Accounting Practice Management

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Does the Location of My Accounting Practice Matter?

If you want to develop a high quality clientele gradually over time, the location of your office matters.  Ideally, you will want an office location that is near businesses that you’ll ideally want to attract into your practice.  In other words, if you locate your practice in a glitzy part of town (Wilshire Boulevard, Park Ave, Michigan Ave, etc.), you will attract businesses and individuals in that immediate area.  If you locate your office in a suburban location, make absolutely certain the location has a population large enough to support your growth goals and demographically, it matches your ideal client.

While your accounting practice does NOT need a retail office space with walk-in traffic, the physical location does matter in today’s digital world.  In other words, when someone is searching for a CPA or accounting firm near their business location, you will want your accounting firm to be located nearby because most business owners “feel” that they need an accountant nearby in the event of an emergency.  Perception does matter.

By this, I mean that you can be located on a second floor or third floor of an office building to avoid paying retail office space pricing but the physical location should be near the businesses that are in your target audience.  Also, the location should be near the center of the city.  If you want to be towards the top of the list on Google/Bing/Yahoo when someone is doing a search, you need to be physically near the location the searcher requests.  With geographic targeting capabilities improving all the time, it is becoming far more challenging to dupe the search engines if your actual location is not in the city being requested.  In other words, you can’t claim to be located near Times Square in New York City when you are actually located in Staten Island or New Jersey.  Yes, I understand it is relatively close in miles (from your perspective) but the prospect wants a firm near Times Square, not someone in Yonkers.  The days of saying you are located downtown when in fact you are 8-15 miles outside the city are over.  And if you are successful duping the search engine, the prospect will eventually find out and dump you before you get to establish yourself as the trusted advisor.

With the explosion of smart phones and tablets, increased sophistication of search engines, combined with prospects becoming more adept at searching, the location of your accounting practice is become more and more important.  Location matters now more than it has in the past.

How to Fire a Client

There is perhaps nothing more unpleasant than firing someone, yet you can’t make a business case for keeping an employee on board if that person isn’t doing his or her job. At the end of the day, the company – and most likely the employee – will be better off if he or she is someplace else.

We’re all conditioned to this scenario in the workplace and most of us have had many years of experience reacting to someone being fired. Why is it so hard, then, when you have to fire a client?

fire-a-clientSevering the relationship between you and your client is even more difficult when you like the client. Nine times out of 10, unless your client commits a crime, there’s really no reason why you should fire a client, right?

Wrong. Once you look at what a problem-client is costing you in terms of money and resources, not to mention stress and angst, there are probably more reasons for letting a client go than there are for keeping that client. Nevertheless, some thought must be given to the “why” and “how.”

Three Primary Reasons to Fire a Client

There may be more than just three reasons to sever the provider/client relationship, but through my years of work with accountants, it boils down to percentages, unethical behavior and lack of interest.

  1. The client takes up too much non-billable time. By far, this is the number one reason to let a client walk. Most of us have heard of the 80/20 rule in which we spend 80% of our time on the bottom 20% of our client base. To put it another way, the time you’re spending with a client often monopolizes your non-billable time. Sure, you could make it clear that you are going to bill the client for each and every phone conversation, e-mail exchange, text (yes, even texting) and other interactions, but that isn’t really realistic.  These kinds of clients aren’t adding to your bottom line, and without fail, you will come to resent the time the client is taking up. In a profession where it’s sometimes hard to measure a return on investment, you definitely can determine if the time you spend with a client isn’t adding to your bottom line. As a result, it’s far better to get rid of the bottom 20% of your clients so you can focus on the remaining clients who will generate more revenue – and bring you more referrals.
  1. The client withholds information or wants you to do something unethical. If you find your client is not being honest with you about a particular situation or withholding valuable information that enables you to do your work in the most ethical, legal manner possible, it’s time to part ways. Asking for a questionable deduction on a tax return is one thing, but hiding assets without your knowledge, for example, is another matter. You cannot afford to damage your reputation when a client who has the potential to do harm to himself, and in turn, to your practice.
  1. The client does not want to be helped. As odd as this might sound, we’ve all had clients who did not want to be helped. The client did not want your professional counsel and expert assistance, and will neither accept your advice nor respect your intentions. It’s time to find clients who will benefit from your professional experience and knowledge. You’ll feel much better about your business acumen, not to mention the inherently altruistic factor of helping someone solve a problem.

