Accounting
Death to accounts receivable | Accounting Today
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Why do accounting firms allow their clients to treat them like interest-free lenders? Unlike wealth managers, attorneys and other professional service providers, accountants routinely perform months of labor-intensive work before spending even more valuable time chasing down payments. Isn’t it time to rethink this outdated model?
I come from the wealth management industry. There’s no accounts receivable in that profession because we bill clients a fixed percentage of assets under management. Most attorneys don’t have A/R either. They require clients to pre-pay them a retainer and when that retainer runs out, clients must re-up if they want the firm to keep representing them.
So why do accountants essentially tell clients: “I’m going to do a whole lot of difficult work for you, and then start hounding you for weeks and months to get paid”? Why is that even a negotiation? It doesn’t sound very professional, does it?
When it comes to slow receivables, many CPAs tell me clients aren’t paying promptly because they want time to review the bill. That’s a copout. Clients are super busy. They’re not paying close attention to their voicemails and emails (including your invoice reminders). After two or three months of “reminders,” they often can’t remember what you’re billing them for. Then you have to go through your bill with them line by line and validate your own fees (and your value). That can be an awkward conversation because after so much time, they’ve often forgotten about all the great work your team did for them. You may have forgotten, too.
We’re not bail bondsmen or the cable company. We’re licensed CPAs. We shouldn’t be using our valuable time and people resources to hound clients for money. It’s degrading for the firm and insulting to clients as well. Fortunately, there’s a better way.
Pre-authorized billing
In your proposals for new clients, make sure they provide you with their bank account or credit card information so you can keep it on file for billing. If you have a set monthly fee for ongoing work, that’s great. You put that amount in your proposal and you automatically bill the client the agreed upon rate on a consistent monthly or quarterly basis. If you’re doing a client’s tax return once per year, you clearly state expectations in your proposal: “Once the agreed upon work has been completed, we’ll email you a detailed invoice of all the work that’s been done. If you have any issues, let us know ASAP. Otherwise, your account will be billed for the invoiced amount in 14 days.”
Again, you’re giving clients two full weeks to review the bill. If they don’t reach out to you with questions or issues, you bill them in full. Occasionally a client will question some charges on their invoice. That’s fine. You’re a professional. Take the time to go over the fees with them and make adjustments as needed. Most of the time clients don’t question their invoices. They trust you and value your expertise. They just want you to make their life easier.
But even in this frictionless Amazon and Netflix age, many accountants don’t want to do pre-authorized billing because they fear some clients may be upset about it. Sure, there will always be a small percentage of clients (say 5%) who hate change and every new wrinkle you roll out. Another 5% will love everything you do no matter what. But the 90% in the middle won’t care as long as you frame it properly. It’s just a big bell curve.
Importance of framing
After you make the move to pre-authorized billing, you must explain clearly to clients why you are changing your billing method. For instance, you could say, “We’re moving to a pre-authorized billing agreement. This does not mean we are going to bill you without telling you. It simply means that as the work is completed, we’re going to send you the invoice, letting you know what the bill is going to be. If you have any issues, you’ll have ample time to reach out to us to discuss. If not, then for your convenience, we will go ahead and process this payment transaction for you.” Feel free to tweak this explanation above as you see fit. Just make sure you send it before changing your billing. Another benefit of pre-authorization is that it’s a good weeding-out tool. If you have clients who consistently question your charges or don’t want to pay their bills on time, that’s a good sign they’re not great clients and you need to let them go.
Death to A/R is really about making your firm’s life better and your clients’ lives better. If clients understand the value you’re providing them, why make it difficult for them to pay you? And if they’re going to disagree with the charges, they’re going to reach out to you anyway. Either way, everybody’s in a better situation with pre-authorized billing and no more A/R.
As our client’s most trusted advisor, we shouldn’t have to call clients and remind them how much they owe us. Our job is to remove friction from all aspects of their financial lives, including paying their accounting and tax prep fees. It means you, your team and your clients spend less time chasing each other down, and more time talking about the things that deliver value.
As with any new strategy or process you implement in your firm, there are going to be some hiccups. But these are hiccups you address from a position of trust and mutual respect. You work through those issues together and put everyone in a better position. I’ve learned throughout my career that relationships are stronger after you’ve gone through (and resolved) conflict together than if you never had conflict at all. You and your team do great work. Don’t make it hard for clients to pay you. What is your firm doing to reduce receivables? I’d
Big Four firm PwC announced new agentic AI capacities, including a model that proactively identifies areas of value leakage and acts inside the tools teams already use to fix them itself.
The new solution,
The software, which is supported by PwC’s recently released
The system connects directly into ERP environments, continuously monitors key metrics, and acts inside the tools teams already use. For example, a supply chain agent might detect rising shipping costs and automatically reroute deliveries to reduce spend. Finance agents can spot and correct billing errors before they reach the customer. Clients typically see measurable efficiency gains in the first quarter, with continued improvements over time as the system learns and adapts.
