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Chasing Clients for Information

Like many others, a fair amount of my time is being taken on chasing cients for information for their tax returns.

I would be really grateful for any ideas and suggestions how to change this.

Here are my ideas (please feel free free to comment/critcise)

  • Make it very clear in the Engagment letter that we will only ask for information once. Repeated requests will incur additional cost at £25 per request.
  • In the very early days emphaise the above  point to client.
  • Do not  chase, after the first request of information.again making it very clear to the client in the request for info email and Eng Letter
  • Find an automated email system that send repeated requests (finding a system is difficult!). Echo sign has been such a help in sending weekly reminders for clients to sign tax returns/eng letters etc.

It is such a waste to keep chasing.

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30th Dec 2010 16:07

Re-inventing the wheel

Accountants have struggled with this since the profession was invented and I can't see it changing anytime soon. 

I cannot imagine charging client for reminders will go down well and you may like to check the rules on this with your institute as I believe the £25 would have to represent the actual cost to you of chasing the information.

Automated Emails will be ignored just as standard letters are. Phone Calls tend to work better in my experience but are time consuming.

You do realise that no-one reads your engagement letter?

 

 

 

 

 

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30th Dec 2010 16:37

Couldnt agree more

i completely agree with Roland, charging £25 for chasing up info from a client will def in my opinion cost you more in lost clients. Also how many clients read the engagement letter, they tend to sign where indicated and i believe we are all guilty of such when we have to sign a document. Even if you verbally explain this to clients during your intial meeting, thats as far as it gos, i have for many years now have a number of clients that brings their books in for preparation between the 20th and 28th of january each year and expect it done, signed and delivered by the 31st! Even though i charged an additional fee of £50, explaining to them that i am saving them £50 for not paying the £100 penalty, it made no difference to their attitude.

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30th Dec 2010 16:57

No win situation

To some extent, you are in a no win situation. Clients tend to dislike being reminded (you say "reminded", they say "hassled") although they probably would dislike late filing penalties more.

A client badgered into bringing their information in "early", will likely expect his accounts/return more quickly despite usually having displayed no interest in this before.

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30th Dec 2010 17:07

one reminder

After the initial letter in April, I send one reminder which I do in October or November. Repeated chasing is ineffective in my experience.

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By SteveOH
30th Dec 2010 17:10

Quite a good question this time :)

I deal with the problem in an easy way - I don't let it bother me. I will send off emails at regular intervals requesting outstanding information and that's it. Other than in exceptional circumstances, I will not write or telephone. I deal with my clients mostly be email so I know that they are happy to use it and will respond to them. I get enough from them for heavens sake! Depending on how close I am to the deadline, I may add to the email that I cannot guarantee that it will be filed before the deadline.

If they get a fine - tough! If they leave me - tough! I am too old and ugly to bother myself with clients who take the proverbial.

To respond to your points in particular:

As the others have said, nobody reads the engagement letter. Only asking for information once does seem a bit churlish. Email requests only take a moment, especially if they are standardised. If charging £25 per request works for you, then fine. But I am not sure if anyone will pay it and you may lose clients as a result.I am all for emphasising to the client at every opportunity the need for dealing with outstanding matters promptly.May I refer the honourable gentleman to the reply I made earlier:)I use templates for sending such emails. Very quick and at least I can say to the client that I have sent 25 emails to the numpty in the previous 2 weeks! I love Echosign and use it a lot (thanks for recommending it, Adrian). But this is only useful when you are the stage where you require a signature.

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30th Dec 2010 18:12

Chasing clients

You will always get the 80/20 on this one, I bet a pound to a penny that its the same 20% of clients that you continually chase, who connitually promise but don't deliver, who continually give you the headaches, and continually leave everything right up to the last minute and then expect everything done on time.

