Case Study Accounting Technicians

Professional Indemnity insurance is an important part of many professionals' business risk management. We asked successful professionals in key sectors about their business, and where PI fits into the work they do.

Kirti Patel, chartered management accountant and owner Kirt & Co Accountants

What does your business do?

We are based in Leicester and offer a wide range of accounting, tax and business advice services to individuals, sole traders, partnerships and limited companies. Our team comprises fully qualified chartered accountants and accounting technicians who manage book-keeping, payroll and financial transactions for clients.

What kind of risks do you have to think about in the day-to-day running of your business?

We have to get references for new clients and adhere to Government regulations, and be very clear about who the accounts are for and for what purpose. Obviously, we have to take great care not to make a mistake that could cause problems for a client or lead to a legal claim being made against us. All book-keeping has to be accurate and efficient management of a company's payroll is crucial. Any errors in payroll can jeopardise employer-employee relations – salary payments must be made on time. We have to meet deadlines for all services and technical administration such as processing VAT returns and annual returns for payroll by due dates. Any delays with the tax office would risk fines for our clients and reflect very badly on our business.

When did you buy Professional Indemnity Insurance for your business?

I set up my own accountancy firm two years ago, and as PI cover is compulsory we obviously had a policy in place when we opened for business.

What are the key benefits of PI cover for accounting technicians?

It's the satisfaction of knowing that if something does go wrong, you've got comprehensive insurance with all the financial and legal back-up that entails. Also, I like the fact that my policy provider has a helpline service too, which means we can seek advice if necessary.

What aspects of your business or services that you provide are most open to risk?

We have to be particularly careful when providing references for clients if they want to get a mortgage or a commercial loan. The letter of reference and supporting accounts that we produce have to be accurate, as monies loaned will be calculated based on this information.

What are your customer's greatest concerns, and how does PI help protect your reputation?

There can be a lot of red tape and bureaucracy to wade through and customers most want our help to get whatever service they require in place with minimal delay in a cost-effective and efficient way. We ensure that everything meets with regulations and government legislation so they don't need to worry. Also, cash flow management is very important – we have to manage payments to our clients' creditors and suppliers on time to keep their businesses afloat.

What's the most interesting case of a negligence claim or horror story you've heard of in your industry?

It's not just the big stories of dodgy dealings that make the newspapers that we all hear about. When it's a case of negligence, the smallest mistake can cause enormous problems. For example, if a tax return is filled in incorrectly, with a figure in the wrong column, the tax office can decide to investigate the client's accounts, and all previous returns going back several years, and impose a fine. That can be very costly and stressful to sort out.