Giving the Pink Slip

pink-slipIn 2006, Radio Shack made headlines when it relieved 400 employees of their jobs – not for the fact that they were let go, but because they were told by e-mail.

While that is an extreme example, it’s also illustrative of today’s always-on culture where text and e-mail are the de facto methods of communication. Don’t let this happen to you; as unpleasant as it may seem, it’s far better to have a conversation than it is to send someone a note. Yes, sometimes for legal reasons you have to send a letter instead of talking to the client. That’s fine, but unless you are legally prevented from talking with the person, send the letter after you have had the initial conversation.

Looking at the three primary reasons above, it’s easy to see why you would want to fire a client, but one of the main traits we have as human beings is we tend to like each other. For example, you may have a client who will literally give you the shirt off his back if you ask him for it, but you need to separate your personal feelings from your professional beliefs. After all, you may see the client in social situations at Rotary, the Lion’s Club or some other venue. What are you going to say to the fired client the next time you see each other?

The best way to move on is to have a professional conversation with the client and explain the reasons why. Just as you owe it to a fired employee to provide concrete examples of how he or she wasn’t doing the job up to standards, you must do the same with a fired client. Explain in plain terms what the problem is, and once you have the conversation, follow it up with a letter, not an e-mail.

Unless there is a sudden ethical problem, the actual “firing” shouldn’t be a surprise – and it may even be a relief. Whatever the outcome is, it’s not going to be entirely pleasant, so the client’s initial reaction may be anger. Reassure him or her that this is a completely private matter between the two of you and should remain so. You will not talk to anyone about this and you would appreciate it if the client would do the same.

Impact of Social Media

You don’t want your conversation to be on Jerry Springer or making the headlines of the local paper, yet you have to protect your reputation, so be wary of the power of social media! Today, a negative blog or Twitter posting can go viral in a matter of moments; you will want to ensure you do not suffer any potential negative consequences.

This wouldn’t happen to you … your “fired” client would never do this … well, wake up! No one can predict human behavior. While the client may seem well-adjusted when he or she leaves your office, it could be only minutes before something is posted that you cannot undo. You have to be realistic and cautious.

When your now-fired client says something negative on Yelp or Google reviews, you may have to get an attorney involved. However, watch your temper. It would be unprofessional of you to lash back and post a response or something you’ll be sorry you said. Take the high road; the best stance is to do nothing. It’s better to let the client stumble over his or her words than to react to them.

If it turns out that your colleagues and even your other clients are aware of the social media problem, it is time to communicate via letter or e-mail to them to allay their concerns. Don’t reveal any information that can be used against you later on; an attorney can guide you through this difficult situation.

Your Practice is Changing – What Happens to Your Clients?

For various reasons, an accounting practice does change over time. You may find you want to devote your expertise to other kinds of specialty services or a niche industry rather than being a generalist.  If this is the case, maybe you should consider selling a portion of your practice rather than severing the relationship.  This enables you to offload the less desirable service to another accounting firm, and cash out.

Your practice may change for other reasons, too. For example, some accounting services generate a lower hourly fee realization. Rather than continuing to accept this, you may make the business decision to depart lower-margin types of services such as payroll and traditional write-up for something more lucrative.

If this happens, you may want to “package” up these clients and sell them to another practitioner or even selling them through a broker. Of course, people are not commodities, but this is business, after all. By selling them to another practitioner, the client still gets service and attention, and you can focus (or refocus) your practice on what you do best – and avoid firing the client!

Keep Calm and Carry On

We may have tax law and regulations that standardize the accounting profession, but practice management and human resource issues definitely are not cookie cutter. There is no manual or Dummies’ guide that gives you all the answers.

As the British government imparted just before World War II, the best advice is to “Keep Calm and Carry on.” Don’t do anything rash. Think about what you want to do with a client before you take action. You can’t get the client back once you’ve let him or her go, so be rational and sensible, but also be honest with yourself about the way you want to grow.

Fire a client for the right reasons. In the long run, you’ll feel better about yourself and your business will prosper.

Marketing Is Not a Department

marketing-deptIn small businesses, marketing is what YOUR business is all about. That’s right, there is no such thing as a marketing department in a small business.

