Firms warned not to pad bills

A news article taken from AccountancyAge.com.

By Philip Smith [07-11-2002]

Accountancy firms are being warned that their timesheet records must be able to withstand close scrutiny from clients in the wake of 'padding' allegations in the legal world.

As City law firm Clifford Chance embarked on a damage limitation exercise following the revelation that its US associates believed the target for its billable hours was open to abuse, experts warned accountancy firms could be open to similar charges.

'The reality is that the trend for transparency can only work to everyone's good as long as firms that are issuing bills based on hourly rates are really adhering to that rate - if they are issuing bills that are not close to those there is going to be a problem,' said Ray Nolan, chief executive of Coretime, a timesheet systems provider.

Nolan said firms needed adequate systems to justify hours billed to clients. The US row erupted after it emerged associates at Clifford Chance were required to bill clients 2,200 hours each a year.

A KPMG spokesperson said the firm's fee earning and support staff filled in timesheets for internal purposes only. 'Billing arrangements with clients are separate and are agreed on a client by client basis,' she said.

A Pricewaterhouse Coopers spokesman said: 'Although we monitor utilisation rates we do not impose across the board targets for our people.'

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