About this time during tax return filing season, CPAs begin making a list of all the clients who have yet to bring in their tax return information. Then they begin calling and begging; “Please get your tax information in to us as soon as possible. If we don’t receive it by April 1st we might not be able to get your return completed by the April 15th filing deadline” (keep in mind there are no additional fees for this). Many clients ignore these idle threats, as they know that most accountants and their staff will work day and night, weekends included, to serve their clients and meet their expectations; even though they are incurring additional costs for overtime and other expenses. Much of this last minute work is in fact, less profitable than the work that can be scheduled in the ordinary course of business.
Most CPAs charge the same rate regardless of when work comes in, or when the services are performed, even when incurring additional expenses. All work is not the same, and CPAs should charge additional fees for work that is more difficult to complete because of client procrastination. Here's the policy I recommend you use to manage the last few weeks before tax filing deadline:
When clients wait until the last few weeks before the filing deadline to bring in their information, we incur additional overtime pay and expenses to get tax returns completed by the due date. Returns that come in after April 1st will be billed a XX% surcharge to cover these additional expenses. We sincerely appreciate your business and thank you for your understanding.
Typically accountants ask me what the surcharge should be. I suggest 50% as it would be enough to get most clients’ attention. Of course any clients that don’t want to pay the additional fee can simply bring their work in on time. Give it a try, it just might work!
If you have any thoughts or comments, or if you have any other ideas to get clients to bring in their information earlier, share your ideas.