Client is leaving. Wants QB data file.

You might check with your state board of accountancy. Even if you are not a CPA they can give you some legal guidance. Sounds like they just want to save a lot of data entry to get up and doing their own. If you want to part on good terms you might consider obliging him. And tell him to contact you if there are any questions, business might pick up and he would be back. Or refer you to someone.

I know how you feel "these are my workpapers". In most states the general rule is you have to give them any documentation they gave you, but can keep what you created.

I concur with greenmtn. It's your work product that he's requesting so I understand your apprehension. As an accountant in a former life (as an employee of a property management company), when we have attained a new client or a client left, the the transition process included providing balance sheets, a/r & a/p reports, hard files, etc.

In the past when I've had similar situations when a client has left it really depended on the situation and terms of them leaving. If they left on good terms, I didn't mind bending over backwards to help them including providing them with an electronic copy of their file. On bad terms, I have retained the file and basically wished them luck.

There is no right or wrong here. Cover your legal bases and do what feels right to you.

Hope that helps,

Joyce

I agree with greenmtn on giving the client the data file but for different reasons. Here are my reasons.

1. My engagement letters always specify who owns the data file. In most cases I specify that the data file belongs to the client. That is the life blood of their business. They can be put out of business if they do not have access to that data. They will also need the detailed info for external audits (e.g. IRS and state tax audits). If they have paid you then that data file has no value to you but it still has tremendous value to the client.

2. In my opinion, you are providing a service of entering the data into the data file for them. Once they have paid you for that service then you are fully compensated for your work.

3. This presents an opportunity to change your relationship with them. I suggest that you talk to the client about periodically reviewing the work done by the bookkeeper. Unless that bookkeeper is familar with QuickBooks, chances are, that they will need some training on how to do things the QuickBooks way. There will also be a need for clean up. Both of these can be handled by periodic reviews (e.g. monthly or quarterly). They may be able to afford these reviews and you will get some income from the reviews and training and will maintain contact with the client. Actually, they cannot afford to not do these reviews. If the transactions are not being entered properly into QuickBooks then the business owner is basing decisions on faulty information. That could be a lot more costly than the reviews.

4. It generates goodwill. You will have helped the client out and kept the parting on a friendly basis. The client will still have a good feeling about you and will probably be willing to refer people to you. That will not be the case it you make the parting difficult.

Things change in business. While the client is having a tough time now, that may not be the case in the future. You want to be in a position to be of service to the client when they are able to afford your services. Towards that end, do everything possible to maintain a good relationship with the client. Keep checking on them even if they are not using your services. Something may have changed where you can help them and they can pay you for it. In the end, it is easier to maintain relationships and clients than it is to start new relationships and convert them to clients. Also, you can be assured that, if you upset the client, then they will tell people about it and you do not need that sort of publicity. You want them to tell everyone how good you are and how easy you are to work with.

That is my two cents worth.

Will

PS. Be sure to keep a copy of the file you give them. That will be tremendously valuable to you if something goes wrong and they try to blame you.

Just my 2 cents - the data isn't some abstract thing that we create. It's put together from information obtained from the client. I do Quickbooks work remotely either by accessing their Quickbooks files using LogMeIn or by using Quickbooks Online. I'm paid to fix there messed up books and the only things I keep are my contract and paid invoices. I don't need anything else.

It's your client's property. He's already paid you to create and maintain it, right? Give it to him and keep a copy.

Best regards,

Riley

I will add another viewpoint for discussion/consideration--if you change tax preparers or payroll providers neither will provide you with a data file of your information. They will give you the necessary reports, but not an electronic data file of your tax return or payroll information.

Please mark this answer as helpful or solved or post additional questions. Thanks!

Michelle L. Long, CPA, MBA

Author of: Successful QuickBooks Consulting

Advanced Certified QuickBooks ProAdvisor

National Trainer for Intuit Accountant Trainer/Writer Network

MLongConsulting.com

If a client leaves becasue the move and their new tax preparer uses the same tax program we have supplied an electronic file for the new preparer to use. Just good PR.

Thank you all for you help! We did give the client their QuickBooks data file and most office files (except for some in-house permanent files, communications, etc). We did keep the computer copy of one specialized audit reconcition worksheet that was developed here in-house. We returned the hard-copy printouts of these reconciliations, but we keep the Excel files with our formulas. The client had NOT paid us to develop this worksheet, and we use it for other clients. The client lives a few hours away, and we will most probably never hear from them again. However, they did pay us to set up the data file and maintain it. So, as suggested by many of the responders, we forwarded their QuickBooks data file. Thank you!