Tax Prep Fees still not Paid

[ETax847]

I have a client that still has yet to pay his 2017 tax prep invoice.  Does anyone have any tips or tricks to collect on clients who drag their feet when it comes to paying their fees?

Thanks!

[Roberts]

Have you resent them a bill?

About the 3rd mailing I add that if payment is not received within X days  - the account will be sent to a collections agency. I don't send it but it gets the attention of those who suffer from distraction. If they don't pay, I assess it next season and demand payment for delivery. If they don't come back - I consider it a loss.

[TaxCPANY]

Call to offer to accept immediate, partial payment -- sounding solicitous about his/her current cashflow problem -- try for definite schedule of remaining payment but let it remain vague if client sounds reluctant to commit.  After another month email and call again, if his/her better nature hasn't triumphed.
I probably spend too much time collecting from people -- e.g., I have a standard over-30-day-due text to paste into emails, and I extra-scrutinize certain invoices before sending those to a dozen folks from whom I expect static -- but in the end collect very nearly all I bill.  I've even had a guy suddenly pay after three *years* of no responses.  Good luck.

[Possi]

 I have a few who won't pay until next year, but I'm slowly firing them. I really do hate begging to be paid. 

Once, when working for a small tax and accounting office, I had taken over the bookkeeping for a mechanic's business. I asked him where his "accounts receivable" info was. He said he didn't know what that was. So, I told him that was the account with details on clients who owed them money. 

He looked at me like I didn't have a head on my shoulders. Then he said, "Nobody owes me money. If they don't pay me when the work is done, well... I have their CAR!" 

So, if a client can't afford to get their taxes done, I do hold payments until their refund is deposited. But, I AM holding payments. That way, I have very few outstanding.

[JohnH]

At the bottom of my statements, I enter the following verbiage:  "Pay Pal available:  We can send you a statement via email which you can pay via PayPal if you prefer. Just call  nnn.nnn.nnnn  or email me at xxxx@xxx and I will follow up.  If you can't pay all at one time, you can make partial payments." 

If they use PayPal, I just increase their fee the next year by double the PayPal transaction charge. If they don't pay, I forget about them. It was worth the fee to get rid of them. If they pay via PayPal  but don't come back,  it was worth the PayPal transaction charge to shame them into going somewhere else.  It's silly to have to do this, but sometimes it works.  I even have one client who earns over $250K but pays an average annual bill of just under $500 each year by sending me 2 - 4 PayPal payments.  Some people just live their lives this way. You're not going to change them.

[Jack from Ohio]

I do not transmit, nor give any of my work to the client, until paid in full.  I accept all types of payments.  April 15, comes the same time each year.  They can't do the grocery store, electric company, clothing stores or restaurants that way.

No tickie, no laundry.  PERIOD.

[Bart]

On another board there was a thread similar to this.  One guy over there suggested sending a letter to the client stating if they did not pay they would contact the IRS and ask to be removed as paid preparer.  They also pointed out that that would cause the IRS to take their return out of the usual processing routine and could possible cause their return to be reviewed more closely.

[Jack from Ohio]

52 minutes ago, Bart said:

On another board there was a thread similar to this.  One guy over there suggested sending a letter to the client stating if they did not pay they would contact the IRS and ask to be removed as paid preparer.  They also pointed out that that would cause the IRS to take their return out of the usual processing routine and could possible cause their return to be reviewed more closely.

If you don't send it, there is nothing to remove.  The delay gets longer and longer.....

People play our sympathy, and I have sympathized enough. (as I pay my electric, gas, water, trash, mortgage, phone & cable bill)

[JohnH]

Over the years, I am certain I earned more by extending credit that by having a firm policy against doing so.  I'm convinced that the few losses were more than offset by the additional revenue, especially at times when I was building my business.  I've always tried to let my business judgement take precedence over emotions & ego, and this is certainly one of those areas where it's easy to get the two mixed up. 

Now that I'm approaching retirement, my attitude is more along the lines of "Rather than work for free, I'd just as soon take the time off."   

[Catherine]

We tend to have a few who forget the checkbook (or wallet) and send a check once home.  If they forget, we send email reminders with the bill attached.  However, when gearing up for the new year we will occasionally find one or two who slipped through the cracks.  Those people get our welcome packet with a note that NO new work will be started until the prior balance is paid.  

Over twenty years, I've only had a few people stiff me, and for all of them I was glad to see them go.  Although one lady came back almost ten years later, hoping I had copies of her daughter's adoption papers that had been lost (burst pipe? something; don't recall).  She still owed $150 (a partial pay who stopped).  I promised to look after she paid and I had payment through paypal in five minutes.  *And* I found the adoption paper scans, too.  She was thrilled.  But I would not take her back as a client!  (Not that she asked.)

[JackieCPA]

I'd say charge finance charges every month that they don't pay. We have a lot of clients here that as soon as they realize they are charged finance charges, they pay quicker.

[schirallicpa]

Over 19 years doing this as a sole proprietor and I have sent 2 accounts to collection - which was ineffective as well.  We "usually" won't allow the tax return to leave the office, physically or electronically, until the bill is paid.  But there's always someone who somehow takes advantage, and they are the ones you will never see again anyway.  Never lost sleep over losing a client, really....