To try to keep this to a minimum, educate at the initial meeting, define how the relationship will work and what you need (and when) from them to keep your side of the bargain, sit down with the bad ones at year end and explain that it's not working and that price will (not may) go up if they incur disproportiante chasing time, don't continually chase - keep your reminders firm.

Whilst some tolerance must be given (they are in business to do their business and many dont view these things as importantly as we do) if clients are making life difficult to do the job correctly and timely then they need to change their ways.

Let us know how you get on - this isn't easy!

 

 

 

 

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30th Dec 2010 18:19

Engagement Letters

I'm surprised that many think that clients do not read engagement letters - these letters are not just something that our institutes insist on, they are important documents to protect both sides.  It is equally important that the scope of the engagement is defined, the mutual responsibilities are defined, and that this is agreed and understood by the client (as far as is practical depending on the financial sophistication of the client).

I always insist that our engagement letters are explained by us and read by the client before they are signed.   I think that it is important not to hide behind small print and that this practice goes some way to quickly settle any potential disputes.

Having a dispute 5 years after being engaged and then pulling out an engagement letter that the client hasn't read isn't going to go down well.

 

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30th Dec 2010 19:19

Why?

Forget clients reading or understanding engagement letters - no one reads them and they are there simply to cover you in the event of a court case.

We chase ONCE by telephone.  If information is not received by December the client WILL pay penaties. I refuse to rush around like a headless chicken because some client is too idle to supply information on time.  You are their accountant - not their nursemaid.

The last time a client came in January insisting that his return was submitted by Jan 31st I told him I had no problem working late to save him £100.  I then handed him an additional bill for £500 payable in advance for my time in rushing his return through.  He decided to pay the £100 penalty, and has never been late since.

Every year on this site I see tales of people rushing around trying to submit returns by 31st and I ask myself the same question - why do you do it ?

 

 

 

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30th Dec 2010 20:41

Why do it?

It's called professionalism. Some of us just hate to miss a deadline.

Also I have booked and need a holiday every February so I don't want the work to fall beyond 31 January.

If a client, having had nearly 10 months to get their act together, can't be bothered I lose interest too, but up until then I will do all that I can to encourage them.

-- Kind regards Andy

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30th Dec 2010 22:11

Professional what ?

It's called professionalism.  Posted by andypartridge on Thu, 30/12/2010 - 20:41

 

The question is - professional what ?   At what point does it cease being professional, and start taking on the role of wet nurse.

By all means remind them, but there comes a point when they have to be responsible for the consequences of their own inaction.  And how would that affect a holiday in Fenruary?  Take it anyway, if a return isnt in by 31st Jan then March is every bit as good as February.

 

 

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31st Dec 2010 09:57

A few thoughts

@FirstTab - I recommend starting with this question: what makes it “seem” like the right thing to do not to you their information for their tax returns?

This will help you understand the client so you do not get annoyed by their behaviour. This is important because if you resent clients it compromises your service. My bet for firms who don’t bother supporting clients with reminder is that they have chosen this strategy so they don’t get wound up themselves rather than this being the most effective strategy.

Here are some strategies to think about:

Talk with clients. Be honest and explain the impact on your service standards. Let them see that sending you information late is bad for them. Use towards and away from and start with some fear. Produce a resource (report or factsheet) about all the problems and costs, not just higher accountancy fees.Explain that you can only accommodate a certain percentage of clients who leave things to the last minute and you have too many. Ask if they want to reschedule their work, pay a higher fee or would they prefer you to find them another firm.Create a branded emergency service; I hear plumbers where charging £300 an hour plus call-out. Is that right Jason?Use different types and styles of communication - try text and see what happens and give humor a go as well. You will be surprised!Use a Welcome Book as part of your engagement. Sack all of your clients one-by-one and re-engage them under new agreement.

Good luck.

Bob Harper 

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31st Dec 2010 10:49

Send a checklist

IRIS (and I daresay other programs) has a facility to print off a checklist showing the entries from last year's tax return in detail (interest by individual building society account, dividends for each company, etc.) as a comparative column and leaving a column for this year's figures.  It obviously cannot cover any new sources of income.

