How to say No and not lose a potential client

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#1
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I have a friend who messaged me on Facebook asking a tax scenario that he is facing and ask if he can make certain deductions.

It will be more than a simple yes and no answer. How would you respond to this person? I do not want to just ignore it and I do not want to be rude. I do not know if it will lead to any future referral (none so far).

Should I even give him my hourly rate or quarter of an hourly rate? How do you deal with "I have a quick question" friend?

Please help.
 

#2
smtcpa  
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Is he a friend or a Facebook friend? If just a FB friend I would tell him it's not as easy as he thinks and you charge an hourly rate to go through it all. If it's a good friend, I might do more for free.
 

#3
Wiles  
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Whatever you decide, schedule a real appointment or a phone appointment. Make him sit through the time it takes you to respond.
 

#4
novacpa  
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Say, "unfortunately this is how too many malpractice suits begin - shooting from the hip. I can give you a "quick-draw" answer and mislead you, since I am not fully aware of the "full scope" of your tax situation this year or in prior years."
Taxes are complex...blah..blah..blah - my fees are ...blah..blah...payable 1/2 now ..1/2 when done.
 

#5
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If an actual friend, I would simply explain liability and have them sign an engagement letter. Would I charge for my time? I'd probably discount it out to ZERO if an actual friend. Otherwise, I would be inclined to discount it but still charge if it could lead to future work or referrals, since it is not a simple yes or no question.
 

#6
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I usually preface such requests with:"I'm happy to provide to a friend an answer I don't have to research and spend time analyzing. The answer you're looking for will require more thought and research. I'm happy to provide you assistance to get to the right answer, but we'll need to make this a formal arrangement."
~Captcook
 

#7
ATSMAN  
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I use a similar response like CaptCook! It is easier to tell that to a friend or a friend of a friend than family.

i have actually told a family member (by marriage) that I prefer not to do taxes for family members other than my immediate family. As you know they expect too much for very little pay!
 

#8
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I made it a point to not take on friends or family as tax clients, esp considering that most of them are business owners, not simple 1040s.

Why take on 10 corporate accounts at deeply discounted prices (that they expect to get) when I can take on 5 corporate accounts that will pay me triple?

If someone is not willing to pay you for your services or understand the amount of time and effort involved, why would you want such a person as a client?
 

#9
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Pure Peace wrote:If someone is not willing to pay you for your services or understand the amount of time and effort involved, why would you want such a person as a client?


Similarly, are the "friends and family" you mention not willing to pay someone to perform their work?

I love having friends and family as clients. Managing the relationship is so much easier and I already have their trust.
~Captcook
 

#10
ATSMAN  
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I love having friends and family as clients. Managing the relationship is so much easier and I already have their trust.


That is fine until they screw up and expect you help them out of the pickle or worse blame you for the problem.

Example: They forget to give you that 1099-Misc for some side job. 2 years letter they get a IRS or State notice with interest and penalty piled on :oops:

IMHO that is one quick way to drive a wedge into an otherwise friendly family relationship!
 

#11
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ATSMAN wrote:That is fine until they screw up and expect you help them out of the pickle or worse blame you for the problem.
...
IMHO that is one quick way to drive a wedge into an otherwise friendly family relationship!


These sound like people I wouldn't call friends to begin with.
These are also the type of people I wouldn't want to work with regardless of whether they were family or friends.
~Captcook
 

#12
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CaptCook wrote:
Pure Peace wrote:If someone is not willing to pay you for your services or understand the amount of time and effort involved, why would you want such a person as a client?


Similarly, are the "friends and family" you mention not willing to pay someone to perform their work?

I love having friends and family as clients. Managing the relationship is so much easier and I already have their trust.


From my experience, they would pay someone else, but if that someone else was deemed "too expensive", they would look for me to give a "friends and family rate". By human nature, they would be more comfortable with me; leading to many random texts asking tax questions all hours of the day, asking me to take on their father's company which is "super simple" bc his accountant "charges too much".

I do have 2 particular friends (attorneys who understand the billable hour and such) who explicitly sought me out simply bc they wanted someone who knows his stuff and someone they could trust. They don't mind paying my fees at all and made sure to let me know that they "get it", regarding my billing. Of course I shave a little off my fees for them, but not too much.

I am happy that your situation is nothing like mine and that you are able to work well with friends and family. I do not think that friends and family expecting an extra level of service at discounted prices means they "are not true friends", that is just human nature.


I will take on simple 1040s from my family and friends, but as I mentioned, most are self employed/business owners with significant activity and transactions. I will not take any of those on, unless they "get it" about my billing.
 

#13
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My malpractice carrier told me years ago that they only cover claims where the insured charged a fee.
 

#14
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Pure Peace wrote:I will not take any of those on, unless they "get it" about my billing.


Family, friends, or others, I wouldn't take a client unless they fit this description. Articulated clearly and up front, I've never had this come up as an issue later...regardless of the nature of my relationship with a client.
~Captcook
 


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