Love or Hate the Estate Accounts?

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ESTATE ACCOUNTS

Estate accounts – their preparation can be such a simple process or they can be a form of water torture as you hunt for the missing numbers. It is the file that you get handed where no-one has ever done any accounts in the five years they have been running this contested probate, which makes the heart sink!

There really is no excuse to still be preparing accounts manually or the equivalent using a Word package and sitting there with a calculator in hand. It is always stunning to find firms that fail to use the technology they have to hand.

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A little Excel training will save you a lot of time and a lot of duplicated work.

Spreadsheets rule

The setting up of estate accounts at the beginning of a probate to include a page that takes account of the values reported to HMRC and any changes that have been applied for will save a lot of time. The number of times people are handed a half done probate file and have to scroll through the correspondence clip for this information is just time wasting and inefficient. All the detail can be in a neat and tidy set of estate accounts that ensure that nothing is overlooked and all the letters that are relevant can be cross referenced by inserting the dates so if there is a point to check the letter can easily be found.

Income tax

There is no need to sit there calculating the tax for each income tax return by hand or the beneficiaries’ R185, the computer can do all of this for you if you have the correct precedent set up and of course you enter the right information.

Related pages

The first thing you need to do is set up a suitable estate account template that uses multiple pages and where the data is cross referenced and duplicated to separate tax schedules as appropriate. This needs to be set up to ensure that it will correctly fit the page and that any text in the estate summary has been appropriately wrapped so that it will always display correctly.

Efficiency pays

Focus on efficiency and effectiveness rather than leave the estate accounts to the end of the job. Set up the account on day one and as the replies to the initial letters come in enter the data into your document. Each time money is received be it income or capital note this so you can easily see who you are still chasing and what the tax liabilities are. It is a totally false ‘economy’ to muddle through on the assumption you can charge for all that confusion and time taken checking. “Customers” are not patient; clients will challenge inappropriate costs and your family prefers to spend time with a lively, unstressed person who can leave work at work.

What spreadsheets can do for you

A spreadsheet can be set up to calculate the tax for you whether it is inheritance tax and splitting out between instalment option property and non instalment option property. It can calculate the tax on interest and dividends automatically when you enter the net figures and if you remember to be date aware when entering this information it will sort it so that falls in the correct tax year.

Using the technology you have to hand can save a lot of time. You do need to make sure that you reconcile the figures to the balance in client account and the assets you have or accounts mean nothing. If, however, you do this as you go along then it is very easy to get your probate quickly finished when the final monies are received and that well programmed spreadsheet can even do the percentage splits between the beneficiaries for you. So what are you waiting for? Can it be bad to have happy beneficiaries who recommend you to their friends? Is it not good for cash flow to finish an estate promptly and convert the work-in-progress into cash in your bank quicker? Won’t the managing partner be delighted you now have the capability to increase your capacity?

If you need some help in getting a spreadsheet template set up for your firm then do contact us to discuss your requirements.

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