Make your intentions clear at the outset.
By Ed Mendlowitz
202 Questions and Answers: Managing an Accounting Practice
Question: I have a close friend who is also a client. He went through a rough time with his wife threatening a divorce and we spent a lot of time talking about it (out of office settings).
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I sent him a bill and he returned it with a notation that “we spoke as friends and not as a professional consultation, and the bill should be canceled.” What should I do?
Response: Unless you want to lose the friend and client, forget about it.
The problem is that the conversations were during regular golf games, at lunches that are usual and various phone calls. If there was a professional service rendered or that should have been conducted, it should have been done in the office, preceded with a comment that this will be billed extra. If the client did not want to pay or did not value or perceive a value from the service to be rendered, that is his prerogative and the time then should not have been spent. Once there is a clear understanding, you can then choose to bill it or not.
What I do after an initial meeting or two is tell the client that it seems like he will be needing ongoing consultations for advice, guidance or strategy, and I will bill him a minimum retainer and then will accumulate my time and will bill him additionally as things progress, with the hope that the retainer will be sufficient. I determine the retainer by assuming I will spend about 10 hours on the matter.
This happens a lot with the culprits being personal financial planning, retiring, paying for a child’s college education, whether client should buy a variable or immediate annuity, a potential bankruptcy or short sale of a residence, or bringing in or getting rid of a partner. You have to draw the line between personal and professional activities. You also need to recognize that is how you make your living. You spend time and apply your knowledge and experience to individualized situations and need to be paid for it.
