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Getting clients to sign up to instalment payments

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I'm having difficulty getting current clients to sign up to monthly or quarterly DD payments - Gocardless. 

Many of mine have been used to annual payments and say they want to keep it that way. So how do you persuade or do I just say 'I'm putting you on instalment payments whether you like it or not?

Or do you offer a discount as an incentive?

 

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By spilly
29th Mar 2021 13:10

We sell it as helping their cash flow. Means they don’t end up with a tax bill and our fees at the same time.
All new clients are offered monthly or quarterly options; most go with the monthly one.
Yes, the odd client will want to pay annually but it’s a ‘no filing before payment’ rule unless they have been with us for yonks.

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By I'msorryIhaven'taclue
29th Mar 2021 13:28

Some of ours just won't have it, either.

But I can understand that. I too dislike having random instalments taken from my account for things I prefer to pay for in one lump: electric, car insurance, tv licence, water rates... even my optician tried signing me to a monthly scheme that provided me with a stream of unwanted contact lenses.

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By Paul Crowley
29th Mar 2021 13:21

I have tried with a few old clients and met resistance
Gave up on older clients

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By Mr_awol
29th Mar 2021 13:35

I tell them it's entirely up to them and i don't care whether they do or don't. I also emphasise that we aren't a subscription service and if they leave then I'll send a final bill and there will be a balance due to or from them, so there's no risk or reward either way .

The vast majority of our clients pay by either Standing Order or bank trf so the occasional bad debt is more than covered in the savings we make by not using GoCardless or similar services.

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By paul.benny
29th Mar 2021 14:04

You don't say what services you want your client to pay monthly for.

If it's book-keeping, payroll etc, then fair enough - payments are aligned with work done; if it's annual accounts and tax filings, then I probably wouldn't want to pay monthly in advance. Not only am I paying before you've done anything, I lose all leverage if there is any dispute.

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By Mr_awol
29th Mar 2021 16:57

You also expose yourself to losing out.

We have always kept a decent level off cash/reserves so, arguably, there is a lower risk to our clients of paying us up front. Some practices local to us offerign gold/silver/bronze subscriptions are barely solvent. No way I'd be paying them 9-12 months in advance if i was mr or mrs client.

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By SXGuy
29th Mar 2021 16:28

I charge monthly for on going work. Bookkeeping and vat, everything else yearly.

Never asked but would imagine most small SE clients would prefer paying yearly.

Might all change with Mtd though because they'll either want to pay monthly or they'll be billed a year upfront.

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By Mr_awol
29th Mar 2021 16:55

Agree with all but the last line. Why would they be billed up front under MTD? Surely the default move would be to quarterly (plus YE update, so in fact monthly makes good sense).

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By SXGuy
29th Mar 2021 17:08

Maybe I didn't explain properly. I meant if they still want to pay yearly they'd be billed up front.

Of course if they wish to pay monthly or quarterly they can.

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By Mr_awol
29th Mar 2021 17:16

Makes sense. In that case i agree completely, and will be doing the same, whilst still offering advance SOs if people want to for their own cashflow smoothing.

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By FCExtraordinaire
30th Mar 2021 10:37

I charge monthly for most clients as they are generally accepting when I say that there is payroll to do monthly, the annual return, monthly book-keeping, CIS returns, etc and that it means the accounts are paid for without a big bill.
Older clients have been a bit more resistant but its a no filing without the fee here, unless I have worked with them for a considerable time. It's straightforward bank s/o here too and 30 day notice period.

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By houseboss2
30th Mar 2021 12:49

Before I retired from Full Time practice, I decided with larger clients that I would simply divide the final fee by ten and they would pay over the ten months from the invoice by standing order. (Virtually all accounts - no book-keeping
services.)

We were in a fortunate position to pick and choose which clients to make this available and to my recollection, did not have one problem.

The new firm on takeover also decided to adopt the same method and have found this to be successful.

Period of cashflow hit, but is more than made up for by less administration and once the initial period has drifted by, it works a treat.

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By peter morgan
31st Mar 2021 15:08

Ideally you should be working with clients that value your input on at least a quarterly cadence, ideally monthly. If not, that's your choice and so is how you bill. If you can get clients on monthly/quarterly management accounts, or cashflows or VAT reviews or bookkeeping then bundling in the year-end accounts into a fixed fee, monthly billed is far easier. Bill when the value is delivered is the way, and if you are doing the monthly/quarterly stuff the year-end work is far easier, as you have delivered the value (cleaner records) along the way. Try offering clients a discount for moving to monthly, give them options. pay for the discount by loading the fees for the bad debt risks (annually billed in arrears).

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By peter morgan
31st Mar 2021 15:08

Ideally you should be working with clients that value your input on at least a quarterly cadence, ideally monthly. If not, that's your choice and so is how you bill. If you can get clients on monthly/quarterly management accounts, or cashflows or VAT reviews or bookkeeping then bundling in the year-end accounts into a fixed fee, monthly billed is far easier. Bill when the value is delivered is the way, and if you are doing the monthly/quarterly stuff the year-end work is far easier, as you have delivered the value (cleaner records) along the way. Try offering clients a discount for moving to monthly, give them options. pay for the discount by loading the fees for the bad debt risks (annually billed in arrears).

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By peter morgan
31st Mar 2021 15:11

Ideally you should be working with clients that value your input on at least a quarterly cadence, ideally monthly. If not, that's your choice and so is how you bill. If you can get clients on monthly/quarterly management accounts, or cashflows or VAT reviews or bookkeeping then bundling in the year-end accounts into a fixed fee, monthly billed is far easier. Bill when the value is delivered is the way, and if you are doing the monthly/quarterly stuff the year-end work is far easier, as you have delivered the value (cleaner records) along the way. Try offering clients a discount for moving to monthly, give them options. pay for the discount by loading the fees for the bad debt risks (annually billed in arrears).

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By Hazel Accounts
06th Apr 2021 12:41

I use standing orders not direct debits as free! My client's are pretty good at setting them up and most of my Company clients pay monthly this way (except a couple that have been with me ages before I started this).
For new clients they are very much encouraged to pay by STO and if I do ongoing work eg VAT/payroll then I more or less insist and so far no one has objected. I do offer a small discount and cash flow advantages work for both.
For annual SATR only then I just do a bill once a year when I do the tax return as I feel that's simpler.

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By peter morgan
06th Apr 2021 17:27

Match the service delivery with the invoicing. Deliver services quarterly, minimum, then bundle in the year end work. Move on clients who won't engage quarterly.

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By CardiffAccountant
08th Apr 2021 16:31

I have been taking monthly payments for the past 8-9 years, and have only ever had one or two show any resistance.

I make light of the whole matter.

'Mr Client, all clients now pay on a monthly basis. I suggest you do this, otherwise, when the time comes, I shall be presenting you with you tax liability, and then to make matters worse, I shall be presenting you with an invoice for the pleasure of telling you what the tax bill is!'.

'I think you would find it better to pay for the (tax return, accounts, etc...) over the next 12 months, and then at least you know that bill is out of the way'.

Of course, should a client come to me and needs the accounts/tax return prepared there and then, then I charge a lumps sum for the initial work, and then monthly for the future work.

Seems to work for me - and of course, I then have a good, steady income.

Hope this helps.

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