Sarah Offord
Chartered Management Accountant
Midas Accountancy
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When to raise my invoice...

When to raise my invoice...

I suspect a problem client is trying to delay paying me by faffing about.

The accounts have been completed and she was refusing to answer telephone calls or emails requesting confirmation that there are no outstanding issues with the accounts. I managed to get hold of her today (I had rung her mobile and she clearly hadn't recognised my number) and she admitted the accounts were signed off. As I made this job a priority over other clients and turned them around in 1 week as she had asked very nicely, I'm very annoyed that she has held me off raising by invoice by 2 weeks.

I just wondered at what stage everyone else sent client's their invoice for accounts preparation work? I have spoken to one local accountant who told me she sends the invoice with the final accounts for signing and will not file the accounts or ctax return until payment has been received. Also, one of my clients told me that their previous accountant would send out draft accounts with an invoice and the accounts would be automatically filed within 2 weeks if no further contact was made by the client......honestly they did do that, although I'm not sure how without a signature.

Any advise would be greatly appreciated.

Sarah aka Sir Digby....just in case you missed the anon post.....grrrrr

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16th Jun 2010 21:43

do you not know your client?

Some are rogues - get cash, weekly

some are stupid - get cash, weekly

some are idiots who will go bust - get cash, weekly

some are honest. Those you can wait for

some....

 

 

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16th Jun 2010 21:56

Advance payment

Most of our clients pay monthly, but we always insist on having received at least 50% before commencing annual accounts. If they don't pay monthly we ask for a 50% deposit.

We send the invoice for any outstanding fees with the draft accounts and they don't get any accounts, or records returned, until we receive full payment.

This may sound tough, but since we started this procedure we haven't had any bad debts (touch wood), therefore we don't have to charge good payers extra to make up for bad ones.

 

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16th Jun 2010 22:34

With accounts

They get the bill with the accounts and have 30 days to pay. Nothing is filed until paid for.

 

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16th Jun 2010 23:51

Bill them first

Hi Sarah (using your real name is a release...Honest)

With regard to your client, much will depend on your arrangements with her, either in writing or by custom (ie what you did last year) and I'd have no hesitation in suing her, clearly you have been unable to find her "better nature".

After years & years of experiences like this, we decided to turn things on their head and so we dropped time sheets, estimates and payments on account and now agree an annual quote for everything and send out the invoice for the forhcoming year's work in April/May and clients have the option to pay in 10 monthly instalments from then to 31 January.  Strangely enough a significant proportion can't be bothered to set up the standing order and so pay in 30 days.

This is a similar method to that used by many service providers, eg our IT support company, and it covers all compliance work as well as any contact we have during the year.  After tearing yourself away from the fear that clients will start calling you every day, it soon dawns on you that when they do call the ticking clock pressure has gone and they let go of far more info about what they are doing enabling you to do a better job and even identify additional work and fees.

Consequently we can see by May/June time whether there are going to be any payment problems and, in the majority of cases, we have yet to do any work.  Also, for the first time since I started, we have months of cash sitting on deposit which is a real relief and without WIP recording/monitoring or the normal credit control issues, we have more time to keep an eye on the bank account to make sure payments flow in as promised.

Yes, sound too good to be true but it only took me 27 years to think of it!

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17th Jun 2010 09:14

Monthly

Go for monthly payments...most firms that are doing new things have done STO and now have a DD facility.  This is great because if you do work outside the agreement you can bill £100 and get paid 7 days later.  If you are interested I can introduce you to a provider.

I did it on a pay-as-you-go basis because I position the service as all in with access to me monthly, use of bookkeeping software, technical support and a bookkeeping helpline.  Client's were very happy and so was I.  When I got a new client I set up a monthly payment from month one and bill for last years accounts so I ended up with negative WIP.

I'd suggest 10 months because it is easy to qork out and gives you two months to agree a new fee.

There are no rules, do what you want but lock-up and debtors reduce your ability to grow and I have never thought a client chooses an accountant to get extended credit terms and if they did I didn't want them as my client.

When I agree a marketing fee I break it down into milestones and get the first one upfront.

Bob Harper

Portfolio Marketing

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17th Jun 2010 09:18

Sarah?

There was me thinking you were Leslie! To me you will always be Sir Digby.

I invoice at the month end. If the work is unfinished at the month-end they get a progress invoice. Anyone pfaffing (seldom happens) would get their 'final invoice' and I would consider raising a further supplementary one if later issues from the client required adjustments.

