Thrilling billing and hellish clients

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istock_Oleksandr Chaban
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For many accountants, this could be the best week of the year. After all the hurly-burly of the tax return season, there should finally be an opportunity to relax, even if one or two dilatory returns still need to be completed and submitted to HMRC.

Readers can reacquaint themselves with family members that they had almost forgotten, sit in front of the TV and remain awake for more than two minutes or start planning a much-needed break in the sunshine.

However, there should be a much more pressing issue for anyone who cares about their practice and bank balance.

Unless you and your staff are well-organised superstars, there has to be every prospect that billing got set aside throughout January and, in some cases, for considerably longer.

While creating invoices is hardly the most thrilling exercise, without doing so you will not get paid. Therefore, you and your staff should now be dedicating yourselves to churning out bills by the dozen and sending those out to what one hopes will be grateful clients save from penalties by your sterling efforts.

All being well, a significant proportion will pay by return, while others will put you into the normal run of settling bills.

In other words, this is how you get rewarded for going through the hell of December and January and coming out on the other side alive, if not exactly kicking.

Indeed, for some practices, 25 to 50% (or even more?) of the year’s turnover and perhaps all of the profit will be generated in one, relatively short, billing run.

Before entering too deeply into this process, it might also be worth considering some of the wider implications of completing tax returns for clients.

In many cases, the process will have gone as smoothly as could reasonably be expected, with data that was correct and complete provided at an early date. In others, there will have been a few minor hiccups, perhaps the old missing receipt or invoice. This is to be expected.

However, the generally accepted belief throughout the profession is that about half the work and almost all of the problems are created by a tiny proportion of clients who are generally also those that feel no compunction about arguing over fees and delaying payments.

This might be the moment to consider appropriate action, given that you and colleagues are probably feeling very tired and quite short tempered.

There are two possible courses of action, which are not exclusive to each other.

First, should you be charging a premium for additional work or late delivery of input paperwork? In reality, most accountants have quoted a fixed fee and probably not included appropriate clauses in their engagement letter, which would permit such action.

Secondly, are there any clients that are more trouble than they’re worth? This is the moment to ask since the feeling of desperation will still be fresh in the mind. Otherwise, six-to-nine months down the road you will almost certainly have mellowed and end up putting yourself through the wringer again with exactly the same nightmare clients as this year.

So, the game plan should be: evaluate, bill, sack and then turn off the lights and go on holiday.

About Philip Fisher

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07th Feb 2019 11:19

The invoice goes out with the tax return. No problem.

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to Red Leader
08th Feb 2019 10:18

Agreed. I couldn't believe that the article was suggesting that there was any other way.

When I joined my practice 20 years ago, the elderly (now ex-/deceased) partner used to send out draft accounts and tax returns and not bill until they were agreed, usually many months later. That was bad enough, but doing the work, agreeing and filing everything, and then billing even later is madness.

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08th Feb 2019 10:26

it says
Unless you and your staff are well-organised superstars, there has to be every prospect that billing got set aside throughout January and, in some cases, for considerably longer.

Well if you don't send the invoice out with the return, its crazy.....

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By BirdnCo
08th Feb 2019 10:28

Yep same here as Red Leader and as per our engagement letter, if our fees are not paid, we do not submit anything. This has not been a problem with any clients, even the "difficult ones". Been caught out in the past too many times.

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08th Feb 2019 10:48

I hope that you don't actually run your practice like that, Philip. I certainly don't run mine that way. Invoice with the work.

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08th Feb 2019 10:57

I really do not understand this nonsense re billing

90% of my clients are on a monthly standing order. this evens out my income, and stops me apologising to clients for asking for my money.
For appropriate clients my letter of engagement clearly states that we will take any outstanding fees from Tax refunds. These are always mandated to our Clients' Bank Account. Job done.
Without giving a hostage to Heaven, I have not had a bad debt within the last ten years.
Yes, some may run over on a "Time basis" but, so what within reason.
I enjoy a regular monthly income, the client knows what he or she is paying.
Yes, I do also raise pre-agreed fees for special one off jobs.
my clients pay me for a year's advisory service. Providing it is not illegal or immoral I do not mind helping to put up a storage shed for my money (True story). They know what the fee is for what service. Everyone's content.

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By Matrix
09th Feb 2019 09:10

Tax returns aren’t filed until our fees have been paid.

My first client always pays when he gets his tax refund but buys me a drink in the local so I can live with one exception.

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By JD
11th Feb 2019 16:53

Also invoice at the same time as sending accounts and returns out for approval. It encourages clients to make payment when they return signed copies for filing. We use Feb/March time to start tackling company accounts (deliberately timed years ends to spread the workload across the year), tax planning for the larger clients and cull one or two PITA clients.

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