Discussion:After season fees/late fee policy
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> After season fees/late fee policy
| 31 May 2008 | |
| Two questions here:
Do you increase your fees during the summer (for example, having to meet one client for that one day)? As much as we might say 'never again', you prepare a return, a COD because the client forgets his wallet, and the client still forgets to mail you the payment after several reminders. But let's say eventually the client will pay. Do you have a policy of charging a late fee in this situation? At what point... 2 weeks, a month? Thanks. | |
| 31 May 2008 | |
| == STATEMENT ==
All past due accounts will be subject to a 1.5% per month charge or 18% per annum | |
| 31 May 2008 | |
| We do not charge any late fees for late payments, although I would agree that it is a very fair arrangement.
I am not sure about an increase in fees during the summer though -- many times we encourage a client to file an extension during the peak tax season prior to allow us to spend more time on his/her returns during the summer time. I suppose in this case we can't penalize them for coming to meet with us in the summer, even if that means I commute all the way to the office just to see them and nobody else. | |
| 31 May 2008 | |
| I have year round work. Not just a tax person. So, I am in the office year round anyhow. I also agree with the 1.5% statement that should be placed on all bills. Rarely do I charge it, it is just there to encourage prompt payment.
Think about it, a client can only burn you once and while it's an annoyance, they usually come back next year and now they pay last year and have to pre-pay this year. It's too stressful to sweat over non-payments by clients. Unless it's a $500+ tax return, oh well. Write it off and move on. For those larger amounts, I then will send them the "I am requesting the IRS to remove my name as paid preparer" letter as I was not paid for preparation of your tax return. I have done this only twice and both times I received a phone call and arrangements were made for payment. | |
| 1 June 2008 | |
| At our firm... payment is due on receipt and before returns are efiled.
Payment not received after 20 days are subject to a rebilling/late payment charge of $40 per subsequent statement issued and interest at 1.75% per month. | |
| 1 June 2008 | |
| Just a follow up question to what Fsteincpa had mentioned -- can we really file for a request to the IRS to have our name removed as the paid preparer if our client has not paid us??? What form do you file for that? Or is it something that we simply ask for on the phone? | |
| 1 June 2008 | |
| no idea what would actually happen. I just have a sort of form letter that I send to client stating that the attached letter will be sent to IRS and the state taxing authority requesting that my name be removed.
It's really a scare letter. Bluff kinda. lol. but it works. | |
| 1 June 2008 | |
| RE: Summertime. To me, this is the most profitable time of the year. This is when I follow up on the financial planning opportunities that I discussed with the client during tax prep meeting. Since I have face-to-face interviews with the large majority of my clients, I always take the time to discuss other financial matters with them.
During the relaxed summer hours, I have them come into the office or meet with them for coffee to talk about these matters. I typically don't charge for these informal interviews, but when a project is set up, either for tax planning or some other type planning, I charge healthy hourly rates. These summer sessions tie the client to me like nothing else. This is the time I really hit them up for referrals. Remember - satisfied clients do not refer - enthusiatic & thrilled clients do. | |
| 1 June 2008 | |
| Way to go, Marcilio! I am a CFP/EA myself, and know exactly what you are talking about when it comes to revenues from sources other than tax/accounting. I am curious as to how you strike a balance between getting the tax work out during the tax season and spending time talking to clients about other financial matters -- I find it extremely difficult, especially when I am sleep deprived -- you almost have to have lots of energy to start such a conversation. But then if you don't start right there right then and plant the seeds, it is hard to get the clients back after the tax season.
I once asked another CPA/CFP that I know how he handles this dilemma. He basically told me that it is hard to get clients back into the office after the tax season, so whenever an opportunity of substantial revenue shows up during the season, he takes care of it right away, however busy he is. He said he tried deferring those till after the season in the past, but he had a hard time getting the clients back into the office, so he ended up losing some of those engagements. | |
