I have been thinking about the best way to disengage a client and hope someone on here can advise me on the best way forward. So I have a clear conscience I want to leave with no deadlines looming. The Vat return and the payroll are due this week. But, I also want to get paid for the work I have done! I think that once I send the dear John letter I won't get paid. If I wait until I am paid before I disengage them then another couple of months bookkeeping will be due.
My client is notorious for paying my invoices (and everybody else's really, really late, and HMRC, well they don't pay them at all). This is one of the reasons I do not want them as a client anymore. So, what's the best way forward - I just want to leave , get paid, and get out of there -
So , do I send the letter now with a final invoice stating I will submit the payroll and Vat return when my invoice has been paid (but this is very short notice) or submit them , send the disengagement letter with my final invoice and hope I get paid...one day (Limited company so can't hold onto the data)
I think this is a question of timing. If you turn up the heat sufficiently at the beginning of a quarter then you're in a better position to 'tools down' or refuse the 3rd month bundle of papers at the end of it.
This would give him more warning and time to find someone else but may help your current quandary.
However, it sounds like you urgently want to get out and you must weigh up whether you're prepared to do the work without the leverage of impending deadline.
There may be scope for submitting the RTI but refusing to tell him how much is due / provide payslips etc.
May I make a suggestion for this and all your clients?
I insist all clients make a fixed monthly payments by standing order, based on what I estimate I will charge them over the next 12 months. If I do more than the amount estimated, I let them know and they have to increase the amount to take it into account, or settle up the difference on receipt of the invoice. I will not start doing any work until the first payment goes through, and if they miss a payment for any reason, I let them know that I have stopped working for them until the payments resume. I have the details of the agreed monthly payment they have to make in my letter of engagement. If for any reason the amount of work I do reduces, I do ask them to reduce their monthly payment.
If a client refuses then I suggest they consider finding someone else. I started this a couple of year ago, and the few than initially refused eventually came round as they had no choice if they wanted me to continue for them. I lost very few clients, and the few that did leave, I was happy to see them go.
I don't have any cash-flow problems and very few unpaid invoices, and generally my clients are happier.
I would recommend making clients "spread the payment" and doing it by standing order, means it is not forgotten, and it can be better for them too.
-- Edited by YLB-HO on Thursday 27th of August 2015 05:34:23 PM
I've always done the work then issued the invoice. Up until a couple of months ago it has never been an issue. The standing order is a good idea, and one I will no doubt implement. Out of interest what do you do with annual clients, do they pay up front before you do the work?
Hi Georgie,
I agree with Tim, decide when it's most advantageous to you to pull out, then just take the hit, or issue a county court summons if you feel strongly enough that it's worth pursuing.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
I tried gocardless, but clients kept saying they couldn't get it to work! as they would have to authorise the dd from a email link. So I gave them a choice - GoCardless or standing order. One or the other - no other option to choose. Even the annual clients pay monthly, as it makes sure they don't leave everything to the last minute!
-- Edited by YLB-HO on Thursday 27th of August 2015 11:44:57 PM
I'm like Mark in that 100% of my clients are now on GoCardless. I had some grumbles at the beginning and people dragging their heels, but now everyone uses it and is happy with it. Just stick with it.
I like John just invoiced monthly but would not stand for anyone paying their invoices to me late, even if they are notorious for doing it with others - if you give them an inch they always take a mile. Although every month that then leads to the 'will they actually pay me' thinking. I did have one client who didnt pay me for about six weeks after the invoice - wasnt a great amount but that wasnt the point. I just downed tools - made it absolutely clear. First panic date fortunately for me was the payroll rather than the VAT when he phoned to give me the payroll info as if there wasnt a problem and seemed stunned when I told him I wasnt going to do it. I was paid within 10 minutes for the overdue invoice plus an amount up front. I didnt even trust him on weekly standing orders (nor D/ds) so from then on he was on weekly standing orders.
Think its time I started putting some of the others on the same regime.
Georgie - Given its now Friday - I would say process what you can, send your invoice, chase him more ruthlessly than you would normally do for payment. If he hasnt paid you by the time the next payroll is due (say a week before) - start drip feeding him the messages that he needs to pay before you can do the payroll (in a non threatening way of course). As soon as you get paid send the disengagement letter - if time to complete the next batch of work is close to the deadline you could offer to help him and process it but only if you get paid up front.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I agree with the gocardless option, have a few of my new clients using it and has saved me a lot of time. On parting company with my clients I have made sure payments are up to date prior to the final work. Where I have been handed clients paperwork I have only returned it afterwards. Unfortunately one client is hard work parting with and taking time finding a new bookkeeper so I had to issue a formal letter confirming full requirements. I did find a standard AAT letter on disengagement letter which was very useful. Good luck with your timing, I would personally send letter giving a good time scale notice stating clearly payment terms.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