Yes, I fully understand that marketing is not your forte and most accountants hate marketing.  However, marketing is the heart of every successful business.  And if you do it well, your business will grow easily each and every year despite the overall economy.  Quite frankly, marketing enables you to continuously improve the “quality” of your practice and grow at the pace you desire.

Marketing is the responsibility of each business owner, regardless of the industry.  And when done well, shrewd business owners turn their employees into marketing evangelists, to spread the word and generate word-of-mouth advertising and referrals.

To give you a classic example of grass roots marketing, think about Harley Davidson in the early 1980’s and the phenomenal turnaround they accomplished against competitors like Kawasaki, Honda, and Yamaha who were underpricing Harley and providing higher quality motorcycles.  While Harley made enormous investments to improve their manufacturing operations and product quality, they were facing the fight of their lifetime to stay in business.  Their advertising budget was zero from 1984 to 1996.   However, they created a groundswell of support by creating the Harley Owners Group (HOG) and creating a sense of community.  Using newsletters and club magazines, they managed to grow from one HOG chapter in 1983 to over 1,300 chapters around the world (over 750,000 members).

Keep in mind, I don’t ride a motorcycle but this is truly a classic example of using grass roots marketing to help a company turn around their business.

To improve the quality of your accounting practice, embrace marketing holistically and turn your employees into evangelists.  Marketing is what YOUR business is all about!

 

How To Reduce Write Offs by 99%

8 Step Program for Accounting Firms

While it’s hard to believe, accountants struggle to get paid promptly. That’s right, most accounting firms are downright terrible at implementing a payment processing system to get paid quickly and minimize their uncollectible write offs. Even worse, they dread calling slow paying clients for fear that it will end the engagement, which perpetuates the problem.
If this describes your practice, then here is a process for reducing your write offs by 99% and dramatically improving your cash flow.
1. Invoice clients electronically. If you are still mailing out physical invoices to your customers, you are delaying the payment process. Instead, you need to email out invoices and encourage electronic payment processing to speed up payments. In fact, many customers prefer to pay electronically.
2. Send out invoices right away. Rather than wait until the end of the month, invoice clients immediately upon completing their work. While this tip seems blatantly obvious, most accountants kick the can down the road and bill at the end of the month. Billing at the end of the month for work completed the first couple of weeks within a month makes no sense. Instead, operate like most businesses and present a bill when the work is completed.
3. Integrated electronic payment system. Rather than wait for bills to arrive in the mail, savvy accountants are using an online payment system which accepts electronic payments by eCheck (ACH), credit cards and bank wires. Three forms of electronic payment integrated into one system for maximum convenience. BizPayO was designed to accept multiple forms of electronic payments so waiting for checks to arrive in the mail ceased.
4. Distribute hyperlinks everywhere. To make it easier for your clients to pay you electronically at all times, BizPayO provides a secure hyperlink program so you can integrate electronic payment processing into your website, imbed hyperlinks into your invoices, and even in your email signature thus eliminating the check is in the mail routine.
5. Accept mobile payments. You electronic payment processing system needs to be mobile friendly these days. And, you should consider accepting mobile payments on your cell phone. It’s so easy today to become “mobile friendly.”
6. Integrate online payment processing into your new client process. Going forward, all new business clients for your accounting practice need to sign a client engagement letter AND authorization to debit their account (e.g., ACH or credit card) for payment. Whether the client’s bill changes each month or is the same fixed fee, you need authorization to capture payment. This provides you with the ability to control getting paid immediately after your work is completed. The reality is that the general public trusts accountants so asking them to sign a document stating that they authorize you to pay yourself is no big deal to most small businesses.
7. Existing clients that fall behind. If one of your existing business clients falls 60 days behind, then it’s time to contact them directly, provide a reasonable installment payment, and demand that they sign your authorization to debit their account to prevent this from happening in the future. If they don’t have the cash, then credit card payment is the fallback alternative.
8. Coax clients to pay by ACH (eCheck) over credit cards. As the trusted advisor for your clients, you should advocate that clients pay by ACH. The BizPayO electronic payment processing system reinforces this message by providing you with an Upcharge feature on credit card payments, thus encouraging clients to pay by ACH.

