Financial and Legal Practices Flashcards

A client asks a VA to give specific tax-filing advice. What is the appropriate response?

Answer: Refer them to a licensed CPA or tax professional

A VA should not provide professional tax advice and should refer clients to qualified experts.

What does reconciling a client's accounts mean?

Answer: Matching records against bank statements to ensure they agree

Reconciliation compares internal records to bank statements to catch discrepancies.

A VA handling payroll discovers an employee was underpaid. What should they do first?

Answer: Notify the client and correct it per their instructions

Reporting payroll errors to the client and correcting them promptly is both ethical and legally required.

Which practice helps a VA avoid commingling personal and business finances?

Answer: Maintaining a separate business bank account

A dedicated business account keeps finances clean for taxes, audits, and liability protection.

What is the purpose of a SOW (Statement of Work)?

Answer: To detail specific deliverables, timelines, and costs for a project

A Statement of Work specifies exactly what will be delivered, when, and for how much.

A late-paying client owes a VA for two months. What contract clause helps address this?

Answer: A late-fee or interest clause on overdue invoices

Late-fee clauses incentivize timely payment and compensate the VA for delays.

Why should a VA review a client contract's termination clause before signing?

Answer: To understand notice periods and how the relationship can end

The termination clause defines how and when either party can end the agreement and any notice required.