Brought new client to practice – referral fee?

Viewing 9 posts - 1 through 9 (of 9 total)
  • Author
    Posts
  • #2991377
    Cruz818Cruz818
    Participant

    Hi all, just wanted some guidance if anyone has been in this situation before. In short, brought in a new client to my friend's small practice. I 100% went out and sourced the client and closed the deal. Totally my lead from start to end. Nothing large, $1,500/month for a committed 8 months, plus a one-off $1500 clean-up/establish fee (the books are a mess and we're fixing some back issues).

    I haven't approached my friend yet to ask what is in it for me. Have you worked for a practice, brought in new business solely by yourself, then asked for a referral fee? Or a portion of the ongoing revenue? My friend's practice is setup where we have 3 accountants doing the day-to-day bookkeeping, and he and I are the client managers. So far, it's just been his clients that we work on, but now that I'm getting out and about, I've brought in this one + 3-4 more in the pipeline.

    What have you seen in such situations? I totally get that he's paying the overhead and salaries for the daily bookkeepers, but at some point, I start thinking – should I just be doing these clients on the side as my own?

    Four months and out!

    Wiley for FAR/BEC.  Wiley + Ninja for REG/AUD

    FAR - 77 (2/2018)

    BEC - 79 (3/2018)

    REG - 78 (5/2018)

    AUD - 86 (6/2018)

    #2992880
    monikerncmonikernc
    Participant

    Just have the conversation with your boss/friend. Certainly, you will be able to come to sort of understanding and/or agreement.

    AUD - 93
    BEC - 82
    FAR - 76
    REG - 88
    How have you been?
    Ninja book and MCQs and the forum, all first try! 2016
    Licensed State of Montana April Fool’s Day 2020
    State of Colorado June 2020 - AICPA Ethics 93
    Experience was the worst part of the journey for me. You?
    If you want things to change you have to do something different.
    #2992925
    fsugirl2005fsugirl2005
    Participant

    You definitely need to come to some sort of legal agreement with your friend in regards to you soliciting business. Otherwise, this “friendship” can go south really quick.

    REG - 60,73, Retake 11/13/20
    FAR - 73,74,78
    AUD---74,70,73,71,74,85
    BEC - 11/10/20

    I have been on this journey off and on for over 10 years. I think it's about time that I wrap this up.

    #2993618
    ReckedRecked
    Participant

    Also advise that you get an agreement and get it in writing.
    This has disaster spelled out all over it.
    If I understand correctly, you are an employee, and work for your friend.
    Without your being partner, or equity in some way, you are essentially building his book of business and not leaving yourself in a very good position.

    Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)

    FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
    AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
    REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
    BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)

    #2993801
    vbmer
    Participant

    It is the norm in professional firms for employees (SM, ED, MD, sometimes M or client executive) to go out and source work for the firm. There is no direct compensation for bringing in new business, as it is your job to do so. (some firms like Alvarez & Marsal have revenue-based pay, but that's based off billed hours, not sales) If you want a cut of your sales, you need to discuss partnership. If you want to take clients for yourself, you need to end your relationship with your employer, friend or not.

    AUD - 79
    BEC - 88
    FAR - 89
    REG - 80
    Manager, Big 4 Corporate Finance, CPA (WA)
    #2993897
    Tncincy
    Participant

    I agree with everyone else that a conversation with the friend is necessary other than that, you have no right to expect compensation when it has not been discussed or agreed upon. You will get a handshake and an appreciation drink but real acknowledgement will not happen to your satisfaction. My thing is when you don't know ask the question and see what the friend will do.

    It begins with a 75
    Been here too long as a cheerleader.....time to pass
    #2994041
    Cruz818Cruz818
    Participant

    Hi all, thank you for all your responses. I tend to overthink/over-analyze a lot of things. I spoke to my friend about it.
    His offer is a 30/70 split – I will keep 30% of the revenue and he will keep 70%. He will have his team do the weekly bookkeeping and reconciliations and his senor will do a second review. I will maintain a high level/strategic relationship with the client and will get the 30% for that.

    Four months and out!

    Wiley for FAR/BEC.  Wiley + Ninja for REG/AUD

    FAR - 77 (2/2018)

    BEC - 79 (3/2018)

    REG - 78 (5/2018)

    AUD - 86 (6/2018)

    #2994539
    ReckedRecked
    Participant

    Sounds pretty reasonable for not having to do any of the grunt work.
    You should get it in writing, and also work out who “owns” the client, ie: if you were to exit the relationship with him, but are still the point man on all the accounts.
    You also want to protect yourself, so the senior can't build a relationship as the day to day contact and make your position as point man redundant, and then you are suddenly no longer needed in your current capacity.

    Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)

    FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
    AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
    REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
    BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)

    #2994770
    Cruz818Cruz818
    Participant

    Thanks, Recked. 100% agree on all your points.

    Four months and out!

    Wiley for FAR/BEC.  Wiley + Ninja for REG/AUD

    FAR - 77 (2/2018)

    BEC - 79 (3/2018)

    REG - 78 (5/2018)

    AUD - 86 (6/2018)

Viewing 9 posts - 1 through 9 (of 9 total)
  • You must be logged in to reply to this topic.