This 8 Step Program will reduce your uncollectible write offs by 99%. The biggest challenge is your own aversion to change. That’s right, your own fear is the biggest obstacle.
Here are some quotes from accountants who have used this process to take control over getting paid.
BPO - Get Paid Faster - small image for SMMark Orlando, CPA in San Diego CA
“BizPayO’s convenient link creation tool speeds up payment and provides us with control over getting paid. Our goal is to get 90% of our clients onto this system to improve our cash flow even further. The days of waiting for checks to arrive in the mail are thankfully over.”
Larry O’Dell, CPA in Winston-Salem NC
“I have integrated BizPayO into my billing system to provide one holistic solution, rather than two merchants. Using one merchant for credit cards and another for ACH was inefficient. BizPayO’s hyperlink tool enables clients to pay rapidly without me taking a phone call for payment.”
Luke Gheen, CPA in Colorado Springs, CO
“All new business clients must sign our engagement letter plus the authorization for ACH processing to become a client of ours. That provides us with the control to get paid a few days after invoices are generated. As a result, our Accounts Receivable is $0 and we never have write offs for bad debt any more. It’s how we operate a modern, tech savvy accounting practice and have total control over getting paid rapidly.”

Who Has Time to Market My Accounting Practice?

Image - MarketingWhile most accountants want to grow their accounting practice so their practice is worth more when they decide to retire, they typically lack the time, skills and desire needed to grow aggressively.

  • Lack the Time – Most accountants get sucked into the operational side (back end) of their practice by staff and demanding clients. We all know that the squeaky wheel gets greased.  As a result, accountants typically lack the time to aggressively market and generate enough leads.
  • Skills – Let’s face it, accountants are technically proficient but not marketing savvy. The road to becoming proficient at accounting and tax has nothing to do with lead generation, reputation management, and branding.
  • Desire – And worst, most accountants simply don’t have the desire to peddle their own wares. They enjoy operating in a consultative manner but hate working a crowd.

Why Is Outsourced Marketing growing within the accounting industry? 

Image - Why Outsource MarketingFor most accountants, the market value of your accounting practice is the most important component of your retirement plan.  That’s right, the value of your accounting practice on the open market is the linchpin to how prosperous the retirement years will be.

Here are some of the other reasons why more accounting firms are outsourcing their marketing function to companies like Build Your Firm:

  1. Marketing is not a core function of the firm and not what we excel at.
  2. It is less expensive to grow with marketing than buying another firm. That’s right, outsourced marketing is approximately 50% cheaper than buying someone else’s practice.
  3. Outsourced marketing is more sustainable, 365 days out of the year. As a result, the annual new business acquired is higher with a sustained marketing approach than binge marketing for short periods of time.
  4. Partnering with marketing experts yields better results. By partnering with marketing gurus, my practice will become easier to sell, more profitable and worth a higher multiple.  It’s not about doing more of the same thing, it’s about improving our profit margins, hourly realization rates and obtaining a better balanced lifestyle.

If you’d like to learn more about Outsourced Marketing, I recommend that you listen to a educational session that I hosted earlier this year at the Scaling New Heights conference.  Yes, it’s long but it will explain why accountants struggle with marketing and then you can hear a panel discussion from three practicing accountants who answer questions from the audience on their experience with outsourced marketing.

To illustrate the effectiveness of outsourced marketing, the three accountants in this video have been outsourcing their marketing for 5-10 years and will continue because it delivers results that are easy to measure and quantify.

 

How To Reduce Write Offs by 99%

happy-biz-ownerWhile it’s hard to believe, accountants struggle to get paid promptly.  That’s right, most accounting firms are downright terrible at implementing a payment processing system to get paid quickly and minimize their uncollectible write offs.  Even worse, they dread calling slow paying clients for fear that it will end the engagement, which perpetuates the problem.

If this describes your practice, then here is a process for reducing your write offs by 99% and dramatically improving your cash flow.

