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    delinquent accounts receivable

    As a CPA, is it a violation of Code of Professional Conduct to turn past due accounts over to collection? They are not large in dollars, just want to make a point with deadbeat clients.

    #2
    Everybody has their opinions on this. My view is that consumer collections is an area fraught with dangers and risks far beyond the potential rewards. There are dozens of ways to inadvertently run afoul of the rules.

    Have you offered them an opportunity to make small payments on the debt, for example? Aggressively pursuing clients for relatively small amounts of money only alienates them even more, and sometimes causes them to bad-mouth you when otherwise they may have remained silent out of embarrassment. You'll never be able to defend yourself against the innuendo, so you potentially lose business you never knew about.

    Finally, you can't tech a deadbeat anything, so why waste your time and efforts? May as well be trying to teach a pig to sing: all you get for your efforts is bad music and a frustrated pig.

    Your time can be better spent finding new business and cultivating profitable relationships. But to refocus in that manner requires that you check your ego at the door.
    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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      #3
      I agree with John. I would just let it go. Turning them over for collection may make you feel better temporarily. That feeling can evaporate in a heartbeat if you get a lawsuit that shows up at your doorstep. You'll have to report it to your malpractice carrier which may affect your underwriting.

      There are no boundaries to what a crazy client can do. They can file a claim with professional licensing in your state containing some outrageous allegations that you will be grilled about and that you now have to defend.

      I'd suggest just walking away from it.

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        #4
        I doubt it, but I've never read the 200 page Code of Professional Conduct, pub.aicpa.org/codeofconduct/Ethics.aspx#

        Contact your insurance company. They should be able to confirm if it violates the code or not. Either way, they'll probably discourage it.

        Do your have a client agreement? What does it say about disputes? Mine states that they agree to mediation before they litigate. It doesn't put that limitation on me.

        Find out the statute of limitations for non-payment and malpractice. If malpractice is shorter, wait until that runs out, then take collection action. That way if they sue, and it actually goes to court, you can get it thrown out for expired SOL.
        "Taxation is the price we pay for failing to build a civilized society." ~ Mark Skousen

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          #5
          Why would you not turn it over. You provided a service and did not get paid. I have only done it once, but the last thing I am worried about is what the former client would would say.. Sometimes and I have a couple now - where I carried them longer then I should of and they have pretty much no chance other than the the lottery of getting me paid - I have left them and if I every hear of them making it i will get in line for payment.

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