Before sending out a checklist, we check on the HMRC website that a tax return has been issued to the client.  Then, in a covering letter, we ask the client to send us the underlying paperwork rather than entering the figures for this year on the checklist, but it does serve as a guide to help the client assemble his paperwork.  In the covering letter, we also ask the client to give us the information by the end of October at the latest and warn him that we offer no guarantee that he will escape a late-filing penalty if we do not receive the information by the end of November.

If there is no response, we assume that the client is dead, has gone away or doing his own thing - we do not chase.  If the client responds, but we have reason to believe that information is missing, we ask for it by letter or e-mail once; if the missing information has not been received by early January, we prepare the return on the basis of the information that has been provided and send it to the client for signature with a questionnaire about any omissions and requiring confirmation that the tax return is correct and complete.  If the questionnaire and page TR6 come back signed, we submit the return as it stands.

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31st Dec 2010 11:19

Plumber

Bob - £340 an hour plus VAT plus parts!

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31st Dec 2010 15:27

EasyMail

“Make it very clear in the Engagment letter that we will only ask for information once. Repeated requests will incur additional cost at £25 per request.”

That’s contradictory

“In the very early days emphaise the above  point to client.”

Agreed

“Do not  chase, after the first request of information.again making it very clear to the client in the request for info email and Eng Letter”

I would prefer to chase

“Find an automated email system that send repeated requests (finding a system is difficult!). Echo sign has been such a help in sending weekly reminders for clients to sign tax returns/eng letters etc.”

I have EasyMail http://www.glocksoft.com/em/. I’ve only used it for sending an email when I went on holiday! I am planning to use it for newsletters and reminders. You enter the email address of all your company clients with a Companies House deadline of 31 December (this is my most common) in one list. Same with your personal tax clients. Save copies for future years. You send one reminder a month and delete any that give you the information. Yes, you are treating them like children but it doesn’t take a lot of time and they can’t really complain. Any strange deadlines or previous year tax returns it’s best to send individual emails.

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31st Dec 2010 17:28

A complete change of mindset is needed (on both sides)

A perennial problem and, in my opinion, one that will disappear as the pressure builds on accountants to deliver value and, at the same time, improve margins.  Why?  Because of increasing competition in the accountancy services sector and increasing expectations of clients who are already adopting new ways of working with their custoemrs and expect their accountant to do the same with them.

As the adage goes, the strongest or fittest will not necessarily be the ones who survive, it's the ones who are best at adapting who willl have the greatest advantage.  Accountants who are able to adapt and become more involved with their clients on a week-to-week or even day-to-day basis will automatically resolve the challenge of gathering information because they will already be playing an active role with their clients and already have access to the required information.

This is not be achievable using traditional systems because they don't allow transparency of information between client and accountant.  But in the online world, information and responsibilities are easily shared, which enables the accountant to more easily adopt the role of financial adviser and provide services that play a meaningful part in the client's business.

Collaboration is the key word here and it has the potential to dramatically change the landscape for accounting services.  I believe that it will be better for both accountants an clients.

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31st Dec 2010 17:45

5% surcharge

"And how would that affect a holiday in Fenruary?  Take it anyway, if a return isnt in by 31st Jan then March is every bit as good as February."

Not when there's a 5% surcharge for non-payment of tax. It's difficult to get the tax payable correct if you haven't done the work.

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31st Dec 2010 18:07

Thanks Peter

I was determined not to take the bait, so thanks for saving me the trouble.

-- Kind regards Andy

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03rd Jan 2011 08:39

Chasing clients for info

Sell out to Tesco Accounting Service - they will have a surefire way of being paid for any work they do.

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03rd Jan 2011 09:21

Surcharge

Not when there's a 5% surcharge for non-payment of tax. It's difficult to get the tax payable correct if you haven't done the work.

