Collections Tip: Discounts Sometimes Work

CPA firms who chase after collections know that it is sometimes a losing game. Each firm tries to collect any outstanding balances due for obvious reasons, but doing so may be very difficult.

One suggestion is to provide a 'discount' if the client were to pay within a specified time period. For example, if you have a client that is 90 days overdue, offer five to 10 percent discount if the client pays within a 10 or 15 day period.

While this isn't the perfect scenario, it might ensure you collect on at least most of your invoice, and any fees you would have paid to collection agencies would far outweigh the cost of the discount.

If collections continue to be a problem with a client, you should question why you continue to do business with that particular client. Cut your losses, and move on to greener and more lucrative pastures.

You may like these other stories...

For the first time in the five-year history of Vault.com’s rankings of the top 50 accounting firms to work for in North America, a firm has held the top spot as best accounting employer for two consecutive years....
With tomorrow being Tax Day, you might see some procrastinators at your office filling out forms, printing out paperwork, or getting last-minute tax advice from their accountant so they can meet the IRS’s filing...
You can read volumes on how to manage an accounting practice. But if you want the quick version, just read the following four points. Everything else is just commentary.  (These points come out of the 1997 book, The...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.