Accounting firm owners band together to end late client payments

Dozens of firms have signed onto an initiative to stop underselling the worth of accountants and collect payments on time from clients.

The effort, spearheaded by the practice management software company Ignition, has organized nearly 40 accounting leaders in signing an open letter, "Stop Underselling Our Worth," as part of what Ignition has dubbed the #CallForChange movement. The goal is to encourage firm owners to reclaim the profitability of the accounting profession by putting an end to late payments, unbilled work, and inefficient processes. 

Along with Ignition, partners include Dawn Brolin, CEO of Powerful Accounting; Logan Graf, chief tax officer at The Graf Tax Co., Tiffany Davis, president of Washington Accounting Service; Ryan Lazanis, founder of Future Firm; Kelly Gonsalves, founder of Totally Booked; Ben Stein, CEO of Keeper; Laurie O'Neil, owner of Innovative Financial Services; Candy Bellau, owner of Kramerica Business Solutions; Josh Lance, founder of Lance CPA Group; and others.

"As an industry collective, we're calling on U.S. accounting and tax professionals to join us to reclaim the profitability our profession deserves," said the letter, released Monday. "Here's the hard truth. We're letting our clients walk all over us. We give away work for free. We fear clients will leave us if we raise prices. We're afraid to ask for payment upfront. We avoid awkward conversations and miss out on collections. We say yes to clients when we don't have the time. It's a vicious cycle. The more we put up with it, the more we encourage the behavior we dread."

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Ignition released a report last year that found 94% of accountants need to chase clients for late payments, and an average of 31% of invoices are paid late (see story). One of the main reasons for the late payments is that accountants are loath to have "awkward conversations" with clients about them, Ignition has found. In the year since the study, Ignition has found those late payments continue to be a problem for many accountants.

"What we've noticed is that not a whole lot has progressed in terms of getting that message out there that accounting firms are leaving money on the table," said Matt Kanas, vice president and managing director for the Americas at Ignition. "The stats from our survey last year found nearly $80K every year in revenue, on average, that is unrecovered or out of scope. What we're trying to do is raise awareness of this even more, and create that movement."

He believes more firms need to feel comfortable with raising prices, especially during a time of inflation in the wider economy, and accountants should feel justified in charging for any out-of-scope work their clients ask them to do. 

"When we talk to our customers and prospects, this is an issue that everyone's trying to tackle," he added. "We wanted to make sure that folks know that this isn't the way you have to run your business. We hear over and over again that this is just the cost of doing business, that there are going to be those clients that you're going to have to chase each and every time, and you're not going to do anything about it. So we want to get the message out there that this isn't the way things have to be, and that there is a way to solve for that."

Ignition will be hosting a live webinar on Tuesday, Sept. 19 at 12 p.m. ET featuring entrepreneur Gary Vaynerchuk and other experts on the topic.