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#1
zl28  
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Got in a tif with a client.

He had some weird stuff on 2021 return and the k-1 he got wasn't fully accurate
and he misconstrued whether he bought into a partnership or was just an initial investor.

Nevertheless, had to amend the 2021 federal.....and we didn't have one of the state k-1's
for misc reason....i eventually got it for us....and just filed the 2021 state return 3 weeks ago.

Needless to say, i billed this guy for 2021 thru quickbooks.

He was supposed to pay $1,250 within a week and he didn't

So i billed him a 2nd time, and then a 3rd......once each week.

Then i sent him a very modestly abrupt email saying i discounted the fee,
that it should only take him a minute to click a button to pay it,
that i spent alot of time on this return
and that for a guy who makes 2 mill per year i shouldn't have to send 3 payment requests.

He gives some bs story.

He doesn't realize I can see thru quickbooks that he's looked at the bill 10x..literally.

So now he wants a new accountant and for me to send my 2022 work....i've prepared extensions and entered about 50% of his info.

And he wants his old returns as he is switching accountants..than he'll pay me the $1,250

Do you think i should request payment on the '22 work?
or
should i just sent him what my draft 1040 looks like so far and the extensions for free
 

#2
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What does your engagement letter say?
 

#3
zl28  
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didn't do one
 

#4
CathysTaxes  
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Don't give him anything until he's paid you. Bill for 2022. Don't send him any drafts. Once he gets this you will never get paid.
Cathy
CathysTaxes
 

#5
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zl28 wrote:Then i sent him a very modestly abrupt email saying i discounted the fee,
that it should only take him a minute to click a button to pay it,
that i spent alot of time on this return
and that for a guy who makes 2 mill per year i shouldn't have to send 3 payment requests.


Maybe give him a short call next time instead of doing that. "Hey Bob, I noticed you haven't paid your invoice yet. I sent a couple reminders. Are you having cash flow issues at the moment? When should I expect the invoice to be paid?"
 

#6
zl28  
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Location:
usa
I think you are right - a call would have been better.

Though i know he has the $ b/c he made
2 mill in 2022
and
1 million in 2021.

Didn't work out well bc lost a client that paid over 1k per year for a 1040 which is quite good for me.

On the flip side, having to send
an invoice 3 times
then a polite email
then a not so polite email is sort of nuts.

He says he was out of the country for 2 weeks travelling extensively.

Ok - but my quickbooks showed you viewed the invoice over 10x.

Only takes a minute to pay the bill.

Next time i'll send an email saying 'can you call me'
 

#7
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I've set my billing system to automatically send me A/R aging reports every Friday morning. That lines up with my billing and payment terms (I bill Wed evening and allow 15 days for payment) so an invoice just one day late gets on my radar promptly. If I see that a payment is past due, I send a boilerplate reminder email with link to pay through my billing software, and I also send a separate email through Outlook saying something along the lines of "Hey Bob, I noticed such and such invoice is past due. Could you pay it today? If you can't please let me know." I find personal emails are a lot hard for most people to ignore than a boilerplate payment reminder email sent from billing software.

If the invoice is still unpaid the Friday after, I start calling. That's what works for me and it works well. Clients that I consistently have to chase for payment find their way out of my practice.

Just because someone makes seven figures doesn't mean they're good at managing money or are cash flush. I've been surprised just by how cash poor some of my highest earning clients are. Some of them are literally living paycheck to paycheck.

It's easy to get frustrated, but you catch more flies with honey than you do vinegar.
 

#8
zl28  
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That's good advice - thank you!

Saying can you call me sets the tone that the situation has been elevated and doesn't make me cross the bridge to the abrupt side with a client...which very rarely happens...but as the economy isn't skyrocketing anymore, it's becoming more prevalent.
 

#9
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zl28 wrote:Saying can you call me sets the tone that the situation has been elevated


Not to pick nits, but clients who aren't paying bills aren't going to call you right away just because you asked them to. You need to be active, not passive. Pick up the phone and call them. If they don't answer, leave a voicemail.
 

#10
zl28  
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usa
Agree - but for some it's a clear indication that I"m changing the dynamic; that just ignoring my invoice and emails will no longer suffice.
 

#11
KoiCPA  
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More than anything, I'll say: carefully review your requirements to provide documents.

I know that my state (WA) is more client-friendly than most, but I have an obligation to provide a copy of a return WHETHER OR NOT it has been paid for. Generally, I can keep unfinished work, so I'd have to give him copies of 2021 but not 2022 work so far.

Given that he's asked for you to send your 2022 work, that would be my leverage point, but you may be able to leverage 2021 as well. Invoice for 2022 so far, and then insist on full payment before you provide it.

I wouldn't spend a lot of time trying to collect. I've tried all kinds of methods, including collections and judgments, and basically people pay when they want to. Let him know what the balance is and what he'll get if he pays and then leave it in his court.
 

#12
zl28  
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thanks for post - interestingly, he was a gentleman about paying for 2022.

I told him i thought it was fair i should be paid.

That i wanted his thoughts.

He said just send him a bill for 2022.

He didn't ask how much.

And he paid it immediately within minutes.
 

#13
zl28  
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Location:
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I wouldn't spend a lot of time trying to collect. I've tried all kinds of methods, including collections and judgments, and basically people pay when they want to. Let him know what the balance is and what he'll get if he pays and then leave it in his court.

I spent alot of time on this one and gave him a very good price AND i know he looked at the bill 10x thru Quickbooks.

Depends on my cash flow - but i expect people to pay in a timely manner.....otherwise i may switch them to prepay for the rest of their time with me.
 

#14
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This is an interesting read.

I agree with MVT in this thread. While I don't like slow payers or want to make excuses for them, it's really not a "personal attack", as they say.

He might be looking at it saying, "hmmm, how much is in my account? Nice guy that zl28, maybe I should see about settling it tomorrow if my deposits clear". OK, he's not really thinking that - but his thoughts might not be as sinister as we might think when we are seething over unpaid work.

I DO like telling clients that I worked hard for what I billed and that I require that invoices are settled promptly so I can pay my employees and my own obligations on time, but I DON'T like insinuating that "they make or have enough to pay it" (avoid him thinking like it's an attack).

Once I told a slow-to-pay client something like, "you don't seem like the type that would have someone provide a lot of hard work for you and not pay them for it, and so I bet you have some sort of circumstance to where you have a reason not to have settled the invoice. Then I go into the rest of the speal. (spelling on speal?)

This is my sugar vs my vinegar and I have been modestly successful with it, but I'm glad to hear that you got paid in the end. Sometimes the squeaky wheel gets the grease.
 

#15
sjrcpa  
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spiel
 

#16
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Just cause someone makes $1MM or $2MM doesn't mean they have money.. But, really sounds like he doesn't value your work. Good riddance...
 


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