  1. Invoice clients electronically. If you are still mailing out physical invoices to your customers, you are delaying the payment process.  Instead, you need to email out invoices and encourage electronic payment processing to speed up payments.  In fact, many customers prefer to pay electronically.
  2. Send out invoices right away. Rather than wait until the end of the month, invoice clients immediately upon completing their work.  While this tip seems blatantly obvious, most accountants kick the can down the road and bill at the end of the month.  Billing at the end of the month for work completed the first couple of weeks within a month makes no sense.  Instead, operate like most businesses and present a bill when the work is completed.
  3. Integrated electronic payment system. Rather than wait for bills to arrive in the mail, savvy accountants are using an online payment system which accepts electronic payments by eCheck (ACH), credit cards and debit cards.  Three forms of electronic payment integrated into one system for maximum convenience.  BizPayO was designed to accept multiple forms of electronic payments so waiting for checks to arrive in the mail ceased.
  4. Distribute hyperlinks everywhere. To make it easier for your clients to pay you electronically at all times, BizPayO provides a secure hyperlink program so you can integrate electronic payment processing into your website, imbed hyperlinks into your invoices, and even in your email signature thus eliminating the check is in the mail routine.
  5. Accept mobile payments. You electronic payment processing system needs to be mobile friendly these days.  And, you should consider accepting mobile payments on your cell phone.  It’s so easy today to become “mobile friendly.”
  6. Integrate online payment processing into your new client process. Going forward, all new business clients for your accounting practice need to sign a client engagement letter AND authorization to debit their account (e.g., ACH or credit card) for payment.  Whether the client’s bill changes each month or is the same fixed fee, you need authorization to capture payment.  This provides you with the ability to control getting paid immediately after your work is completed.  The reality is that the general public trusts accountants so asking them to sign a document stating that they authorize you to pay yourself is no big deal to most small businesses.
  7. Existing clients that fall behind. If one of your existing business clients falls 60 days behind, then it’s time to contact them directly, provide a reasonable installment payment, and demand that they sign your authorization to debit their account to prevent this from happening in the future.  If they don’t have the cash, then credit card payment is the fallback alternative.
  8. Coax clients to pay by ACH (eCheck) over credit cards. As the trusted advisor for your clients, you should advocate that clients pay by ACH.  The BizPayO electronic payment processing system reinforces this message by providing you with an Upcharge feature on credit card payments, thus encouraging clients to pay by ACH.

This 8 Step Program will reduce your uncollectible write offs by 99%.  The biggest challenge is your own aversion to change.  That’s right, your own fear is the biggest obstacle.

Here are some quotes from accountants who have used this process to take control over getting paid faster.

 

mw-orlandoMark Orlando, CPA in San Diego CA

“BizPayO’s convenient link creation tool speeds up payment and provides us with control over getting paid.  Our goal is to get 90% of our clients onto this system to improve our cash flow even further.  The days of waiting for checks to arrive in the mail are thankfully over.”

 

larry-odellLarry O’Dell, CPA in Winston-Salem NC

“I have integrated BizPayO into my billing system to provide one holistic solution, rather than two merchants.  Using one merchant for credit cards and another for ACH was inefficient.  BizPayO’s hyperlink tool enables clients to pay rapidly without me taking a phone call for payment.”

 

 

luke-gheenLuke Gheen, CPA in Colorado Springs, CO

“All new business clients must sign our engagement letter plus the authorization for ACH processing to become a client of ours.  That provides us with the control to get paid a few days after invoices are generated.  As a result, our Accounts Receivable is $0 and we never have write offs for bad debt any more.  It’s how we operate a modern, tech savvy accounting practice and have total control over getting paid rapidly.”   

BizPayO - logo w desc underneathSavvy accountants are adopting BizPayO because it’s so simple and reduces accounts receivable quickly.  Here are the costs:

  • No monthly service fees (used to be $29/month)
  • Credit card fees are 2.99% and most accounts will use the upcharge feature to recapture 100% of their credit/debit card payments
  • ACH fee is 0.89%. There are no transaction fees.  Most companies tack on $.25 to $.50 per transaction.
  • No PCI or equipment costs.
  • Accepts one time and recurring payments.
  • Sign up process takes less than two minutes.

Online payment processing has never been so easy. Visit www.bizpayo.com today and get total control over AR.

Practice Management Program for Accountants – Brand NEW

AMP - Higher Profit MarginsBuild Your Firm is pleased to announce that the Practice Management Program for Accountants has just been released.

This education program is available in a self study format and provides a step-by-step system for maximizing the “value” of your accounting practice, improving your work flow, and incorporating technology into your practice for peak efficiency.  Learn how to:

  • Operate at profit margins of 50-70%, not 25-40%
  • Manage small business clients with less stress
  • Develop a practice that is worth more (higher than 1.3 times gross)
  • Develop a practice that is easier to sell

This new program now includes over 30 sections to rejuvenate your accounting practice.  This comprehensive program was designed by a practicing accountant, Allan Ratafia.