 

Posted by petersaxton on Fri, 31/12/2010 - 17:45

 

And your point is ?

If the client hasnt got the information to you on time - tough.  Any penalty or surcharge is their fault so let them pay it.

Sounds like you're letting the tail wag the dog.

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03rd Jan 2011 10:58

Simple point

"And your point is ?

If the client hasnt got the information to you on time - tough.  Any penalty or surcharge is their fault so let them pay it.

Sounds like you're letting the tail wag the dog."

So if a client brings their information to you on 02/02/11 you wouldn't do the work until after February?

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03rd Jan 2011 11:38

Correct

So if a client brings their information to you on 02/02/11 you wouldn't do the work until after February?

 

Posted by petersaxton on Mon, 03/01/2011 - 10:58

 

Correct.

Indeed anyone bring information to us in January is likely to end up with penaties.  They know our deadlines - we make it very clear - and if they don't comply that is their fault. I'm not prepared to have us running round like headless chickens just because a client is too idle to do their part.

 

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03rd Jan 2011 12:06

Headless chicken?

"Indeed anyone bring information to us in January is likely to end up with penaties.  They know our deadlines - we make it very clear - and if they don't comply that is their fault. I'm not prepared to have us running round like headless chickens just because a client is too idle to do their part."

I am considering deadlines. In the past I didn't want to because people would complain that I had got their data early and still left it late. Now I am very close to be able to start work on a client as soon as the data arrives so I plant to start a "charm" offensive in February giving reasons why data can be sent to me during April, May & June. Depending on what response I get I may well set deadlines.

I don't think you need to resort to headless chicken mode. In the past when I have had a lot of work to do in a short period of time I have found the best way to deal with it is just get on with it calmly and determined.

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03rd Jan 2011 12:22

.

 don't think you need to resort to headless chicken mode. In the past when I have had a lot of work to do in a short period of time I have found the best way to deal with it is just get on with it calmly and determined.

 

Posted by petersaxton on Mon, 03/01/2011 - 12:06

 

I seem to recall last year we had heavy snow in January (and probably will this year) making it dangerous to battle into the office.  I also recall people panicking because they had returns still to file.

I take the attitude that whether "headless chicken" or "calm & determined" there should be no reason to file Returns in January.  All information needed for 2010 returns should have been supplied by December and only unforseen circumstances should lead to any need to worry about 31st Jan deadlines.  We have a couple of ammendments to file, and one client who hasbt supplied information as he's in hospital (so an estimate looks like being filed), and that's about it.   

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03rd Jan 2011 14:05

Strict order of receipt

A lot of my clients haven't sent me anything yet so I am not making out I'm perfect.

If anybody asks me how I am getting on with their return I give them an idea of when I think I'll be able to start but explain that I do them in strict order of receipt - they understand what this implies!

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Some more ideas

Some interesting ideas (and disagreements) about a longstanding bugbear. It reminded me that Richard Murhpy wrote an article called Getting your clients organised for us back in 2005. I wonder how many people have put these sorts of ideas into practice?

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05th Jan 2011 03:39

I received this email yesterday: "Do you need anything else?  I’d like to finalise everything before the end of next week."

My reply was: "I had all your information on 13/12/10 so, including the Christmas and New Year holidays, I have only had your information for three weeks.

 I’ve been going through my clients tax returns in the order received. Unfortunately, a lot of people sit on the information for seven or eight months before giving it to me which means that it takes me longer to start on their tax return.

 I’ll only know what else I may need when I start preparing your tax return."

It's interesting how many clients expect you to know what is outstanding. I'm not going to do 95% of the work as soon as I get information so that I can tell them if I need anything else.

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05th Jan 2011 11:51

Change required

 I agree with a number of points on here but just to add my two pennies worth here goes. 

