Bidding on a job

[Skate1968]

I am a CPA and am going to meet with someone to bid on a job. This fellow has an S Corp which has 'dealings' in multiple states. It appears as though he would have employees in multiple states.

Although i've worked in the field I don't have many clients of my own.

What concerns me is the fact that he uses Microsoft Money for his S Corp. And he has payroll which appears to be multistate.

I work out of my apartment and have often had trouble bidding on jobs. It could be that i'll just ask for the same $ that his present accountant is getting. But if not i'd like to have some kind of idea of pricing.


1) How easy is it to do Corporate Accounting on Microsoft Money? (I would of course prefer that he switch to quickbooks)

2) What should i be concerned with when considering the amount of time i'll need to account for payroll?

I'm not sure how to approach this. any advice would be welcome

thanks

[BOB W]

Bidding on a job is one of the worst posistion to be in. You need to have a complete knowledge of what will be required of you, and I mean every detail. Why are they looking for a new accountant? Starting at a fee of the existing accountant can be a good start but you must leave the door open for increases in fees. How many accountants have they had in the past? Multi-states are very time intense. Developing a correct chart of accounts with sub catagories can get involved, is this already setup? Are there separate Corporations for each State?

Since they are using their books, it will require you to do most work at their premises within their office hours. Having a copy of they program would be helpful. What is the knowledge level of in-house bookkeeping staff? If poor, you will be putting out fires all the time.

I could go on but you get the drift..

[Skate1968]

Thanks very much, Bob.

It seems as though i'm going to approach this with the attitude that a mechanic usually doesn't know how much time he's going to need before he has a good look under the hood.


They have had the same accountant for years. It seems as though this accountant might be getting older and slower or maybe just lazy. This potential client does not yet have his 2007 1120 S.

[ChEAr$]

Who does payroll tax reports?

In my practice, I am a "full service" bookkeeper, and in addition to maintaining the "books",
journals, ledgers, etc, I also do all the payroll and sales tax reports.

I ask this question because with multi state employment there are the issues of reporting
in those states, viz. unemployment and state withholding. You just might find out that only
one state is/was being taken care of! (grin)

Remember to remind potential client he will get what he pays for.

[Skate1968]

Hi ChEAr,

Thanks for posting.

His accountant does his payroll tax reports. I know this because this potential client complained of getting fines and interest on his 941s on a somewhat regular basis.

I told him that my 1 semi retired corporate client intentionally overpaid his 941s by a few dollars and always applied the refund to the next quarter. No interest or penalties ever.

As i'm writing this i'm thinking that this potential client has a payroll bigger than the one i'm used to and therefor more stringent 941 deposit requirements. I'm thinking that the payroll that i do is so small that my 941 deposits could be off so long as i had it balance out by the end of the quarter.

[Skate1968]

Remember to remind potential client he will get what he pays for.

Hey ChEAr, thanks for the reminder. After seeing billings and tax returns from clients' prior accountants i can confidently say that i'm not charging enough. So it's time to bid high.

[JohnH]

If he's getting frequent penalties on the 941's, it COULD be that he was a monthly depositer and was switched to being a semi-monthly but neither he nor his accountant picked up on it. Maybe he missed the notice and the accountant wasn't tracking the lookback period. That can generate lots of back-to-back penalty notices if no one picks up on the problem. (voice of experience here)

[Skate1968]

Thanks, JohnH

[Skate1968]

The interstate payroll, by itself is not too too worrysome. And the running of a corporation on personal software might not be too bad either -- by itself. But the combination of the two sounds like it could be very tough to manage.

But maybe he's purchased some of the microsoft money payroll software which could make it more maneageable. We shall see.


(I wish good quickbooks clients would come my way)

[BOB W]

Skate> Be sure to take the time out to read all of the 941 instructions. This client is probably a 3 day depositor per pay period and you should be able to recognize this when reviewing this potential client's records. The more you know the better you will be able to earn your fee if it comes in higher than the current accountant.

You may be able to to have 2 fees. One to fix current problems and another for normal operations.

[JON]

If I understand this

right the payroll in the multi state is handled by the in-house accountant. So except for the competence of the in-house that is the question, and your not auditing the operation.

The big question is if he has a multi-state payroll he has multi-state corporate income tax returns. You have to know what states he has nexus in and those states will require income and sales tax reporting(maybe in-house on sales tax reporting), but that will be you job. Look at prior year returns.

Ask the right questions:

Why do you want to change accountants?
What specific jobs do you want the outside accountant to do? You may have to help him with this, but do not lead him just question him..

You have to get a reasonable feel of what he expects out of you, and how comfortable you will be doing the job.

Good luck.....

[Skate1968]

Thanks to both Jon & BobW. I very much appreciate the feedback.

Bob, at the moment he is his own bookeeping staff.

Jon,
You bring up a very good point about 'nexus.' I have not hear that term in years.

He's considering me because his current accountant doesn't have his 2007 1120 done yet. I convinced him to consider changing accountants.

[BOB W]

How many employees does he have? What kind of business does he have?

You don't have to answer but I'm wondering if maybe he is the problem, wanting to do everything himself. Maybe the accountant is given his records at the end of the year in a mess?

[Skate1968]

BobW,

The first corporate client which i picked up was just that type of mess which you describe. I underbid myself and wound up making minimum wage for a client that would eventually leave me for someone who could help them with their legal problems (two corps that had not filed or paid 941s in three years -- i did not want that job at the time.) So my first experience has left me a little shotgun shy. Hence i don't often aggressively seek clients.


So yes, BobW, i'm also concerned about the shape of thier books. And i'll certainly be looking closely at it before taking it on.

I don't know how many employees this place has. I really know very little about it.

[BOB W]

Just for your info, I try not to quote a fee and if I do I always preface the fact that I work based on Time and Complexity. So any fee I talk about is just an estimate subject to T&C. AND I ALWAYS GET MONEY UP FRONT.