Discussion:How do you approach retainers?
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Discussion Forum Index --> Business Growth Community --> How do you approach retainers?
| 19 December 2007 | |
| I see a lot of you talking about requiring a retainer for your Accounting work. I am curious how you approach that with clients.
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| 19 December 2007 | |
| I am just upfront and honest about it. Let the client know that your time is valuable and that you have these policies and procedures in place to make sure your business gets paid the money it should get paid. You shouldn't have to explain much more other than that it ispolicy. If they question, tell them it's your role to assist them in protecting their business and their assets <receivables> and that the same things you would recommend to them, you implement in your own business. If they balk, let em go.
I have not yet done retainers for tax work, but in all the audit work I have performed, I put my fee and payment schedule right in the engagement letter. I get 25% with the signed engagement letter, 25% at start of field work, 25% at the end of field work and then final payment upon deliverables. Tax clients who pay late in the past, I have made them pay in advance. When I've gotten burnt, which hasn't been too often, I just write it off after a small collection effort. | |
| December 19, 2007 | |
| I charge retainers for some new tax clients; the retainer is usually based on the total fee estimate to prepare their return. We generally collect it up front before any work is performed. Factors in making the decision on collecting a retainer include 1) Was client a referral? 2) Is there a significant amount of work involved? 3) Is it conceivable the client will not like the "answer" i.e. bottom line tax liability? .... and decide they don't want to pay IRS OR me for our services? 4) Is client hesitant when answering questions about relationship with their former accountant? I expect the reasoning for collecting retainers for GAAP engagements would be similar.
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Eastendcpa (talk|edits) said: | 19 December 2007 |
| I just got a retainer yesterday. After going over the info from client I said that I wanted them to be familiar with my policies. I informed the client that I require engagement letters for all clients. I explained the letter and its benefits to me and them. Then I said I require a retainer in the amount od $XXX. They wrote the check. It really wasn't a big deal. I do not think I'd want a client who didn't want to give me a retainer. | |
| 19 December 2007 | |
| At the firm where I'm working, we require retainers for all of BEGooding said and if it's someone "coming to Jesus" and filing after a few years (3+), regardless if they're a referral, personal friend, former client, etc. I've also seen my boss use it as a tool to get out of work. Say if it's a person we don't want to say outright no for whatever reason, we just give a big upfront retainer (I would estimate 100-115% of estimated total costs). Of course, the retainers are usually completely burnt up by whatever work we have to do with a small balance either way, but clients just don't like paying upfront. They can either pay up front or at the end. But it's not a bonus, like you said above.
The retainer puts control in your court. I can't see any professional firm (law, accounting, architect) working without them. On a related note to the late on taxes above, we also outright reject/fire any clients that are or become behind on child support. | |
| 19 December 2007 | |
| Z-man,
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| 19 December 2007 | |
| Newarcher,
I wouldn't doubt that. Slang around here for loosey goosey billing is "billing like a lawyer." | |
Fort Wayne CPA (talk|edits) said: | 24 December 2007 |
| I do not normally charge retainers; unless, I fear getting paid. If a client has waited several months to pay me in the past then I will make them pay a retainer the next time I do work for them.
Mike Sylvester | |
