Five New Client Warning Signals You Should Not Ignore

As a new freelance bookkeeper, accountant, or other entrepreneur in the service or consulting business, you may be tempted to accept any client, just to get your business started. However, not all potential clients are the kind you want. Beware of the following warning signs:

1. Client is not current with income tax or payroll tax returns. When meeting with potential clients, always inquire about the status of income tax and payroll tax filings. If the client is cheating, ignoring, or lying to the IRS, they will almost certainly do the same to you.

2. Client is not current with basic accounting tasks, such as bank reconciliations. Bank reconciliations are a basic accounting function. Legitimate business owners know this and are careful to see that the task gets done in a timely manner. If you have a potential client who is not current with this task, it is an indication that he does not take the accounting side of business seriously. He may therefore not take you, your work, or your invoices seriously either.

3. Client's business cannot be located through an Internet search. Many legitimate business still do not have websites. However, this, coupled with one or more other items from this list, can be an indication that the client does not take his business seriously, and may not take your business seriously either.

4. Client's business is not listed in the White Pages. A White Pages listing is the most basic form of listing a business can have. If the client cannot be found there, then this gives the strong impression that the client is hiding. Hiding from what? Probably the IRS. See #1 above.

A few potential clients will fall into several of these catagories. If you do not wish to work for them, then don't. However, there is one tactic you can try: have them pay for your services up front. If they agree, then it's very possible they are trying to become legitimate. Don't be skimpy or shy about the sum of money you request, and make sure the check clears your bank before you begin any work.

If they don't want to pay up front, or if their check does not clear your bank, then this fact becomes the fifth and last item on this list.

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