Discussion:Collections
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Discussion Forum Index --> Business Growth Community --> Collections
| 19 June 2007 | |
| I have some new clients who hired me to do their taxes ( most back filers) who have not provided me with the information to complete the returns and are not responding to my correspondence. I realize in retrospect that I should have asked for a down payment. One of them had me do a trust return and did not have me finish it. I guess he decided not to file it. I am a
CPA and and EA. I have contacted them and asked them to pick their stuff up. How can I get their stuff out of my office and hopefully get my money. I would love to call the IRS on some of them; but I don't think we can ethically do this. | |
| 19 June 2007 | |
| If you haven't finished anything, what makes you think you are owed any money? | |
| 19 June 2007 | |
Dear Kevinh5,
On most of the returns I have complete 95% of the work. I sent them an estimated bill of what they owe for the job. Of course I would like to get paid and complete the job but I don't want to keep their stuff for years. Believe me I am changing my policies, | |
| 19 June 2007 | |
| Exactly the lesson we have all learned. Unless you have a down payment or retainer, you cannot guarantee ever getting paid by any client. Those with back tax problems are worse credit risks than those filing every year. Either you live with it or you change.
In the client's eyes, you haven't finished the return yet, so they don't feel they owe you anything. If they had already paid you, they might be in more of a hurry to get you the rest of the missing information. If they had paid you half as a retainer, they would at least have a vested interest in finishing the taxes. Right now you are the only one concerned. | |
| 19 June 2007 | |
| Everyone has had at least one of these clients.
After suffering a few sleepless nights, I mailed their original docs back to them (return receipt) with a resignation letter. What a relief!!! I sent a "Bad Debt Write-off" credit memo for the amount outstanding because I didn't want anything to do with them, ever again. They had wasted enough of my time. It was an expensive lesson, but the peace of mind was well worth it. I'm not shy about requiring a retainer anymore. If the client is invested in the process, perhaps they are more likely to cooperate. | |
| 20 June 2007 | |
| My engagement letter included down payment, if you ask me to stop work client owes for that time, and collection costs are added to what they owed not subtracted from my cut. The last one has come in handy a few times. | |
Oldeastsidr (talk|edits) said: | 25 June 2007 |
| RE: engagement letters. I have seen them in the corporate world and for larger clients. I plan on restarting a small home-based practice on retirement from my corporate tax career. Is the engagement letter used even for the small individual client? Would be interested in how common it is in the small practice. | |
Www.cpa1.biz (talk|edits) said: | 26 June 2007 |
| I use them with almost every client. I am a very small practice. I use them especially for my bookkeeping clients. | |