Becoming A Firm of the Future

Most CPAs I know agree with me that the shift in our role from quarterly tax professional to ongoing partner and advisor is both vital and inevitable when it comes to serving our small business clients. Yet, while there’s been much belabored discussion on the topic in our industry, very few accountants are working to make it happen in their own practice.

As a millennial accountant myself, who started my own practice from scratch as an outsider of sorts, I have always embraced the role of partner, and have seen many pain points and roadblocks that we accountants need to tackle in order to step into that role – and into the 21st century – if we, ourselves, want our practices to stay relevant.

Start by offering a few more services. It’s important to be an advisor to small businesses because they often don’t know what they need, or even where to start learning as much. So the more services you can offer them, the more you can guide and empower them. In my experience, small businesses often call to “inquire about our services” but really need guidance on what services to use. They know they need tax prep and advice, but what they’re actually looking for is a strategic partner. They simply don’t know to ask for one. I’ve also found it’s easier to sell my own services as a CPA when I offer comprehensive services that differentiate my practice.

BenchmarkingTo step into that role, CPAs can start by offering services like financial planning, forecasting, and performance tracking to their small business customers. I first realized the importance of these features when I learned about such tools at the Scaling New Heights conference in 2014. I immediately knew I needed to offer those services, and there are plenty of tools available now for CPAs to help better serve their clients.

The Next Barrier to Conquer

It’s now 2016; time to finally embrace empowering technology. When I was first trying to break into accounting and have larger accountancies buy into my practice, I spent a great deal of time inside multimillion-dollar firms stuck using yesterday’s technologies. From owners still using Hotmail accounts to paper and people piled everywhere (well, figuratively), everything was manual and old school.

And although many of them saw it as “tried-and-true,” that mindset has actually set them back quite a bit when it comes to shifting to this full-service advisory role – they aren’t able to be nimble and adaptive. I decided at that moment that my practice would follow the cutting edge of technology. It sets us free and multiplies what a small group of people can accomplish.

I simply can’t overstate how integral technology has been in setting my practice apart as an advisor. It has allowed us to grow a business with clients all over the country, able to work with them virtually, without any hiccups. It’s amazing, and clients love it, too.

Stare down resistance and the status quo. The final, most difficult thing that we need to change is internal resistance to the idea of change, which draws its power from our collective inability to rise above the stresses of the day-to-day to take a look at the way we’re doing things.

There are a lot of growing pains in evolving into a competitive advisory practice, and many people react against the idea because of this resistance. It involves evaluating the strengths and weaknesses of your current team, drastic changes in client acquisition, outsourcing basic services like payroll and expenses, and even later on letting go of legacy clients who don’t want to change with you. Tackling that and creating proactive progress is difficult when you can’t rise above daily crisis mode.

Although I can’t say I’ve gone through these growing pains myself, having been fortunate enough to establish this identity for myself from the beginning, I’ll still say with confidence that it’s worth it.

Aside from giving my practice a competitive edge and staying power, I find my work these days so much more engaging and fulfilling offering a comprehensive breadth of services that allow me to be a partner to my clients. I’m proud to talk about my firm and how I’ve set myself apart by helping small businesses that need it, and would be happy to speak with others about how they, too, can rise to the next level in their practice.

 

Gheen - headshotWritten by Luke Gheen, CPA in Colorado.  Originally published in AccountingWEB on February 4, 2016.

Gheen logo

“High Alert” – IRS Phone Scam – Let Your Clients Know

I received this email from a CPA Firm in Dallas and thought I’d share it.

ScamThis week, they have had several clients nearly fall for this IRS Phone Call Scam.  Even one of their employees received one of these calls.  Please be advised that THIS IS A SCAM but easy to realize how it can be effective and trick people.

The Treasury Inspector General for Tax Administration (TIGTA) urges taxpayers to be on “high alert” about IRS employee impersonators. According to TIGTA, since October 2013, thieves have stolen millions of dollars from taxpayers believing the fraudulent calls saying that they owed the government money and cash needed to be sent immediately.

The TIGTA states that they receive thousands of calls every month with reports of these robbery attempts. It is very important, especially during the upcoming tax season, to be aware of things to look for that should be a RED FLAG.
1. The IRS virtually always contacts by mail, not by phone and NEVER cell phone.

2. Payment will not be asked for using a prepaid debit card, money order or wire transfer. They will not ask for a credit card over the phone.

