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How to Keep it Convivial When Collecting Client Fees

For many accountants, managing client relations can be challenging. It’s important to strike a balance between keeping clients satisfied and ensuring timely payment of fees. If you mishandle accounts receivable, you risk alienating clients. On the other hand, if you’re too accommodating, clients may take advantage of your willingness to please and delay payments, impacting your firm’s financial health. To navigate this delicate balance, consider the following tips to maintain client satisfaction while also ensuring prompt payment of fees.

Have the right person on the job

If your company has a team dedicated to collections, it’s crucial to have someone skilled in these interactions handling the job. This is not a task for just anyone. One negative conversation can result in losing not only one client but also their influence over existing and potential clients, leading to a wave of negativity toward your firm.

Moreover, having someone who excels at navigating sensitive conversations provides an added benefit: you can observe their expertise and learn how to handle similar situations on your own.

Don’t set the problem aside

It can be tempting to waive dues, especially when your firm is financially stable. You may believe that this gesture will improve your client relations and show them that you are understanding and helpful during challenging times. However, relying solely on fee waivers as a way to assist clients can lead to unintended consequences.

What may initially be seen as a kind act of generosity can quickly become an expectation from your clients. This puts you in the position of having uncomfortable conversations every month, instead of addressing the issue upfront.

Instead of offering fee breaks, consider alternative ways to support clients who are facing difficulties. For instance, you could provide them with a complimentary service they haven’t utilised before to help them regain stability. This approach has an added advantage: once they have recovered, they will attribute their newfound stability partly to the free service and will be willing to pay for it in the future.

Dig deeper into the numbers

To avoid having challenging discussions about accounts receivable, it is crucial to ensure that your clients are not in a situation where they feel the need to request leniency. While it’s worth noting that there may be clients who consistently try to evade fees regardless of how well their business is performing, you can gradually develop strategies to identify and filter out such troublesome individuals.

One way to support your clients’ financial health is by closely monitoring their overall financial standing, beyond the specific services they have requested. By promptly addressing any warning signs that arise, you can step in as a hero and assist them in getting their business back on track, ultimately enabling them to meet their payment obligations on time.

Additionally, taking this proactive approach benefits your firm’s growth. Even though it requires extra effort at the beginning of the client relationship, positioning yourself as a financial expert and a trusted partner in their business welfare establishes your authority. The more effectively you help clients navigate potential pitfalls and prevent red flags, the stronger your reputation becomes. As a result, they are more likely to seek your services for future engagements.

Put a plan in place

Having clear workflows in place can be extremely helpful when dealing with uncomfortable situations. By establishing a plan for fee payments, reminders, and phone conversations with clients who owe you money, you can navigate these situations more effectively. Communicating these processes to your clients from the beginning of your relationship can alleviate any personal tension that may arise when sending reminders or having phone discussions. Your clients will understand that it’s simply part of your payment collection system, which can greatly diffuse difficult situations.

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