Firstly I believe that we as a profesison need to change delivering services to clients that change and improve their understanding. Online accounting systems etc. This turns us from paper monkeys to real advisors.

For those clients who are slow at getting information to you I have two tactics. The first is identify those that are repeat offenders. I increase their fees each year explaining that bringing books to me in the last two weeks of Jan means I have to work into the night to get them finished on time. 

Any client who brings in the last week is immediately given an £100 extra charge - same as the HMRC fine. Simply because if I did the work in my usual timeframes it would be late. 

Of course ultimatley we all want to earn a crust, and some are more prepared to put the hours in over Dec/Jan than others rightly or wrongly. Some clients never understand and never change, the key is to understand whether they are worth the effort. 

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05th Jan 2011 11:55

there is no perfect answer for the taxpayers

My experience over the years shows that most clients do not change their basic habits.

The good ones are annually timely, and accurate, with their data.Some are always running late.Clients do not, essentially, respond to reminders.You cannot please all of the people, all of the time.

Thus you have to create your own set of rules:

Set a deadline of November, for data collection if you can afford to do so.Send one firm reminder annually in July /August / September rather than a series of notes. Do not "Nanny" clients.  It does not work.Beware that for 2012 there really will be a £100.00 fine for latecomers, as the "pay extra tax to kill the Penalty " Option will disappear for January 2012.Thus one can implement a stricter regime for Autumn 2011.

 

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05th Jan 2011 12:30

Emails

I thought Peter's email was interesting, I would have suggested this:

Tuesday 14th December rather than leaving the client to make the first move

Thank you for your information to complete your 2010 tax return which arrived yesterday.

As explained in our Welcome book, it is out policy to acknowledge receipt of information so you know it is safe and to let you know this booked into the work program.

Unfortunately, I do not know if there is any missing until I process the information. I plan to start your work on Tuesday 25th January. This is within our eight week service commitment to start work but it will mean any questions or missing information will need to be supplied by return for there to be any chance of the return being completed by the January deadline.

I attach a factsheet about late tax returns and will discuss this with you after your work is completed. You will see the £100 penalty exemption is being removed and I believe tax investigations can be triggered.

At the end of the sheet you will see that I am now recommending we agree a program of works for your 2011 and subsequent returns or book you into our premium service which means I commit to do your work within three days of receipt.

Please acknowledge receipt of this email and let me know if you want to upgrade last minute now for 2010. If you do I will start the work immediately, the fee will be £(twice last year) on the basis of the same information as last year.

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05th Jan 2011 13:43

Categorise clients

"Beware that for 2012 there really will be a £100.00 fine for latecomers, as the "pay extra tax to kill the Penalty " Option will disappear for January 2012."

Has the SI been issued? I thought the legislation still required to be put into effect.

Bob and Pure have made interesting comments.

I expect to be up to date with work by the end of today. It has involved working long hours but now I feel really good about it. I am now planning to do work as soon as it comes in.

In February I am going to categorise my clients and decide which categories get what type of information requests.

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By nadia_a
05th Jan 2011 23:32

Get their attention straight away

Why not send them a text message? It seems to be the current trend and it is guaranteed to reach them straight away

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06th Jan 2011 00:02

Text didn't work

I tried that on 14/12/10.

I had to phone her yesterday to get her to come in and sign her tax return - she goes past my house every day!

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06th Jan 2011 08:24

Procrastinating clients

 £25 to sent reminders? Actual cost of checking file, drafting E-mail/letter, PI as if late they will still blame you, the worry. Its cheap! (You can charge storage fees for docs which you have to keep until they sign off. Its a try!)

Will it have an effect? Doubt it. They will argue the charge, still be late, still blame the accountants especially when the penalty notice comes in.

Answer? State clearly, verbally and in writing you will sent one reminder and not chase then relax with a glass of wine and when they eventually come in have that letter prominently lying on the desk.

I normally get an apology (sort off), and a promise they will improve. Like hell!

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