Knowledge Centre

1. Handling Late-Paying Clients: Professional Communication, Interest Calculation, and Ethical Service Suspension

 A qualification gets you in the door. A designation keeps you in the game — and makes sure people pay you what you’re worth. 

2. Purpose and Scope 

This help sheet is intended for Business Accountants in Practice, Chartered Business Accountants in Practice (CBAPs), and Chartered Bookkeepers (CBKs) who manage client accounts and invoicing. It provides practical guidance on how to address overdue payments professionally, apply fair and transparent interest charges, and ethically suspend services where clients persistently fail to pay. 

3. Background and Context

Managing client payments forms part of maintaining sound professional and ethical business conduct. Under Section 29 of the Companies Act 71 of 2008, financial reporting must present a fair view, and professionals are expected to uphold integrity and objectivity as required by the IESBA Code of Ethics (adopted by CIBA). The Protection of Personal Information Act (POPIA) and Financial Intelligence Centre Act (FICA) further require that any correspondence or client management be handled confidentially and securely.

4. Key Principles

Integrity: Communicate honestly and respectfully with clients at all times.
Objectivity: Avoid letting frustration or financial pressure influence tone or judgment.
Professional Behaviour: Follow engagement terms and CIBA’s Code of Conduct when applying late fees or suspending services.
Fairness: Apply interest and payment policies consistently across all clients.
Documentation: Keep all reminders, calculations, and notices properly recorded for transparency and accountability.

5. Practical Guidance and Examples

The helpsheet provides sample email templates for reminder notices and suspension notices, a clear formula for interest calculation aligned with ethical practice (Repo + 2–5% guideline), and a step-by-step communication strategy:
1. Friendly reminder
2. Formal reminder
3. Notice of suspension (if necessary)
Example: Before suspending services, ensure that at least two written notices have been sent and a reasonable grace period (7–14 days) has been provided.

6 Practice Aid or Template

Included within this document: sample client reminder email wording, interest calculation example and formula, and suspension notice example. These templates may be adapted for use on firm letterheads or client management systems

7. Frequent Issues and FAQs

Q1: Can I charge interest without prior written agreement?
A: No. Interest may only be charged if payment terms were clearly communicated and accepted.

Q2: How long should I wait before suspending services?
A: A minimum of two written notices and a 7–14 day grace period are recommended.

Q3: What if the client disputes the invoice?
A: Suspend collection efforts until the matter is clarified. Continue communication in good faith and document all discussions.

8. Related CIBA Resources

• CIBA Code of Conduct for Members
• Webinar: Managing Clients and Ethics in Practice
• Accounting Weekly Article: “When Doing Right Costs You – Ethical Challenges for Accountants”
• CPD Module: Practice Management and Client Relationships

9. References

• Companies Act 71 of 2008
• IESBA Code of Ethics (as adopted by CIBA)
• POPIA (Act 4 of 2013)
• FICA (Act 38 of 2001)
• CIBA Code of Conduct and Practice Management Guidelines

10. Disclaimer

This help sheet provides practical guidance for CIBA members. It does not constitute legal advice. Members must apply professional judgment, adhere to engagement terms, and consult relevant laws and standards when managing client relationships and overdue accounts.