Pay me before I start?.....this is long
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Experiences I'm having as I'm starting out are causing me to rethink how to deal with new clients.I want to know if you get some of your funds like maybe a set up fee BEFORE you do any work for new clients? What ype of arrangements do you typically make?I'll start with an example (sorry in advance for the length)Talked with potential client who is paying sooo much money for just payroll services with her second accountant. Her first accountant was so slothful that 2003 corporation return were not filed until 2005. Personally I don't think she should be a Corp which was done out of her ignorance. So after spending two hours with this lady learning a little bit about her business including that the 2004 return has just been filed for a whopping $600 because there were no accounting, 2005 not filed, 2003 and 2004 personal taxes were filed late and 2005 still not filed (usually get refunds because of all of the credits), I offer her how for about $40 more I could do monthly accounting and bi-weekly payroll and she would know how much she's profiting..you know, the whole nine yards. She decided that she wanted me to be her accountant, but she had to let the other lady who does not do personal returns, but did a one time high priced corporation (which she outsourced) She was to let the lady know, for sake of this forum on Tuesday. I was to come that Friday and pick up things to start. Meanwhile, I am working behind the scenes because I am gearing for all of this back work and of course she wanted me to be her accountant. When she told accountant on Tuesday, accountant now wants to offer services because "she did not know that the lady was in need of accounting services" So she scheduled lady to come Thursday just to hear her out and be fair. But she told me to still come Friday because she wants me to be her accountant. Meanwhile I am still working behind the scence. Get there Friday with engagement letter and ready to pick up documents and find out that the conversation had not taken place because she was "not there" when the lady came. So she asked me to come back Monday afternoon because she would had talked to the lady that morning. I left the enagement letter with her. I get there Monday afternoon to find out that her dentist appointment after her appointment with the lady took longer and she wad in pain so please come back Wednesday. Get there Wednesday, she told me that someone encouraged her that she could do her own accounting. She showed me a 2004 Quickbooks Basic that she had started loading. She told me that she thinks this would be a challenge for her to learn and bla bla bla. (yet she still had the unopened Turbo Tax box she bought months ago to do her own taxes) However, she told me not to kick her to the curb yet because she may call me back in a week if it looks like she can not do it. I walked away not earning anything for all of the hours that I invested behind the scences. Is if uncommom to collect something before you start?
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Hi (This is long, too)
It is not uncommon to ask for a retainer as part of your agreement. It can be part of your set up fee and your initial hours can work against it. I feel your pain on this one, because I have had a client like that. It doesn't mean that she won't call you back, but she might not. This incident gets into the area of our integrity and discrimination of sensing what kind of a person we are interacting with.
You are the professional AND you also have the power to choose your clients. Need for income may outweigh our being ultra-choosy sometimes, but if you're in an area that has enough population density, you may benefit by cutting your losses and moving on, billing your time to "Internal" on your timesheet, or conversely, sending her an invoice for the background work you did based on her verbal acceptance of the business relationship between you two.
If she does make an appointment with you in the future, you now have some history on her and where you would put your time ( like only showing up when she's sitting there waiting for YOU! :D )
Good Luck!
May I ask the general area you are in? You don't have to be too specific...
Regards
Caroline
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Thanks for listening, because I was really discouraged. I'm from Louisiana. Are there any other Louisianas out there?
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I agree. I had said that if she asked me the price would change to a point that she would decide if you really wanted me, but given the circumstance, money is not worth this.
I've heard of the phrase beggars can't be choosers and in this business I will not be a beggar.
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I have been there and done that. I WILL NOT DO IT AGAIN!
I often ask for a retainer from new clients that I don't know. I appply the retianer to their invoices. I have one client that is so lazy about paying that I have now a new rule with him that I don't start new work until I have a retainer so he is always paid ahead. Good person, just not regular.
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I bet most professionals have had a similar experience. I would recommend the following steps for the future:
* Check out the business/owner with state reporting agencies. Does the person have applicable licences and ID numbers to operate in the state? Does the BBB have any reports on the business?
* Ask for a retainer and don't start work for these types of jobs until the retainer has cleared the bank. That's the only way to make sure you get paid. (I had a retainer that bounced once.)
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I will defintely ask for a retainter or my setup fees up front. Burn me once, same on you, Burn me twice shame on me.
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I don't ask for a retainer, but I do charge a minimum of $100 per visit. That reduces the amount of "sorry, I'm not ready" appointments.
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Usually I see a client, find out a little about the business and what they need done, and many times just quote an hourly rate.
One company had a very complex structure and also wanted a DETAILED quote on a new system WITH 1 year history. Just finding out the complexity of the situation and submitting the detail quote (broken down by what needed to be done, and recommended process) and estimated hours - took me about 15 hours. (I had submitted a more general quote, but they needed more information.) Make a long story short - I'm sure they are following my road map and doing it themselves. I chocked this up to my inexperience - but should it happen again - I'm not sure what I would do. When should I have pushed back? when they wanted more information? I suppose I could have said something about it taking up so much time - but they were talking almost a 500 hour project plus follow on time. I thought I was giving good customer service, I was just giving them free help.