-- Kind regards Andy

Edit - ah, worked it out now. I had the wrong m****!

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17th Jun 2010 10:31

Deposits

We go with a 50% deposit - if you have trouble getting that then you know its going to be craptastically hard to get the rest!  Invoice when accounts are finished, send with the accounts for signing off.  If you get the signed accounts back then they have definitely had the invoice, and as Dragon says, no filing until you have the dosh.

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17th Jun 2010 10:37

.

I find it bizzare you would send without payment. Thats asking for trouble. Its your main lever for payment.

We send the bill with the accounts, and if you dont pay they dont get sent, and clients are reminded of the fines that will shortly bit hitting them if they dont cough.

We dont do monthly due to the sheer admin of it (it seems to be making work for no reason), but we have a number on quarterly in line with VAT returns.

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17th Jun 2010 11:22

Monthly does not have to be difficult

I recommend that you look at Paypal's subscriptions feature.  If you ignore the terminology, what you realise is that this is an easy way to setup and manage monthly fee agreements with clients.

See: https://www.paypal.com/cgi-bin/webscr?cmd=p/xcl/rec/subscription-outside

Hope this helps,

Adrian Pearson
Top Accountants

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17th Jun 2010 11:44

He's repeating himself, repeating himself

Sorry folks but by leaving the bill till after you've done the work you are always at far greater risk than if you agree the bill up front, send it then give them X months to pay it off.

For those clients who bring in their info in the early months and get the accounts, tax return all done & dusted, they get a nice few month's credit, whereas for those who leave it to the last minute (ie the ones who traditionally are poor payers) then you've already had most of the money up front.

Yes, there will always be the early birds who fall on hard times and struggle to pay what they agreed, but that risk is there no matter when you bill.

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By mmladd
17th Jun 2010 13:07

What we do is:-

--We invoice when we send draft accounts out to the Client, the invoice is sent with the drafts.

If a Client faffs about if we require further info, and we have already spent some time on the accounts, we will send them an interim invoice for the full amount. We  usually get an immediate response.

 

Malcolm Ladd

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17th Jun 2010 20:19

Many Thanks for all the responses

We do normally have a review meeting with each client in which they would normally sign off the accounts an the invoice would be presented. I am too much of a girl to demand payment before leaving the premises (I do offer payment terms of 15 days so it would be incorrect to do so), but I find most clients will pay on the spot.

In the particular instance, the client had discovered the tiniest most insignificant misposting (between two expense accounts) in the accounts which she had asked me to correct. I did so and sent the final accounts to her. As I wanted to ensure she was happy with the final accounts and that there were no further issues, I sent the final accounts for review before sending the invoice. Not sure why she got different treatment. Maybe because she is a nightmare and I thought I might end up with more shitty emails from her (*sigh*).

Anywho, I was just wondering how clients felt about being told they needed to pay monthly having previously paid on completion? Am I likely to see a mass exodus?

Many Thanks

Lady Digby CS

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17th Jun 2010 23:18

Toughen up - for your own good.

I am too much of a girl to demand payment before leaving the premises (I do offer payment terms of 15 days so it would be incorrect to do so), but I find most clients will pay on the spot.

Lady Digby CS

 

Posted by Sir Digby Chick... on Thu, 17/06/2010 - 20:19

 

Why is it that so many accountants are afraid to ask for payment?  If you went into your clients shop and did your weekly shop would they let you leave on the promise that you'd pay them in a couple of weeks?  Would they hell.  So why should you treat them any differently. 

Get tough.  If they are not paying you then you really dont want their business anyway, so dont be afraid to bounce them into court if needs be.

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18th Jun 2010 10:50

Accounts payment

We normally send draft accounts out with our invoice.  In your particular case where it would appear the client is prevaricating we would send an interim invoice. Let's face it we are in business to make a profit and personally we find it is those clients who you help most who delay paying.

 

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18th Jun 2010 12:36

I'm with Paul

I do the same as Paul Scholes but over 12 months reflecting that we work for them all year round. It also means the standing order can keep going (needs amending if fee increases). I've done this from the start with no problems and clients transferring from other accountants are also used to monthly payments.

Clients who don't want to pay on these extended but convenient credit terms pay me on 7 days from work starting (ie bringing in their books).

Nobody has refused yet so just ask.

Della

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