Managing Fee Issues.

• Position: Tip of the month

Claims experience shows that lawsuits to collect fees, and counter-suits in response to them, almost always result in the CPA spending far more in attorney fees and in lost billable time than is warranted for the fees owed to the CPA.

Fee collection issues can be proactively managed by having a signed engagement letter communicating billing and collection policies, including stop-work provisions to be enforced if the client does not pay in accordance with the policies. By enforcing stop-work provisions, the CPA can prevent fees from building up to the point where the CPA believes a lawsuit should be filed to collect them. Include mediation clauses in the letter for all disputes, and binding arbitration clauses for fee disputes only.

Monitor the balances due from...