7 Reasons Your Accounting Clients Don’t Pay On Time

Understanding Your Clients’ Needs

In every accounting firm, maintaining cash flow is an ongoing battle – especially when your enterprise clients don’t pay their bills. Whether a client is having a tough time with their finances or just refusing to pay for your services, outstanding balances make it harder for your firm to serve them and complete new work.

From the first client touchpoint to the final notice about a past-due account, it’s important to examine why your accounting clients are struggling to pay. Once you know the “why,” you can improve your internal processes and avoid future issues.

Why Do Accounting Clients Have Trouble Paying Invoices?

1. Disputes over payment

When a client brings up a billing dispute, it’s tempting to assume that they’re trying to get out of paying. Of course, disputes happen all the time in the CPA world. If you take the time to listen to your client’s concerns and start the follow-up process early, you’ll increase your odds of getting paid.

2. Disorganization and under-staffing

Without the right staff and resources, businesses can get bogged down in administrative processes and fall behind on outstanding payments. If your client is just a little busy or understaffed, try offering some extra advisory support. If your client is dealing with an extremely disorganized process, it might also be worthwhile to provide them with more payment options.

3. Lack of communication

It’s not easy to remind an important client that their account is overdue. Even so, you should strive to use clear communication from the minute an account falls behind. Before initiating the collections process, try to send clients at least three reminders through the mail and over email, along with multiple call attempts. From there, you may get a better picture of the problem.

4. Cash flow issues

Is your client bracing for tough times? CPAs are close to their clients’ financial situations, which means you can uncover this fact early on and intervene. By breaking down a larger job into smaller portions and billing over time, you’ll alleviate your cash flow without disrupting your client’s business.

5. Lack of urgency (on both sides)

If you take too long to do the work for your client, it shouldn’t be a surprise when the client doesn’t feel a sense of urgency about paying. While your client is obligated to pay you, CPA firms should also take accountability for delays and prioritize speedy turnaround times.

6. Mistakes in the billing and scoping process 

No matter how well you’ve scoped out a job, it’s always possible to make mistakes on the final invoice. Before reaching out to your past-due client, perform a quick audit of their account and confirm that they’ve gotten accurate billing information.

7. Client dishonesty

Unfortunately, not all clients will be honest about their reasons for delinquency. That’s why it’s important to pay attention to any red flags during the initial scoping and interviewing process. If it’s clear that your client has been dishonest about their budget and the account is more than 90 days overdue, it might be time for legal action.

How to Get a CPA Client to Pay an Invoice

Woman paying bills on laptop in home

Once you’ve identified the source of your client’s payment issues, it’s time to get them to pay down the account. At QuickFee, our financial experts have decades of experience in the tax and accounting industry, and it’s our mission to make your life easier, with a range of easy online payment solutions that we’ve created to meet the needs of CPA and tax firms. When you’re not getting paid on time, QuickFee makes it simple to give your clients more options, including fully-funded payment plans.

4 Steps for Getting Paid Faster

Here are a few of the most important steps you should take to reduce your receivables:

  • Bill each client after the work is completed. When you send invoices weeks after work is done, your client’s perception of value will naturally decrease. If there are any organizational issues, delays, or errors during the payment process, this can also invite additional scrutiny about your invoice. In our experience, billing on completion has a positive impact on cash flow and creates a real sense of urgency on the client’s side.
  • Make the payment process simple. Simplicity is your friend at every stage of the billing process. A central online payment portal doesn’t just project a professional image for your firm: It makes it easier for your clients to pay. At QuickFee, we offer custom online payment portals that accept both ACH and credit card payments. We can also get your portal up and running in less than 24 hours – and at no upfront cost to you.
  • Provide interim billing solutions. Ease the tension with your accounting clients by providing interim billing solutions. Even if you can’t offer your client base a lending service or payment plan right now, consider billing them in installments rather than asking for the full payment upfront.
  • Pay attention to the rules of debtor management. At the end of the day, effective debtor management comes down to active client engagement. That’s why it’s critical to assign someone to “own” the relationship with every client (preferably a partner) and follow-up as soon as the account falls behind. This helps to make it clear that paying late is an unacceptable outcome. If the client doesn’t respond to your best efforts at clear communication, then you can progress to calling in the experts.

We invite you to contact QuickFee today to discuss which payment and fee funding options will work best for your needs. We’re here to help!

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