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Client questioning invoices

Client questioning invoices

Several months back I had setup the accounting software for a new shop and integrated with their till system. There were other accounting related tasks.   

I  have worked with them in the past and had a very good relationship with  them.  I have done premlinary work with them as well without charge. I did't know how long the work would take hence charged an hourly rate.  

I billed them on a monthly basis and since there were a new business I had give them time to pay.  Suddenly they went to a new accountant without informing me.  After sending the invoices to them several times they are questioning the charge saying the new accountants would have charged a lot less for the work and onlly accepted the hourly rate as they didn't have a benchmark against.   Invoices are around 6 months overdue.

I have tried to be fair and not bill all my time as they were regularly sending messages etc since they do not understand anything about accounting/tax.  The engagement letter and detailed invoice has been quite clear about the charging on an hourly rate.

This is the first client that has ever questioned my fees and have a dilemna reduce the fees and take the hit which would be annoying so I have gone out of my way to help them or possibly takem the to court which is just hassle and time consuming with having to gather all the evidence.

 

 

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09th Nov 2018 12:24

If they accepted the hourly rate, and you billed them based on that, and can account for all the hours you're billing them for, then it would appear they just don't want to pay.

You have no obligation to reduce your fees and provided you have evidence to back up the assertions made can pursue it through the usual legal means, if it's worth it to you to do so.

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09th Nov 2018 13:18

Tough one and, at the end of the day, it's a judgment call how far you take it.

But I'd probably pass it to the Court. After all, the defendants may not challenge it. They may not feel it's worthwhile either.

If they do, you can always offer a settlement out of court. Or not. Depending on your perception of the strength of your case.

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By norstar
09th Nov 2018 13:32

We have a clause in our Engagement letter than we'll carry out work up to a certain value unless they request a lower limit. Make sure your Engagement letters are watertight on fees and then in my view, why would you not enforce the debt if you feel there's a realistic possibility of extracting the money if awarded it. You've entered a contracted relationship, done the work, so you deserve it!

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09th Nov 2018 13:58

Did they let you carry on doing this work *after* they'd received the first invoice. It strikes me that the very latest time they should be querying this is straight away, the first time they receive one of these invoices for extra work. Waiting for months and only then querying the charges is a nonsense.

It is easy for a new accountant to claim that they wouldn't have charged for the extra work. It is a cost-free claim for them to make, that they can make without evidence.

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to TomMcClelland
09th Nov 2018 15:18

Yes they did crib over one invoice a few months ago then heard nothing since so I imagine they just decided to move to new accountants at that stage

Anyway they had agreed to pay a couple months ago so the case seem clear cut. However they are now saying that their new accountant have picked up on a couple of things. I just don't like the fact the ex client are just ungrateful as I have tried my best to help them in my own time (free of charge) over the years and at late night.

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09th Nov 2018 14:27

They are asserting that since I have not been used to the software admittedly it the first time I had used it that and maybe it took a few hours longer than expected. Also they are saying I should have billed on a fixed price basis like their previous accountants who have done the same on another shop they have purchased.

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to GlobalTax
09th Nov 2018 14:35

None of this is relevant so long as you billed them on the basis you agreed. They have moved on and are trying to wriggle out of paying you. No need to be nice to them.

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to GlobalTax
09th Nov 2018 15:35

GlobalTax wrote:

I should have billed on a fixed price basis like their previous accountants .

Who they have also broken up with?

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09th Nov 2018 14:32

Make them a final offer of, say, a 5% goodwill discount if they pay within 7 days or the offer will be withdrawn and you will initiate county proceedings. Don't mess around if they still don't pay, just go ahead and do it.

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By SXGuy
09th Nov 2018 17:12

Could always use the late payment legislation, charge interest and late payment fee, then after a few months of that, issue court proceedings.

They agreed with the way you billed them, their argument is irrelevent. They just don't want to pay. Don't be nice I wouldn't.

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09th Nov 2018 20:16

I have regularly worked for free when I should have paused, reflected and told client due to things I didn't previously know about it would cost more.
It's not the fault of the client that I didn't charge them a reasonable price for work done.
So it's no good moaning about free work. You should be in charge of what the client pays, and however nice they are, cash up front is what you need in every case (note to self).

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09th Nov 2018 23:17

I have been terribly lenient, nice and patient to a rather ungrateful client . It it does end up at the small claim court so be it - it will be learning experience for me too.

They already offered to pay the amount earlier and once they realised how cheaper their accountants could have done it for they started to grumble about some minor errors and how I didn't integrate quickbooks with their till system well and that it took more time than normal since I was used to another software system

Only concern is that while I have proof of most of the work undertaken (though not the duration). I don't have 100% evidence.

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By Alex_T
to GlobalTax
12th Nov 2018 15:06

They are taking advantage of your good nature Global Tax. I would try Andy's suggestion of offering a 5% discount if they pay within 7 days, however, if that doesn't appease them, you have no choice but to go down the legal route. You must stand up for yourself. They agreed terms and you billed them accordingly. End of story! Best of luck!

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to GlobalTax
12th Nov 2018 15:12

You've spent more than enough time talking about this - time better spent on action. Now go and do it and I'll be delighted to hear that you have shown a little courage and as a result they have paid.

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