Your guide to extending engagement payment terms in Practice Ignition

April 16th, 2020 by Jennie Moore 7 minutes read

Working with your client to extend payment terms during an economic downturn is key to providing a stellar long-term relationship for both parties. Each client relationship and accounting firm is unique, therefore due care is required to determine if deferring payment terms make sense.

During times of economic hardship, it can be difficult to obtain recurring payments from your clients. So, how do you ensure you’re compensated for your work, while establishing a stellar long-term relationship? It allows you to immediately serve your client, while collecting your fees at a later date so that there is a balanced exchange of value.

Given the various government subsidies and initiatives, clients need accounting services now more than ever. By helping your clients navigate and secure government assistance, you’re providing additional value alongside your regular monthly engagement. However, forcing clients to pay your previously arranged fees plus additional out of scope work, may cause them to terminate your services - or worse, put them in a situation where they’re no longer in business.

Many accounting practices are being asked to cut or eliminate their monthly services by clients feeling the economic downturn. By extending payment terms, you retain your client at the set engagement value instead of reducing the value. This not only assists your client long term, but also ensures your firm retains the client and revenue.

Similar to a loan deferral, this concept entails the client providing payment for your services in the future, in addition to your regular payment terms. It goes without saying that any change in scope or terms should be followed up with proper engagement.

How to extend payment terms?

Have a conversation

All good relationships start with a conversation - we recommend using Zoom to have a virtual face-to-face. A conversation is vital to ensure your client understands they’re important to your organization, and that you’re available to help them through their time of need. During this time, it’s important to explain how the various government initiatives will benefit them and how your organization will optimize their funding.

Addressing cash flow is key, selling a service can be off-putting to your client if they cannot generate enough revenue. Our first recommendation is to determine what your client can pay for in terms of your services. Then determine what portion of your services can be deferred for payment at a later date. Repayment can be a lump sum amount or an amortized amount over a set period of time in addition to your regular services.

Establish a Repayment Plan Service

Set up a new Service in your library. Here is an example of one we created for our firm. When creating a proposal simply input the items in brackets for this service item to suit the client expectations.

PI Repayment Services in Library

As set forth in our conversation dated (MONTH, DAY, YEAR) our retainer for managed services to your organization is deferred in the amount of ($) until (MONTH DAY YEAR) in respect to your current economic circumstance regarding (COVID-19). This deferral of (#) (months/weeks) will be repaid in (#) of installments commencing (MONTH DAY YEAR) each (month/week) in addition to our regular service agreement per our regular payment terms.

Creating an Email Template

Next, you may want to create a new email notification specifically for the Repayment Plan. Here is our example using the specific placeholders in Practice Ignition to save you time.

(please note that you’ll have to be on a Professional or Scale subscription plan to create additional advise client of new proposal email templates. If you’re not sure what plan you’re on please reach out to your Account Manager or email [email protected])

Dear {{ contact.addressee| default:contact.name }},

{{ contact.name }} thank you for choosing our firm to assist you with your professional service needs. To assist your organization through this economic time we have created a repayment plan for our managed services to your organization.

{% if proposal.message_text %}

h3. Important Message

{{ proposal.message_text }}

{% endif %}

In order to facilitate this, {{ practice.name }} uses an online fixed fee proposal system that is personalized to your business and includes a summary of our repayment plan of all the services agreed upon in our previous engagement.

h3. Reviewing and Accepting the Proposal.

"Click here to view and accept the repayment plan proposal":{{ proposal.accept_url }}.

The process to accept the proposal is simple. Follow the steps on the screen and if you have any questions, you can ask them directly within the proposal.


Kind regards,

{{ client.partner_name }}

*{{ practice.name }}*

Here’s what this template will look like when sent to your customer via email. It’s fully branded to your firm and contains a link for your client to review your proposal online, provide payment details and authorize a signature.
PI Engagement Email Sample

Writing a Repayment Terms Engagement

Let’s not forget the Terms in which you are providing the Repayment Plan. It’s important that your client understands that this proposal is only for the repayment terms and is not a direct replacement to your previously established engagement. This is especially helpful if you haven’t established your clients in Practice Ignition and want to get started. Below is a brief example of terms for a proposal using the placeholders in Practice Ignition.

Confirmation of agreement for services between: *{{ practice.name }}* and *{{ client.name }}*


This is to confirm our understanding of the revised temporary payment terms of our current engagement.

{{ practice.name }} will continue to provide managed services to your organization during this economic time and defer payment of such services per the details provided in this agreement below:

{{ proposal.service_summary }}

{{ proposal.price_summary }}

h3. Period of Repayment Plan Engagement

This engagement starts on {{ proposal.commencement_date }} and is valid until {{ proposal.end_date }}.

h2. Confirmation of Terms

Please review and digitally sign this letter below to indicate that it is in accordance with your understanding of the payment arrangements.


Yours sincerely,

{% if client.partner_name %}

{{ client.partner_name | signature }}

{{ client.partner_name }}

*{{ practice.name }}*

{% else %}

*{{ practice.name }}*

{% endif %}

I confirm I have read, understand and agree to the terms and conditions set out above.

Signed by: {{ signature.client }}

Name: {{ contact.name }}

Date: {{ proposal.acceptance_date }}

Setting up a Repayment Plan in Practice Ignition

Within Practice Ignition it is simple to create a new proposal for your client with the agreed-upon repayment dates. Be sure to select proposal dates according to the repayment dates discussed with your client.

For example, if March, April, and May services are to be repaid in June, July and August then select the Proposal Start Date as of June 1st and Proposal End Date as August 31st.

PI Setup for Repayment Proposal Dates

After selecting the correct start and end dates, you can:

  • Select the Services tab and add in the new Repayment Plan service from your library
  • Select the Terms tab and pick the new Terms template you created
  • Select the Presentation tab and pick the new Email Template you created

If you need a hand with any of the above, please check out this article: Best Practices For Creating A New Proposal

Repayment Case Study

It’s natural to question if software can assist your practice in building a client relationship while ensuring a recurring revenue source to your firm. The answer is quite simply, yes. Rise Business Solutions in Perth, Australia, accomplished the repayment of over $380,000 and eliminated 100% of its debtors just by implementing Practice Ignition. After collecting their debtors, Rise Business Solutions had a 36% increase in revenue over a two year period and became 80% more efficient in administration, just by using Practice Ignition as an engagement and payment platform. You can read more in this case study.

In closing, before changing the value of your monthly services during an economic downturn, have a conversation with your clients - preferably face-to-face (or a video call). Be clear about your value and what you’ll be doing to sustain their business operations. Consider changing their service options to meet their current economic situation - for example, exchange a payroll service for cash flow planning. If needed, offer a Repayment Plan option instead of reducing your monthly retainer, and be sure it’s compliant by using an engagement platform like Practice Ignition.

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