though. Basically, tell them to leave you alone until they prove that you owe them any money.

Make sure they're taken off as "representative" of your company with the CRA.

C

Thanks for the help. I've already removed their representative access tour my CRA account. I am also trying to find out if this accountant is a CPA member(not sure if there are any other professional associations). I'll be heading to a referred lawyer tomorrow to discuss these details.

Thanks for the recommendation for future accountant dealings as well.
Deal Fanatic
User avatar
Mar 23, 2008
7970 posts
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Edmonton
Find out what the guy's designation is. And check out page 17 of the CGA Code of Ethics:

http://www.cga-canada.org/en-ca/Standar ... ceproc.pdf
R304 Terms of Engagement
A member shall state clearly in writing to a client the nature and scope of services to be rendered under the terms of the engagement.
Deal Addict
User avatar
Nov 27, 2005
1446 posts
341 upvotes
Okay you messed up by not getting a contract of any sort. So did the accountant as well. Legally none of you have a contract with one another. Did you sign anything?

Furthermore collections doesn't work that easily. Have collections write you a letter stating the facts and state that you do not agree with these charges. Typically collections will go back to the accountant and ask to show proof.

I would hold off and see what proof your accountant has of any contract between you and him. Legally the accountant cannot win a case like this.
[OP]
Sr. Member
Oct 23, 2010
600 posts
69 upvotes
djpr wrote:
Jul 7th, 2016 9:09 pm
Okay you messed up by not getting a contract of any sort. So did the accountant as well. Legally none of you have a contract with one another. Did you sign anything?

Furthermore collections doesn't work that easily. Have collections write you a letter stating the facts and state that you do not agree with these charges. Typically collections will go back to the accountant and ask to show proof.

I would hold off and see what proof your accountant has of any contract between you and him. Legally the accountant cannot win a case like this.
No contract whatsoever, only item I've signed was an authorization form giving the accountant representative access to my corp's CRA account. This is why I'm thinking there's no legal proof that I owe him anything at all, which is why it made me curious that a collections agency would accept this case. Thankyou for your help.
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User avatar
Mar 23, 2008
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MicroJimnt wrote:
Jul 8th, 2016 12:06 am
No contract whatsoever, only item I've signed was an authorization form giving the accountant representative access to my corp's CRA account. This is why I'm thinking there's no legal proof that I owe him anything at all, which is why it made me curious that a collections agency would accept this case. Thankyou for your help.
Collection agencies are not typically held in high regard when it comes to ethics and following rules...

C
Member
Jun 25, 2011
333 posts
111 upvotes
Alberta
It seems like some cheap CGA who competes on price rather than quality work or trying to maintain reputation. Generally, accountants do incremental billing and provide rough estimate to prepare corporate tax returns. If your books are messed up and they need to spend more time to clear it up then generally you pay hourly for the service and they tell you before hand the approximate additional hours it will take to do the work.
Deal Guru
Aug 2, 2010
13200 posts
3413 upvotes
Here 'n There
MicroJimnt wrote:
Jul 7th, 2016 3:37 pm
Hello all,

I've got a problem with my accountant that I recently used to file my corporation's tax for the first time. The dispute is about their fees, I was verbally quoted an amount, this quote was given to me after I had provided all the details about my corporation including all bank statements and other papers. After filing the taxes the accountant sent me an invoice that was much higher than what was originally quoted (3x more). When asked why, he stated that this is the price due to the amount of hours spent on all the paperwork and this is the new fee I must pay. Up hauled by this, I told him that I would not pay this and that I would only pay the originally agreed upon fee. He stated that he'd send it to collections if I don't pay the full amount he's asking for. 2 weeks later, he sent me a second invoice that included some interest and an administrative fee, which increased the total amount owing to him by another $900. I contacted him again and told him that this new invoice is bogus and again requested to clear this up by accepting the original fee. He then told me if I don't pay in 2 weeks he is going to send it off to collections. Fast forward to Monday of this week, I received a notice from a collections agency requesting the total amount from the two invoices this accountant sent me, debtor is my corporation.

Some further facts:
-There is no contract between the accountant and my corporation or myself stating this accountant would get paid an X amount. There is no paper trail stating that my corporation or myself have agreed to any value for the accountant's fees.
-Accountant was given "representative" authorization to the Corporation's CRA account


I wanted to know how I should go about this? It looks like the accountant can make up any fee in the invoice and send it off to collections? How can I dispute this debt? Does an accountant have grounds to send this unpaid amount to collections? How can a collections agency accept this debt without verifying if there was a contract between the accountant and corporation? Clearly the accountant lied to me about what he would charge and the amount of paperwork involved was minimal. I consulted with two other accountants who I was referred to by friends and after giving them all the details and papers they told me that this accountant is trying to charge me a ridiculous amount of money for the work involved.

I have learned my lesson, obviously I will not be using this accountant in the future. When hiring a new accountant I'll get everything in writing pertaining to the work they would be performing and their fees. Any help with this would be highly appreciated.
Collections agencies merely collect whatever they are told. They are not 'verification of invoice' services.

The terms of your agreement with the accountant is your word against theirs. The accountant obviously feels it was an estimate whereas you feel it was a firm amount. The accountant should have notified you when they found out the work done to date at their rate was exceeding what you were quoted, but they no doubt felt that it was not a firm quote but more of a guestimate with additional hours being billed at their rate. Did they tell you what their hourly rate was?

Water under the bridge but you should have gotten something in writing. However, even something in writing from a professional generally has the proviso attached that it is merely an estimate and depending on the work required to be performed you will be billed accordingly. You should always confirm the amount in writing back and specify that you must be informed if the work billed is exceeding the amount quoted and they are required to receive authorization from you in writing in order to continue.

What amounts are we talking in terms of number of transactions, company revenue and what the accountant billed? What format was the information in? That info might help us determine how reasonable it was because regardless of whether it was higher than what you were quoted if it was reasonable in the circumstances I would just suck it up and pay and have learned a lesson. What was the accountants professional designation? I'd ask for their time sheet showing what they were working on. It might be best in this situation just to make a settlement for an amount in between what they originally said it would cost and the final bill.
Banned
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May 3, 2009
6148 posts
773 upvotes
albertaguy wrote:
Jul 8th, 2016 1:20 am
It seems like some cheap CGA who competes on price rather than quality work or trying to maintain reputation. Generally, accountants do incremental billing and provide rough estimate to prepare corporate tax returns. If your books are messed up and they need to spend more time to clear it up then generally you pay hourly for the service and they tell you before hand the approximate additional hours it will take to do the work.
Hey CGAs are human(CPA) too...

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