“Too many transformations still rely on one-off pilots and stale data, stretching the gap from insight to impact and suffocating ROI,” said Saurabh Sarbaliya, PwC’s principal for enterprise strategy and value. “Agent Powered Performance flips the economics by distilling PwC’s industry transformation playbooks into AI agents that turn static insights into compounding gains, without rebooting each time.”
Agent Powered Performance is platform-agnostic and built on an open architecture so it can work across different LLMs based on client preferences and task-specific needs. It works with major enterprise platforms including Oracle, SAP, Workday and Guidewire.
Agent OS Model Context Protocol
PwC also
By integrating this standard, agent systems registered as MCP servers can be used by any authorized AI agent. This reduces redundant integration work and the overhead of writing custom logic for each new use case. By standardizing how agents invoke tools and handle responses, MCP also simplifies the interface between agents and enterprise systems, which will serve to reduce development time, lower testing complexity, and cut deployment risk. Finally, any interaction between an agent and an MCP server is authenticated, authorized and logged, and access policies are enforced at the protocol level, which means that compliance and control are native to the system—not layered on after the fact.
This means that agents are no longer siloed. Instead, they can operate as part of a coordinated, governed system that can grow as needs evolve, as MCP support provides the interface to external tools and systems. This enables organizations to move beyond isolated pilots toward integrated systems where agents don’t just reason, but act inside real business workflows. It marks a shift from experimentation to adoption, from isolated tools to scalable, governed intelligence.
Research Composer
Finally, a PwC spokesperson said the firm has also launched a new internal tool for its professionals called Research Composer, a patent-pending AI research agent embedded in the firm’s ChatPwC suite, designed to accelerate insight generation by combining web data with PwC-uploaded content.
Professionals will use the Research Composer to produce in-depth, citation-backed reports for either the firm or its clients. The solution is intended to enhance the quality of client work by equipping teams with research and strategic analysis capabilities.
The AI agent prompts users through a step-by-step research workflow, allowing them to shape how reports are packaged—tailoring the output to meet strategic needs. For example, a manager in advisory services might use Research Composer to evaluate white space opportunities across industries or geographies, drawing from internal reports and up-to-date market data.
Eide Bailly, a Top 25 Firm based in Fargo, North Dakota, is growing its presence in the Pacific Northwest by adding Traner Smith, based in Edmonds, Washington, effective June 2, 2025.
Traner Smith’s team includes two partners and 16 staff members and specializes in tax compliance and advisory services. Financial terms of the deal were not disclosed. Eide Bailly ranked No. 19 on
Eide Bailly already has offices in Seattle, but hopes to grow further in the Pacific Northwest. “We’re pleased to welcome the talented team at Traner Smith to Eide Bailly,” said Eide Bailly managing partner and CEO Jeremy Hauk in a statement Monday. “Their expertise with high-net-worth individuals, real estate and privately held businesses aligns well with our strengths, and their client-centric approach is a perfect cultural fit. Having an office in Edmonds, Washington, is a great complement to our existing presence in Seattle. Together, we’re poised to deliver even greater value to families and businesses in the Seattle metro area.”
“Joining Eide Bailly is a natural next step for us — it provides access to deeper technical resources in areas like state and local tax, national tax, succession planning and international tax while allowing us to continue the personalized service our clients value,” said Kevin Smith, a partner at Traner Smith, in a statement.
“With this expanded support and platform, we’re excited to grow our reach, elevate what we do best, and help more clients than ever before,” said Shane Summer, another partner at Traner Smith, in a statement.
Eide Bailly has announced several other mergers in recent weeks. Earlier this month, it added
In 2023, Eide Bailly added
Top 100 firm
“We began working with Knuula in Spring 2024 to streamline our engagement letter process,” said Don Murphy, Managing Member of BMSS. “It quickly became clear that Knuula was not only a strong solution for us, but also an ideal partner in advancing industry-wide automation.”
While the specific terms of the deal were not disclosed, a spokesperson with Knuula said that, after this investment, BMSS and a collection of 21 of their partners now own 13% of the company. The investment represents not some passive revenue deal but an active collaboration between the two companies, with the spokesperson saying they will be working closely together on things like product development, new features, improvements, and networking.
The deal comes about a year after Knuula integrated with QuickFee, a receivables management platform for professional service providers, which allowed users to have engagement letters directly connecting to their QuickFee billing platform, tying the execution of the letter directly to the billing process.
“We’ve long sought to partner with a firm focused on strategic innovation in the accounting space,” said Jamie Peebles, founder of Knuula. “To develop a perfect solution for large firms, it is ideal to have a partner that is willing to work closely together and iterate quickly. This requires constant feedback between our two teams. The IT team from BMSS worked with our development team constantly and helped us iterate rapidly. We also had consistent input from partners, manager, and administrative staff to help us make valuable changes to Knuula. BMSS was a perfect partner for us.”
PwC AI agent acts proactively to preserve value
Eide Bailly merges in Traner Smith
BMSS announces investment, collaboration with Knuula
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
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