Pricing, Billing & Collection - What Accounting Firms Can Do To Run Their Businesses More Efficiently and Effectively

Accounting firms provide priceless advice to businesses. However, they often struggle to effectively run their own businesses due to inefficiencies in pricing, billing & collections. Below par performance in these areas can lead to a troubled cash flow, cuts on the bottom line and dissatisfaction among the firm’s personnel.
 How can an accounting firm improve on its billing and collections practices?
Evaluate initial client interview procedures: Formalize your client approval process.
Do not discount your pricing to gain work: Your service value is communicated by all that you do including the pricing. If you undervalue your services, you are selling yourself short.
Try to get retainers from new clients: Three months of fees is an acceptable amount to ask for at the start; after that the retainer can be replenished for ongoing work.
Adopt a centralized approach towards client engagement letters, fee schedules and billing: Your firm's administrator sending out all client engagement letters, fee schedules & billing will ensure consistency in the language and billing and collections practices.
Ensure that bills are clear and brief: With timely bills that shows clearly the products delivered, clients will be more inclined to pay their bill promptly.  This practice increases awareness of the value of your service.  For large unpaid bills, it would be best to ask for the payment in three equal installments via credit card. This allows the client to earn credit card reward points. Communicate with clients regularly. Do not call only when seeking to collect a late payment.
Give everyone who discusses billing and collections access to client spreadsheets: Allow all stakeholders access to client spreadsheets so that detailed information about the client is readily available, allowing for tracking trends and also spot clients who used to settle bills regularly earlier, but stopped doing that now.
A major part of establishing and executing an effective billing process is to levy the right fees, send in bills on time and handle collections professionally and courteously. Accountants also have to communicate their value such that the clients realize the worthiness of the service received. Failure to improve an ineffective billing process hurts the firm’s profits, cash flow and morale. Don’t let this happen to your accounting firm. After all, happiness is a positive cash flow!

Foreign Assets & Accounts info included in new ITR form

In its efforts to check black money stashed in foreign banks, government has introduced a new column seeking details of foreign assets in the Income Tax Return (ITR) forms for the assessment year 2012-13. Taxpayers, who hold foreign bank accounts or properties, will now have to furnish details of their foreign assets which include information like country name, address of the bank, name mentioned in the account and peak balance during the year, after converting the value of the foreign currency in INR.

Similar information will also have to be provided by the taxpayer to I-T authorities if he holds financial interest in any entity abroad, details of overseas immovable property and any other other asset outside India.

The I-T department, in the new ITR, has also asked the taxpayer to furnish to it details of account/accounts abroad in which the taxpayer has “signing authority”.

Finance Minister Pranab Mukherjee had announced in his Budget speech earlier this month that new steps will be taken to make compulsory the reporting of assets held abroad by Indians.

“Furnishing of return by such a resident (with assets abroad) would be mandatory irrespective of the fact whether the resident taxpayer has taxable income or not,” the Budget statement had said.

The proposal would be effective from April 1, 2012 with retrospective effect.

No other changes have been made in the six other ITR forms.