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Nearly half of over 6,000+ small- and medium-sized practices (SMPs) from over 150 countries that responded to the 2018 IFAC Global SMP Survey identified pressure to lower fees as their top significant challenge. The IFAC Guide to Practice Management for Small- and Medium-Sized Practices provides comprehensive guidance to SMPs, including detailed material covering firm planning, how to grow, client relationship management and risk management.

This is the third of three-part series addressing this critical area and covers credit control, collection techniques and dealing with conflict. The first part ‘The Importance of Client Selection and Relationship Management’ featured client classification and the importance of engagement letters and the second ‘How to Price Client Engagements and Increase Firm Profit’ highlighted strategies to increase fees and value pricing.

The articles are a result of discussions at recent IFAC’s SMP Committee meetings, which included practitioners from around the world sharing their perspectives and insights on client selection and relationship management.

Credit Control

The practice should develop a credit policy that applies to all clients and specifies clear terms and conditions, which the clients are made fully aware of. The policy may vary per country and needs to be appropriate for each jurisdiction. For example, in some countries and in certain industries it can take 6-8 months for firms to collect their fees. One tip is to consider  the standard business practice for making payments. For example, many businesses make a payment run at the end of a month, so if a practice raises an invoice on the 30th, it will miss that month and have to wait until the next. However, if the invoice is raised on, say the 20th, it can often be paid the same month even if the firm’s terms are 30 days.

Prospective clients should be screened in advance to ensure they are able to pay and flexible arrangements could be considered for the firm’s larger clients. Staff also need to be adequately trained and informed about the policy, including how to enforce it.

Collection Techniques

The following techniques should enable more successful collection of payments:

  • Explain the firm’s credit terms and expectations clearly from the outset and make sure the clients understand them.
  • Quantify the fees in advance where possible and provide payment alternatives.
  • Follow up debts systematically and frequently.
  • Replace the aging classification of your debtors; instead of “Current, 30 Days, 60 Days, 90 Days, 90+ Days,” use only “Due Now” and “Overdue.”
  • Commence follow-up early and instigate a collections process, which requires, possibly, regular weekly attention. Some firms even charge interest on late payment of fees for repeat offenders.

Fundamental Rules

  • Invoice as close as possible to the time the service is delivered.
  • Start the follow-up process early. Contact the client in advance of the due date to make sure there are no problems and the invoice will be paid within the firm’s terms.
  • Don’t wait to follow up. When the account is overdue, start reminding the client that payment is expected.
  • Always be courteous and professional.
  • Most clients are honest and will pay if they know they have to.
  • A series of gentle, non-confrontational reminders will get most clients to pay.
  • Be persistent and consistent—this is essential.
  • Consider the benefits of offering incentive options, like small discounts for early or prompt payments.

The process is all about communicating with clients to make sure they are fully aware of the firm’s requirements. One of the secrets of effective debt collection is to have a system that makes it as easy as possible for clients to pay on time. A good collection system starts with the initial client contact, moves through the whole workflow process to invoicing and then to any necessary follow-up. Additional options to consider are transferring clients onto direct debit arrangements or agreeing a payment of a fixed amount of the fee on a monthly basis.

Dealing with Conflict

It is important to be aware of how to communicate with clients on fee issues and how to avoid escalating the issue by negotiating a solution for both parties. The following 7 methods are helpful to apply in a number of ways:

1. Don’t react, respond!

  • Keep yourself calm in the present moment.
  • Breathe deeply to compose yourself.
  • Maintain your composure; be receptive.
  • Keep track of your emotions, reactions and body language.
  • Consider how you are coming across to the other person.

2. Let your position go

  • Don’t be defensive.
  • Respect the other person’s need to express how he or she feels.
  • Move aside from your position for now.
  • Be prepared to be flexible, and consider options.
  • Ask, “What would it take to solve this issue?”

3. Focus on the other person

  • Listen actively and reflect feelings and the meaning he or she has expressed.
  • Listen so that people can and will talk.
  • Are you really listening? Is that clear?
  • Acknowledge the importance of the other person’s issues and concerns.

4. Seek clarity

  • Check, clarify and confirm by asking open and reflective questions.
  • Honestly explore problems, effects and possible causes.
  • Look for opportunities in what you are hearing.
  • What would they like? What would they not like?
  • See the problem in a broader context. Are people seeing the whole picture, or just their own point of view?

5. State your position

  • Explain how it is for you, using statements which clearly state your position.
  • Stay in tune with your values, principles and objectives.
  • Express your own needs and concerns assertively, but not aggressively.
  • Attack the problem, not the person. Speak so that people will listen, not in angry or aggressive tones.
  • Be soft on the people, hard on the problem.

6. Look for a win-win outcome

With a “win-win” outcome, both parties’ needs and concerns are respected.

  • What are the best possible options to meet both parties’ needs?
  • Identify areas of “common ground” and build from there.
  • What will help achieve solutions that are mutually satisfying?
  • Would more time or information help?
  • Identify and work on the issues causing the “blockages.”
  • If possible, work together for change, or you may agree to disagree.
  • Be creative, look for possibilities. What’s the most positive outcome you can both achieve?
  • Get commitment and agreement on the next steps.

7. Maintain the relationship

  • Review progress and follow up.
  • Take time to maintain and strengthen the relationship.

Conflict resolution can be a big issue—but there are tools and techniques for dealing with it. The firm’s relationship with clients is important and has far-reaching consequences. By gaining a better understanding of conflict, and ways in which to handle it, the firm will be better able to cope with these situations if they arise, and continue a satisfactory relationship with the client. But, like all skill-sets, partners and staff will need to be properly trained in this area, and with numerous practices and guidance, better outcomes can be attainable by firms over time. 

The Global Knowledge Gateway includes a number of other articles, videos, and resources on these topics, including:



George Willie

George Willie became a member of the Small and Medium Practices Committee in January 2015. He was nominated by the American Institute of Certified Public Accountants (AICPA).

Mr. Willie is the managing partner of Bert Smith & Co. He has over 40 years of experience specializing in the audits of healthcare, government, and not-for-profit entities.

Mr. Willie has served in numerous leadership positions within the AICPA, including chair of the Private Companies Practice Section Executive Committee, member of the Board of Directors, member of the Board of Examiners, secretary of the Political Action Committee, and chair of the Minority Initiatives Committee.

Mr. Willie earned an MBA from American University and a BBA in accounting from Howard University. He is a licensed CPA in the District of Columbia and US Virgin Islands, a Chartered Global Management Accountant (CGMA), and a Certified Government Financial Manager (CGFM).

Christopher Arnold


Christopher Arnold is a Director at the International Federation of Accountants (IFAC). He leads activities on contributing to and promoting the development, adoption and implementation of high-quality international standards, including the Member Compliance Program, Intellectual Property and Translations. Christopher is also responsible for IFAC’s SME (small- and medium-sized entities), SMP (small- and medium-sized practices) and research initiatives, which include developing thought leadership, public policy and advocacy. He was previously an Audit Manager for Deloitte and qualified as a professional accountant in a mid-tier accountancy practice in London (now called PKF-Littlejohn LLP). Christopher started his career as a Small Business Policy Adviser at the Association of Chartered Certified Accountants (ACCA).