Discussion:If client does not pay for work performed
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Discussion Forum Index --> Business Growth Community --> If client does not pay for work performed
Www.cpa1.biz (talk|edits) said: | 25 May 2006 |
| Almanacers,
When you prepare a return for someone, do you ask for the money up front? And after preparing the return and spending all this time doing it, what if the client does not want to pay for it. Can you sue this person because they already signed an engagement letter. Also, what if they didn't sign an engagement letter and all you have is the organizer that they wrote stuff in. It is still implied. Has this ever happened to any of you all? Please inform. Thanks, www.cpa1.biz | |
| 25 May 2006 | |
| I personally try to get the money when the return is picked up. With certain clients like bookkeeping or writeup clients I will float money until the next billing cycle. I bill them once a month.
Those that dont pay or forget or what ever, well I give them some time say 6 months to a year with continued letters and statements once a month. If they don't contact me to try to pay or setup some sort of agreement, then off to collections. Yeah I get less money and sure the client might not like me no more but who wants a client like that anyways. Clients who don't pay really tick me off. | |
| 25 May 2006 | |
| I don't think that a filled in organizer is enough to sue someone for fees over. If you had a verbal agreement as to the amount of the fee and the client admitted that in court then that might be enough. A signed engagment letter is your best bet. | |
Michaelstar (talk|edits) said: | 26 May 2006 |
| If it is not much money - just walk away from it and forget it. Accept this as part of the learning curve. Number 1 - always get a signed engagement letter - Warren is on point. If you ever have any questions about collecting - ask for a retainer before you start the work. It happens to all of us. The more time you spend chasing nothing - the lower your effective billing rate ends up and the more upset you will end up. Remember - it is part of the learning curve but it still hurts. | |
| 26 May 2006 | |
| May I get a sample of a single engagement letter?
It happens that after we spend, lets say, 40 minutes entering the info to file a 1040, client says: "Too expensive- I don't take it" My boss want clients sign a $15.00 fee form- to get reimbursements for estimates- to get some $ if that happen. Cumbersome.. | |
| 26 May 2006 | |
| Many of my clients mail their returns to me. If they haven't paid the prior year I send "yet another bill" before I prepare the current year. They are all told that their return will not be filed until they pay the prep fee. I have little problems this way. Usually 1 out of nearly 300 clients per year. | |
| 31 May 2006 | |
| I have one this year who never picked up his returns after I gave him the amount due. The files are still in the drawer and I have not collected. I have written him letters, along with invoices and telling him what might happen if he doesn't file. I prepared two years for him and didn't collect a dime, yet. I still have the files in the drawer, along with his business files for 2005. | |
| 2 June 2006 | |
| Remember that you are under no obilgation to provide the completed returns until and unless the client pays up. However, if they change their minds, you ARE required to return their original client files. I've begun accepting credit cards, and if they don't have the cash now, I write up the post-dated charge slips, extending out payments by one, two, or three months. | |
Sfhurrell@hotmail.com (talk|edits) said: | 6 June 2006 |
I don't even start working on a file without a signed engagement letter. So if someone sends in their organizer without the letter, a new letter goes out. I send monthly bills and at the 5th monthly bill, I write on it, "Please pay within 10 days or this will be sent to collections." I use a collection agency where you buy a package of 10-15 forms good for a year or 2 and I don't even use 5 of them but it is in my arsenal and the stucture is there.
Needless to say, anyone who did not pay the prior year, does not get an organzer this year. | |
