divorce from client

[tacks]

My corporate client is taking their business elsewhere and all their mess with them -- so be it.

While i might not always be the most brilliant tax guy out there they're making a mistake to be doing this now when I am already very well through their Corp return. They're basically going to be paying myself and someone else to do the same thing.

(I really went to bat for these people, saved them several thousands in tax fines and penalties, again and again, and i'm now regretting it.)

My problem is now about the bill. I spent a lot of time scrambling to keep them out of harm's way. Figuring that first I save them thousands then if they wan to protest and extra few hundred in my bill so be it.

But as they're being unreasonable I need to anticipate them being unreasonable with the payment of my bill.

I'm going to bill them a little more for my time -- not going to give them a discount as i originally planned. I'll stay within my estimate -- but go heavy with every one of the other many things that i did for them. I'll be reasonable, calm and professional. I'll consider offering workpapers to their new accountant which will better enable him.

So my strategy is to present them with this heavy bill. Then offer them a 20% discount if they give a check to me on the spot. (Because my goal is to not take this to a collections agency, 6 months down the road, that may take 50% of what is collected.)

Sound OK? (My fear is that they may be willing to pay my bill but simply don't have that amt of cash on hand at the given time.)

Any advice? Thanks.

EDIT: The obvious advice is, going forward, give return to client after they pay bill. Which i am slowly learning.

[JohnH]

It probably doesn't matter that much how you handle it. If they're honest, they will pay you. If they're jerks, you won't get paid no matter how much of a discount you offer. I'd be inclined to hand them the bill and expect payment before turning over any work product to them. If they initiate a negotiation, then offer the discount for immediate payment.

If I were on the other side of this negotiation and you offered me a 20% reduction right out of the chute, I'd probably wonder if I can get more by haggling with you. You've basically signaled that the bill is padded before we've even discussed payment. Suddenly I begin wondering if it's padded more than 20% ......

It might also be a good idea to offer them a discount if they pay CASH. I'm not suggesting that you not report the income, but if they're a little bit shady that's what they will assume and it will appeal to their dishonest side. As Larson E. Whipsnade (WC Fields) said, "You can't cheat an honest man; never give a sucker an even break or smarten up a chump", but if you're dealing with a chump you may as well face reality and meet him on his terms.

Just a few random thoughts I was musing over while my lunch settles...

[DaveO]

JohnH offers some good advice. I wouldn't offer a discount either and cash is king. Although writing a bad check can land you in the pokey pretty quick. Once they are out the door with their papers your leverage to collect is gone as well. I've had two corporate clients leave in a similar way and I drive by their old businesses every day noting the "For Rent" signs. Not that the lack of my skills led to the closing of their businesses just indicative of their general business attitude in not appreciating the hard work and willingness to "go to the mat" for them. I both cases we were pestered with phone calls from employees and letters from taxing agencies for months afterwards.

[tacks]

Thanks guys