I almost choked on my dinner last night when I heard that there are accounting firms out there charging a $45 “handling fee” for their part in forwarding on the $900 stimulus payment. What on earth are they thinking?
I have been involved in accounting firms for the past 20 years & I have always hated when firms tried charging clients a “handling fee” when they get tax assessments and the like from the tax office.
As the assessment goes from the ATO to the accountant’s mailbox to reception to partner back to reception & then eventually out to client, the process will take 3 to 4 days. Accountants will defend themselves and say that the ATO gets it wrong from time to time so there is a need to check the assessment. Fair enough 20 years ago when calculations were done manually. But in this day & age of computers and self-assessment, I reckon the ATO are correct in 99 percent of instances. So that is 3 or 4 days wasted that the client waits patiently for that cheque to arrive to pay for their rego, credit card bill or holiday. My firm has always had a simpler process where we show the client’s address as the mailing address for the ATO. We figure that if it was wrong then the client would contact me & we can sort it out then. And they get their refund cheque 4 days earlier.
So when the “Kev 07” stimulus payment got announced a few months ago there were alot of tax agents – who had their business address and trust bank account as the details for all their clients – that jumped up & down about it being wrong and how it would be a waste of administration resources during a busy time of year. So the ATO listened & told them the process to change the default address to the client direct, together with the client’s bank account. I got the notice from the ATO a few times. The ATO even placed adverts in the newspapers telling the public the same. So put simply it is nothing more than poor practice management for accounting firms to get a ream of $900 cheques arriving in their office. Yet they now have the hide to charge $45 for their poor practices??
I have also been wondering how these firms even came to the $45 figure to charge clients as well. It is hardly rocket science work, so you would be paying the pimply faced teenagers in the office to do it. Now I reckon that even an inefficient office clerk – if they are given 1000 cheques – could get a stimulus payment sent to a client, on average, every 3 minutes. So that’s 20 sent out per hour – or a handy $900 hour’s work! Pretty handy profit margin when you are paying that office clerk under $20 per hour isn’t it!!
The whole “handling fee” just reeks of poor client service (and poor understanding of the current economic situation) by these accountants. Their attempted money grab will backfire badly on them and I can assure you that they will lose alot of clients in the coming tax season. Thanks guys for sending customers our way!
What would you do if your accountant tried to pull this stint? Would be simply pay their $45 fee and shut up … or would you walk? I know what I would do!