3. They may know the last four digits of your security number and may be able to make the caller ID look like it is coming from the IRS.

If you get a call from someone claiming to be from the IRS, hang up and call the IRS at 800-829-1040.

How To Reduce Write Offs by 99%

8 Step Program for Accounting Firms

While it’s hard to believe, accountants struggle to get paid promptly. That’s right, most accounting firms are downright terrible at implementing a payment processing system to get paid quickly and minimize their uncollectible write offs. Even worse, they dread calling slow paying clients for fear that it will end the engagement, which perpetuates the problem.

If this describes your practice, then here is a process for reducing your write offs by 99% and dramatically improving your cash flow.

1. Invoice clients electronically. If you are still mailing out physical invoices to your customers, you are delaying the payment process. Instead, you need to email out invoices and encourage electronic payment processing to speed up payments. In fact, many customers prefer to pay electronically.
2. Send out invoices right away. Rather than wait until the end of the month, invoice clients immediately upon completing their work. While this tip seems blatantly obvious, most accountants kick the can down the road and bill at the end of the month. Billing at the end of the month for work completed the first couple of weeks within a month makes no sense. Instead, operate like most businesses and present a bill when the work is completed.
Image - Faster Payment3. Integrated electronic payment system. Rather than wait for bills to arrive in the mail, savvy accountants are using an online payment system which accepts electronic payments by eCheck (ACH), credit cards and bank wires. Three forms of electronic payment integrated into one system for maximum convenience. BizPayO was designed to accept multiple forms of electronic payments so waiting for checks to arrive in the mail ceased.
4. Distribute hyperlinks everywhere. To make it easier for your clients to pay you electronically at all times, BizPayO provides a secure hyperlink program so you can integrate electronic payment processing into your website, imbed hyperlinks into your invoices, and even in your email signature thus eliminating the check is in the mail routine.
5. Accept mobile payments. You electronic payment processing system needs to be mobile friendly these days. And, you should consider accepting mobile payments on your cell phone. It’s so easy today to become “mobile friendly.”
6. Integrate online payment processing into your new client process. Going forward, all new business clients for your accounting practice need to sign a client engagement letter AND authorization to debit their account (e.g., ACH or credit card) for payment. Whether the client’s bill changes each month or is the same fixed fee, you need authorization to capture payment. This provides you with the ability to control getting paid immediately after your work is completed. The reality is that the general public trusts accountants so asking them to sign a document stating that they authorize you to pay yourself is no big deal to most small businesses.
7. Existing clients that fall behind. If one of your existing business clients falls 60 days behind, then it’s time to contact them directly, provide a reasonable installment payment, and demand that they sign your authorization to debit their account to prevent this from happening in the future. If they don’t have the cash, then credit card payment is the fallback alternative.
8. Coax clients to pay by ACH (eCheck) over credit cards. As the trusted advisor for your clients, you should advocate that clients pay by ACH. The BizPayO electronic payment processing system reinforces this message by providing you with an Uncharge feature on credit card payments, thus encouraging clients to pay by ACH.

This 8 Step Program will reduce your uncollectible write offs by 99%. The biggest challenge is your own aversion to change. That’s right, your own fear is the biggest obstacle.

Here are some quotes from accountants who have used this process to take control over getting paid.

Mark Orlando, CPA in San Diego CA
“BizPayO’s convenient link creation tool speeds up payment and provides us with control over getting paid. Our goal is to get 90% of our clients onto this system to improve our cash flow even further. The days of waiting for checks to arrive in the mail are thankfully over.”

Larry O’Dell, CPA in Winston-Salem NC
“I have integrated BizPayO into my billing system to provide one holistic solution, rather than two merchants. Using one merchant for credit cards and another for ACH was inefficient. BizPayO’s hyperlink tool enables clients to pay rapidly without me taking a phone call for payment.”

Luke Gheen, CPA in Colorado Springs, CO
“All new business clients must sign our engagement letter plus the authorization for ACH processing to become a client of ours. That provides us with the control to get paid a few days after invoices are generated. As a result, our Accounts Receivable is $0 and we never have write offs for bad debt any more. It’s how we operate a modern, tech savvy accounting practice and have total control over getting paid rapidly.”

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Learn more about BizPayO online electronic payment processing to lower your write offs and get control today.

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