Personal Taxes:

Monday, April 18, 2011 at midnight is the official deadline for the taxes to be postmarked or e-filed since Friday, April 15, 2011 is Emancipation Day a national holiday.

Florida Business Taxes:

If you have not yet filed your Florida Tangible Tax return because you extended the return for 30 days, it will be due on May 1, 2011.  It is very important to file this return timely to make sure that you qualify for the $25,000 Tangible Property Florida Exemption.

Florida Annual Reports are due on May 1, 2011 for Corporations and LLC’s.  It is extremely important that the Florida Annual Report is filed timely to avoid the $400 penalty and the possibility of your corporation being administratively dissolved.

1st Quarter Payroll Taxes are due on April 30, 2011. Florida Business’s need to remit Form 941 to the IRS and Form UCT-6 to the Florida Department of Revenue.

As you can see there are a lot of deadlines over the upcoming days. I wish everybody a happy tax day!

Unfortunately, you are looking at self preservation at this point and a line needs to be drawn. So, your first step will be putting your client’s account on hold until payment is received. You may want to offer to allow a prepaid account for future services and invoices so you know current services are covered while they are paying off their past invoices.

When you make this difficult call to request payment, remember to keep it professional and polite but firm. You may get the “we didn’t receive your invoice” excuse, which can be a legitimate reason for a missed payment in some cases. This one is easy enough to resolve; email them the invoice while still on the phone and ask for confirmation of receipt. If they still don’t receive it, you’ll need to print the invoice and send by registered mail. Document the call, the email and registered mail.

You’ve played nice and kept it professional, you’ve given your client a reprieve and offered an easy out but they still haven’t sent payment as promised. Now you will need to make another call and speak directly to the owner of the business to let them know the check never arrived and suggest you will stop by personally to pick up the payment. If your client happens to be out of State, send a courier to pick it up.

Maybe your client is really having a tough time and tells you they just can’t make the payment they originally promised. It’s understandable, you don’t want to be unreasonable, so work with them. Offer to accept a smaller payment (something is better than nothing!), then set up a more attainable payment plan. Again, document every conversation and communication.

So now you’ve gone through these steps and you still haven’t received a payment. It’s time to step up your game a bit, still keeping in mind it’s best to be professional no matter how annoyed you are at this point. This is when you’ll need to start calling your client every day, at varying times, and visiting them on a regular basis, making sure to document every interaction. Usually clients who have been giving you a hard time will find this a bit disconcerting and because you’re not a nameless/faceless collection agency, you’re not as easy to ignore. As a result it will usually result in receipt of payment.

Next week we’ll look into what steps need to follow these efforts if you still haven’t received payment.

_{Fred Daus is the Chief Executive Officer and founder of Fredrick James Accounting, Tax & Consulting. He is a member of National Society of Accountants and the National Society of Tax Professionals and has been helping clients save money and grow their income since 2001. Fredrick James is an innovative, full service accounting firm in Clearwater, Florida with a focus on providing outstanding service, tax savings and financial growth to clients in the Tampa Bay area, Nationwide and around the world. Visit our website www.FredrickJames.com or call 727-230-0716 for more information.}

Very few business owners start their company with the goal of becoming collection agents, so being put in that position can lead to avoidance. You have a personal relationship with your clients and it can become an emotional issue for many small business owners—who wants to add stress to people you know are already struggling? So let’s take the emotional baggage out of the equation by setting up some simple guidelines that communicate your expectations and provide more up to date information for your clients that will help them better budget their payments so you get to avoid being “the bad guy”.

No doubt about it, invoicing is tedious. But with a little tweaking, the process can be improved to make communication between you and your clients/customers more frequent and reduce accounts receivable aging.

Avoidance and lack of communication leads to misinformed or uninformed (and eventually very frustrated) clients, this is often the first mistake that starts you on the road to the A/R blues. Unappealing as it may seem, staying on top of your invoicing improves your cash flow, helps you identify problem clients more quickly, reduces invoice disputes since clients still have the transactions fresh in their heads, and improves client relations because it helps your customers manage their own cash flow.

Your new mantra: Invoice clients/customers promptly and more often!

So where do we begin? As with most things, having the right tools for the job can save you time, frustration and money. The invoicing process can be drastically simplified with commonly used accounting software packages like QuickBooks which will automate the invoicing process, producing professional looking invoices that can be mailed or e-mailed to your clients. The power behind most invoicing systems is that you can enter time, products and reimbursable expenses into the program’s customer center during work hours and invoice on a daily basis if needed. Yes, these systems can take some time to set up and often the use of a consultant to guide you through the installation process, however, the upfront investment of time and money significantly reduces the time and embarrassing mistakes that can ultimately show up on your invoices down the road.

How often you invoice is up to you, but ideally you’ll want to shoot for invoicing on a weekly basis or a biweekly basis. Invoicing on a daily basis any finished work is a great way to stay on top of your invoicing workload too. This invoicing schedule might seem somewhat overkill, and you may be worried about your client’s reaction to the change but think of it more like a marketing campaign than billing. “The squeaky wheel gets the grease” and the more often you correspond with the customers, the more likely your invoice will fall at the top of their list for prompt payment.

Okay, so you’ve got the “why” and you’re ready to get your accounting software setup, now let’s outline the steps to implement your plan of action:

1. Invoice your client and include that the amount was either deducted from their prepaid account or that the invoiced amount will be deducted from their payment account on file (Credit Card, ACH) within 3 business days of the invoice date. Always, always include an invitation to call you if they have any questions.
2. Prepaid accounts need to be notified of their balance and any additional payments needed to keep their account current in order for work to continue. If this prepaid account runs out, then work stops until additional prepayment funds are received.
3. The accounts are then paid within the 3 business days of the invoice date and either accepted or denied by the credit card merchant or bank.
4. Any denied accounts are promptly followed up on and any work on that account is stopped until the invoice payment is satisfied.
5. Clients who do not follow up on denied accounts are placed into the collection process (this will come later in our series).

This process is service-based but can be easily modified for retail business: Payment must be received in full prior to delivery. Better yet, never order product for the customer until the client has at least paid your costs on that product by requiring a non-refundable deposit.

Don’t allow yourself to be at the mercy of your clients; take your power back by implementing these simple and extremely effective processes! It’s not rocket science, but there are still companies that will not subscribe to these simple rules who will find themselves singin’ the A/R Blues and, sooner or later, out of business.

Be proactive with your client communication and be honest about your expectations; you’ll have happier clients, enjoy your business more and have the satisfaction of seeing it thrive.

_{Fred Daus is the Chief Executive Officer and founder of Fredrick James Accounting, Tax & Consulting. He is a member of National Society of Accountants and the National Society of Tax Professionals and has been helping clients save money and grow their income since 2001. Fredrick James is an innovative, full service accounting firm in Clearwater, Florida with a focus on providing outstanding service, tax savings and financial growth to clients in the Tampa Bay area,  Nationwide and around the world. Visit our website www.FredrickJames.com or call 727-230-0716 for more information.}