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Getting paid on time- A recurring issue now for CPAs
How are you handling this?
Collections
Just about all of my clients are complaining about slow collections.
Below is how one of them clients handles this issue.
Outstanding current balance
If an ongoing client owes more than a small amount of money ($2500 or so) they won’t do
new work (including 2008 tax returns) until they pay 75% of the prior balance.
Exceptions
They would respond to tax notices and other small emergency
items without getting paid and they would file
extensions for past due clients .
How are you handling past due clients? I will summarize and share my results with you
Comments (0)
Thanks for sharing your comments. I agree. Many problems avoidable with engagement letters and straightforward follow.
Robert Fligel • Posted on Sat, January 31, 2009 - 4:42 pm EDT
We are becoming a COD Firm, particularly with tax return clients. We are getting more and larger retainers up front, including for 1040 clients each year. My area of practice is more complex because it is litigation and too often judges have control; moreover, attorneys have no qualms about serving an expert, to appear at a hearing or trial, who has exercised a right of suspension and/or withdrawal as specified in an engagement letter (and, as to that term, “engagement letter,” when will CPAs finally “get it” and call it what the courts call it - a “contract?”). Once an attorney has done that, a smart CPA will call his/her E&O;carrier, only to discover that they will say that you might as well go because that is the only shot you have for payment. A lot of words to say that we are really trying to manage our credit, and therefore our risk, better. It just doesn’t work well across our various disciplines.
Michael Kridel • Posted on Sat, January 31, 2009 - 4:06 pm EDT