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The check’s (not) in the mail—what can we do about it?

My colleagues and clients all over the region are telling me the same story. They work with one ear listening for incoming mail. The moment they hear it’s arrived, they’re out of their chairs in a flash and rifling through the day’s deliveries.

The burning question: any checks? 

The e-version of the same scenario: multiple log-ins every day to see if invoice 12345, or any of dozens more—all of them months overdue—have been paid.

Late payments are among the biggest issues facing CPA firms today. If you’re playing that waiting game, maybe you’ve asked your client the obvious question: why?  And maybe you got the typical response: “Sorry—I can’t pay you until my Client X pays me.” Meanwhile, Client X is probably hearing the same story from his or her late-paying Client Y.

One practitioner says “We are becoming a COD Firm, particularly with tax return clients. We are getting more and larger retainers up front, including for 1040 clients each year.”

I have another client who said that if an ongoing client owes more than a small amount ($2,500 or so) they won’t do new work (including 2008 tax returns) until they pay 75% of the prior balance. 

Other solutions?  Send me your thoughts—maybe we can come up with some fixes.

Posted by David Flax, CPA on March 16, 2009 • Email to a Friend

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