Discussion:Non Paying Clients

If check bounces or I have filed the return without receiving the payment and second request for payment doesn't lite a fire...I send the request again after I have received the new year tax documents from the client with a note saying that payment for last year has not been received. As soon as the client pays what is owed I will work on his current year return. This is a very infrequent thing for me. But it works.

My invoice usually indicates "Due on receipt or when services are rendered" and I'd give them about 2 weeks for payment, gentle reminder after a month - hasn't happened to me yet, but I would have no problem saying no to those headache ones.

clients.There was a link for a template,I can't seem to find. It talked about filing a 1040X to remove your name as paid preparer with hopes its doesn't trigger an audit!I heard its very effective!

Also any sample letters out there to fire a client.I'm not real good at that and could use some professional ideas.I need to do some housecleaning with a few pia's that don't want to pay as well as some small biz that i suspect aren't exactly on the up & up.

I have been turning away what appear to be potentially good clients.Only to deal with these headaches!just not sure the correct protocol as far as when to fire as well as suggesting another acct.or what. I was thinging something short and sweet without having to explain reasons!

I don't think you need to refer another accountant. You should definitely confirm the last return you prepared and the returns you won't be preparing.

It can't hurt to thank the client for the business & wish them well.

One disadvantage of a Home office is someone coming back and making a scene!I fired a client a few years back,Told him I wasn't going to be preparing as many returns the following year and was removing him from my list.He said OK until the next tax season when he got wind of me still preparing returns for some of his co-workers.He came into my office and we got into a pretty heated discussion as to why he was really fired.It was an embarassing situation as I was with a client.But more upsetting was my wife & young son had to witness this! My office has an outside entrance and is isolated from my house(converted garage) but it would still be nice to have a storefront but everyone around my area wants a 12 month lease.I have a federal job and am not busy enough for long term lease.Just looking for tips to part ways with no future problems! This problems stems from my early years building a base and advertising.Now it is strictly word of mouth.No one comes in my office unless i know them or they are a referal

If client has not paid, or refund is not received. I request regular payments. I do not charge interest if a regular payment is received monthly of at least $50. Otherwise, I just sent out monthly statements with a processing fee of 2%- minimum $10. No sense in spending time or money on collections if you know they have little income or assets. They generally always return the next tax season; I then have refund check mailed to my office. When check arrives, send staff member with them to bank across the street to cash and collect both years. One client was sent alone, did not return with payment that year, but returned the third time, we collected all three years including service fees.

I have the clients fax me a check with the 8879's and with the program we write up a check that needs no signature to cash. awesome program. I also have all my clients who want to pay tuesday for a hamburger today sign the form.

example. you do a corp and 1040 return for $2,000 the client can only pay $1,000 now. I have them sign an autopay agreement and write up the checks myself each month for the $200 per month..

this is also a great program when the client shows up and forgets his checkbook. I say that ok just sign this form and I will write a check for you.

you have to make sure you keep the faxed checks on file and make sure you never write up a check without a signed agreement..

This world would be a much better place if workers completed their assigned tasks before demanding payment.

I spent a ton of hours doing a compilation for a client. My engagement letter states that payment is due upon receipt. I have notified the client that his compilation is complete, however, he has notified me has no money to pay. Although he has not asked for his documents back, I am glad to provide any of his original documents once he requests it. But I have a real problem providing him with my 40 hours of work. (Compilation, financials, journal, ect.) I don't mind providing him with the work associated with his retainer fee though.

Does anyone know if this is an ethical violation and considered withholding client documents if he has not paid for those documents.

Why stick your neck out on an attestation with no fee.

You seem sincere in returning all original doc's.

I see nothing wrong.