It was suggested that I write a little bit about when to pay for accounting services.
In our office there are generally two types of clients: Monthly business clients and year-end clients. Most of our active clients run businesses and pay us monthly for work based on the work we complete for them regularly. Some of our larger clients are on monthly retainers. Some businesses are so small that they really only send us information once a year around tax season.
An example of small client would be an individual who owns a 2 family rental property. This type of client can send us 12 bank statements in January because each monthly statement for the prior year may reflect only a few deposits and a few disbursements.
So when are fees due?
Accounting fees for taxes are due upon receipt in our office. Which means we expect our 1040 clients and once a year business clients to pay when tax return services are rendered.
There are some clients whose tax work even though once a year, exceeds $2,000. For new clients we usually ask for a deposit in advance. This is because we need collateral from experiencing some clients withdrawing work after we accomplish some, most or all of it.
When our firm first started in November of 1989 we pretty much took any client that came our way. Starting a new business does not mean you have to take EVERY potential client. And this is an important lesson that most people don’t learn until years into a business. These days, we are fairly picky about new clients and certainly need to get to know the new client a bit before formally accepting them. You can’t please everyone; you need to know that in business. You want to steer clear of known problem clients or potential clients that seem to exhibit indicators that they aren’t easy to work with.
In never ceases to amaze me the number of new clients that expect or request free services or discounted services based on their future growth and sales. Our answer is NO.
- Your accountant is your personal and business advisor. We are trained in budgets, financial statements, taxes and general business knowledge.
- Accountants are not financial institutions and certainly should not lend money to their clients. Lending money to clients impedes the rational thinking as an independent third party. Which is why accountants are not allowed to do a succeeding audits for a business who hasn’t paid the prior year audit fee.
I’m in business 25+ years. At this point I have lost enough fees for allowing longer payment periods and have been disappointed by clients who promise to pay and then go out of business. At this point in time, I can tell a good business model from a losing business model and protect my firm from customers who think one day the losing model will produce results.
Your accountant is perhaps the best guide to protecting your assets, growing your business and acting as a springboard for questions and decisions you need to make. You want your accountant to be eager to take your calls, answer your questions and dispense winning advice. Treat your accountant with dignity and respect, including timely payments, and you will have a trusted advisor for life.