weak vocabulary / missing key phrase (banking)

[stormbind]

This is so embarrassing, but I have been trawling their websites and I cannot find a bank which provides the service I am looking for -- and I do not know where else to post my need for guidance

Non/Late-paying customers are real pain in the backside, not only do they jeapardise my personal finances but their faffing about jeopardises their own projects: Entrepreneurs are such blithering idiots!

Although it seems very rare in other industries, self-respecting solicitor firms require that clients pay (i.e. £600 to £1000) into an account before work begins. The solicitor firm then bills that account every time it spends money (or does work) on behalf of the client. For example, it might be used to pay for the solicitor's time, or for an external barrister, &c. The same concept would work wonders for me, because it would empower me to proceed with work and acquire resources on behalf of a customer without wasting time waiting for them to implement the decisions they already agreed to

There are rules, however, but I am sure the banks would be aware of this. For example, the client's money must remain separate from my own funds, &c.

I do not want to mess around with accounts and figures (and risk screwing it up), so I went looking for a bank which would organise all suggested details for me. The bank should keep the funds in a separate account, keep a tab on each client so that expenditure never exceeds a client's funds, and so forth.

For the life of me, I cannot find a bank which offers these services - but they must exist, because millions of solicitors all over the country operate this way!

Part of the problem might be that I do not know what the service is actually called - and their staff do not seem to know what the definitions for various services are, so it is like two blind people people trying to communicate in different sign languages

I do not want to call their salespeople, because they will be pretty aggressive, so I am tentatively seeking answers online and am getting frustrated. The banks avoid being honest and straight-forward, all they want is my number, and the last thing I want is fifty banks bombarding me with useless sales messages.

Does anyone know of a bank that provides the illusive sought after service, or does anyone even know what it is called?

 

[muppet]

Lawyers and accountants and some other professional service providers obtain a retainer from their clients. In (Canadian) accounting speak, retainers and other customer's deposits are short term liabilities of a similar class though arising from a different nature to accounts payable and generally referred to as, Customer Deposits.

Our company does not use specific banking services to differentiate between the funds of our business operating account and the deposits from our customers. Instead, customer deposits are tracked in our in house accounting system, and the total deposits of all our customers are placed in a single bank account (not our operating account), and held in trust to be applied to future invoices.

 

[YNCS]

You could set up an escrow account to handle prepaid transactions. However, I doubt you'd be able to get the bank to handle the bookkeeping. You should talk to a Chartered Accountant about what you want, because you will need a professional to supervise the account and audit it periodically.

 

[stormbind]

Muppet description sounds very similar (and might be the same) but I am still starting out and cannot afford an in-house accountant

Is there a piece of accounting software that is designed to work with multiple account payable customer deposits thingymowidgets?

There has to be a straight forward approach to this, because I refuse to continue with the slow decision making of customers, which sometimes involves more than one part-time employee leaving notes for each other to get messages passed around, and after a time they forget what it was about and I have to start explaining what is happening again

 

[muppet]

Simply Accounting, MYOB, and Quickbooks are some off the shelf small business accounting packages available at amazon.com, Staples, or Office Depot.

 

[stormbind]

None (that I have seen) provide the required options.

A company called ADERANT provide software tailored to law, accounting and consultant firms but I bet they are not affordable. I have been trawling through the Open Source solutions and trying their online demos, but again these lack the desired features

It looks like I may end up writing the solution myself

The banks should offer it though, because doing yourself creates repetition of effort and wastes time

 

[muppet]

The banks should offer it though, because doing yourself creates repetition of effort and wastes time

If I understand you correctly, this is something you wish to do for the sake of your business. That is, not a requirement of some heavily regulated industry or a special arrangement whereby a professional escrow service is required. Programs such as Simply, MYOB, and Quickbooks, are able to record individual customer prepayments, also called customer advances, or customer deposits.

It might help someone here to help you if you described what is your business! Truthfully, I still don't understand what problem you are having or what peculiar issue of your business is can't be satisfied with an off the shelf small business package, and I am a vp or director of four companies all over the map that routinely take customer prepayments (deposits), contruction, import/export, manufacturing, and a marketing firm.

The simplest, generic, down and dirty, on the cheap solution for small business.. use a spreadsheet.

 

[stormbind]

I am a consultant, but my job requires me to act as a project manager. In a nutshell:

1. Presentation (I do this for free)
2. Analysis & Proposal (I do this for free at the moment, but would rather charge for it)
3. ... Here we follow a project management methodology (where I am compensated)
4. Training (optional, more compensation)

I service smaller Accountant and Law Firms (because that is my comfort zone) and that is how I came to discover that their way of doing business just rocks compared to most industries. Deliverables from me include various customised solutions or hardware infrastructure changes (as spin-off proposals).

I would love to do exactly as they do with retainer/accounts payable thing, because in the analysis/proposal stage they agree to spend $$$$ on a given project, and then they go and forget... so I waste time chasing them for money they already agreed to spend (stupid, isn't it?)

Small businesses are not organised by any stretch of the imagination (they try keeping everything in their heads). Speed of delivery, quality, user satisfaction, my time/profits and their time/profits would all be dramatically improved if I had the power to spend the money they already agreed to spend. It would be even better if they just trusted me to act on their behalf (esp. since they don't have a clue what I am doing anyway).

So that is why the deposit/payable account idea (which they use to run their businesses) would work miracles for me, but I do not want to screw it up - I am not a lawyer or accountant!

Incidentally, the firms which specialise in providing those very tools target them at: accountants, solicitors and consultants (just those three, but big firms - I am still little). So it seems I am not the first to have noticed the need for adopting the method

 

[YNCS]

I am an MBA accountant. I know what type of escrow account you want to set up. You can either pay the bank to run it for you or you can run it yourself. Certainly in the U.S. and almost certainly in Britain you have to meet certain legal requirements to establish and maintain an escrow business account. A Chartered Accountant would be able to set up the account for you and to periodically audit it. Otherwise, within a year or two, the Inland Revenue will be writing you letters asking questions that only an accountant could answer. You're going to need an accountant sooner or later, so you'd be better off getting one right in the beginning.

BTW, you don't need an accountant on your payroll. You'll be using a Chartered Accountant the same way you'll be using a solicitor. He'll only be doing an hour or two of work per quarter, so his fees will not be outrageous.

 

[stormbind]

Okay, thanks guys

Now that I know what to ask for, hopefully I won't make such a fool of myself