Wednesday, June 28th, 2017

Thinking of Suing a Client For Fees? – Read This

“The payment for certain sins can be delayed. But they can’t be avoided.” – Shawn Ryan

IMG_3046I was recently talking with a client about pursuing litigation to collect outstanding fees. It is a difficult topic and something CPAs usually avoid, at all costs.

My good friend, Stephen Vono of NAPLIA (North American Professional Liability Insurance Agency) reminded me of an excellent article on the NAPLIA website titled, “Suits for Fees – ways to avoid them and their liability.”

He, and I, recommend taking steps to reduce the potential for unpaid fees in the first place. It is your best defense.

In the article, it notes that there are three basic billing practices which, when implemented regularly and effectively, can dramatically reduce the number of collection problems your office will face.

Retainers – Retainers should be used on small engagements and on large engagements.

Bill Frequently – Never hesitate to progress bill. A few smaller bills are much better than hitting the client with one huge bill at the end of the engagement.

Payment on Delivery – The preparation of tax returns is a natural for asking for payment upon delivery. I have found that most clients who are new to the firm, actually expect to pay upon delivery.

Follow the link above to read the entire article on the NAPLIA website. Also, take note of the many other wonderful resources on the website. I love the Engagement Letter resource.

  • "The time to save is now. When a dog gets a bone, he doesn't go out and make a down payment on a bigger bone. He buries the one he's got."
  • Will Rogers

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