Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
He has a small office with 2 employees - really, just him, one full time, one part time.
He rents office space in a very central part of town; easy for people to find him.
On Friday, a client and one he has had for 25 years, called him and said "It's an emergency; I'm being audited" - my husband got him in and they worked through all the items needed on the checklist. Then, my husband said "I'll call and represent you before the IRS" - Client - "What's the fee?" - CPA - "Today plus then - $300.00; Client - "That's too much, I'll go myself"
This was after spending 2 hours of my husband's time! My husband has been down about this all weekend. He feels used and abused.
This client is fairly well off, has no debt, contributes to charitable causes, could afford it. Why do people do this?
Then, he got a call yesterday demanding the work be done from another client. My husband mentioned that he was very past due on his bill ($6000) and they would need to work something out before the work could be finalized. Today, the guy sends him the documentation he needs to finish the work and said he'll bring him something ($$$ - not sure how much). Again, long time client - why do people treat people so shabby?
I've always told it's better for a 3rd party to handle the billing but he wants to do what he wants to do.
He has a small office with 2 employees - really, just him, one full time, one part time.
He rents office space in a very central part of town; easy for people to find him.
On Friday, a client and one he has had for 25 years, called him and said "It's an emergency; I'm being audited" - my husband got him in and they worked through all the items needed on the checklist. Then, my husband said "I'll call and represent you before the IRS" - Client - "What's the fee?" - CPA - "Today plus then - $300.00; Client - "That's too much, I'll go myself"
This was after spending 2 hours of my husband's time! My husband has been down about this all weekend. He feels used and abused.
This client is fairly well off, has no debt, contributes to charitable causes, could afford it. Why do people do this?
Then, he got a call yesterday demanding the work be done from another client. My husband mentioned that he was very past due on his bill ($6000) and they would need to work something out before the work could be finalized. Today, the guy sends him the documentation he needs to finish the work and said he'll bring him something ($$$ - not sure how much). Again, long time client - why do people treat people so shabby?
I've always told it's better for a 3rd party to handle the billing but he wants to do what he wants to do.
Is this how people are today?
(He is often much less than H & R Block)
No, people have always been like this.
I'm sorry this is happening. It's really discouraging, especially when some people, like your husband, try to hard to do things the right way.
At any rate, these people stay in arrears so long because he allows them to. He does need to let a third party handle the billing but since he won't he needs to finally say, "I'm sorry, but I cannot do any more work until the previous invoices are paid."
He also needs to invoice the other guy for the office hours.
I'm sorry this is happening. It's really discouraging, especially when some people, like your husband, try to hard to do things the right way.
At any rate, these people stay in arrears so long because he allows them to. He does need to let a third party handle the billing but since he won't he needs to finally say, "I'm sorry, but I cannot do any more work until the previous invoices are paid."
He also needs to invoice the other guy for the office hours.
Write a script for him. I will gladly ....... and the fee ..... after your account is brought up to date. He will loose a couple of non-paying clients.
Write a script for him. I will gladly ....... and the fee ..... after your account is brought up to date. He will loose a couple of non-paying clients.
If he feels uncomfortable calling, he needs one of his employees to call regularly about these past due invoices and absolutely don't do more work if they haven't paid.
As for the client who walked out, why does either one of them think office time would be free? When the client said $300 is too much, your husband should've immediately said okay, today's visit then is $120 or whatever.
A client who doesn't pay isn't a client you want, it's just a drain on your time.
Get a Dunn and Bradstreet account and provide feedback for the non payers.
Remember that while he provide services he is still a business and should have payment terms clearly defined and have a willingness to collect using the courts system.
I think more small service businesses see themselves a hybrid of employee and vendors rather than actual businesses that have to manage the more unpleasant aspects of dealing with customers.
I make a lot less than a CPA (dog walker/pet sitter) and so I handle my own invoices through an online platform called invoice ninja. I have the simplest account, which is free, but if I were your husband I would pay for the upgrades since I'm sure his revenue is substantially higher than mine.
I'm in my 6th year of business and I have to say, the last 6-9 months have been the worst with non-paying clients. If fact, I had to send out my third reminder for a client yesterday (finally paid me late last night). On the whole, they're not many, fortunately, but it's demoralizing and demeaning to have to chase after money you've earned as if the client is doing you the favor (your husband and I could probably fill up hours complaining!).
What I've had to do recently is clarify my policies and be a bit of a hard arse about enforcing them. Unless they are a great client for many years, paying on-time without reminders, I'm going to be all business, all policy. I find that if you just treat the transactions like institutions do, the better it goes. I also didn't send out invoices until this August. Most clients don't get them or need them, but I am VERY dedicated to sending them on the 15th and 30th of the month, without fail, to the ones who have needed reminders in the past. I just sent them out on the 31st, 3 of them, and they all paid within hours. Some people just need this.
For a CPA business. Your husband should know, from decades of experience, what situations necessitate billing and which do not. I'm surprised that he didn't hear about his clients' situation and immediately say that it would require a few hours of billable assistance. This situation was certainly different than a general call of inquiry, which we have done with both a CPA and immigration attorney. On the other hand, if your husband has been this guy's CPA for 25 years.. that's 25 years of business.. maybe count it as a one off...
We had paid an immigration lawyer to handle my husband's naturalization case, successfully, and a few years later he met with us, for free, to talk about the immigration processes for my father-in-law. We were not asked to pay, similar to when we first met him to talk about my husband's case. It's not unlike the "meet and greet" I do for free with new clients. I allow for a free consultation once a year for any client, in fact.
Is there a reason why this is bothering your husband more now than before? He's been doing this for at least 25 years, right? It's just sort of interesting that he's a long time veteran of the industry. I expect to hear these stories from someone much greener.
Service businesses are tough to begin with and prone to abuse by late payers.
Which is why I'm in a product business instead. They don't pay, they don't get the product.
My father and his partner had a welding/machine shop business for many years. They invoiced people. Some paid late, some never paid.
If I may make a gentle suggestion...
Package some of your services, like audit assistance, and sell them as products. Literally. If you have a website, you can have a product page and people needing assistance can buy 2 hours of audit expertise and pay in advance.
Mr. Got-rocks calls in a panic. Text him a link to the product page and once he pays, set up the appt.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Thanks for the responses
