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Accounts chaos – paying bills with the wrong chequebook 13 Feb 2012

OUR client has an interest in a couple of companies and a family trust.

Sometimes, when it is convenient to do so, she grabs whatever cheque book she can lay her hands on to pay the bill in front of her. Thus personal bills get paid by the trust and trust bills get paid out of the company.

We have to correct the situation manually. It takes a lot of time. Surprise! The accounting fees go up.

Recently we struck an extreme case of this. Paying bills out of the wrong account is a nightmare. Never do it.

As we’ve said before, make a loan if needed to the entity which has to pay the bills. By the way, loans from one company to another can also be a headache unless the two have identical shareholdings.

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