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Source: Partner Advantage Advisory
CPA can’t afford to act like bankers. Here are some things you can do to alleviate cash flow problems caused by poor collections:
- Check your potential clients’ credit ratings.
- Determine the reason a new client is engaging you, and whether it paid its former accountant on time.
- Your engagement letters should clearly state your billing method and payment terms, and describe the deliverables the client should expect.
- Invoices should give details about the work being billed. “Conference call” is an inadequate description. Give details on what was discussed in the conference.
- WIP should be billed monthly.
- Billings should be generated by non-partners, if possible. Invoices will be sent sooner and the cost of preparing them is reduced. Collections should also be handled by non-partners.
From Partner Advantage Advisory, November 2005, p. 8. Hudson Sawyer Professional Services Marketing Inc. www.hudsonsawyer.com. Subscription $279 per year; single issues—$25. Orders 800-945-6462 |
