Is it OK for accountants to give their less profitable clients the boot and only keep the ones that make their firms the most money?
Brian Murphy, CPA, of Aurora, Ill.-based Murphy & Associates posed that question after reading Liz Gold's Accounting Tomorrow roundup in our sister publication, Accounting Today. One of the items mentioned was a discussion we had on this blog back in late January, "Should Firms Stop Seeking More Work."
Another accountant had asked, "if a firm already has as much work as it can handle and has difficulty finding competent staff, isn't it irresponsible to be looking for even more work?
LG and I disagreed on this topic, but part of my response was that firms could evaluate which clients yield the lowest ROI and cause the most headaches and replace them with more profitable clients.
Here's what Murphy had to say:
" (Accounting Tomorrow editors) as well as many advisors tell CPAs and accounting professionals to 'fire' those less profitable clients and only keep the ones that makes us the most money. That is great, but isn't it part of (our) responsibility to train and help those people
become better clients and business owners.
"If all of us continue to fire all of these clients is the
business world better off. Do they not have loans, tax issues and other
problems that may have led to our current financial and economic
situation? Do they not need advice? Where do they go to get this advice
if CPAs are being advised to launch them because they are not as
"This has always been an interesting dilemma for me. When I have
questioned the marketing and advising gurus, they never seem to have an
answer. I suppose we should just let them fend for themselves, in a
capitalist sort of way."
Murphy brings an interesting perspective to the table.
Perhaps he's looking at the glass as half full. These clients have problems? What can I, as their advisor, do to help them?
And what we're hearing from many accountants is that existing customers are actually asking them for advice in areas they had never asked about before—many of those areas being the one Murphy mentioned.
Intuit released a survey last week that found the accountant-small business relationship has expanded into several new areas as more small business owners seek guidance on personal money management and tips on how to weather the economy.
The survey found that 73 percent of accountants are proactively advising their clients on how to conduct business during the economic downturn, with 66 percent of accountants saying they've increased services they offer, including business consulting, payroll services. tax services. bookkeeping and online accounting.
Are companies receptive to this type of help?
Roughly 80 percent of small business owners said they would feel more confident having an accountant as a close business advisor during this time, according to the survey.
But if Murphy or any other accountant wants to tap into those struggling clients for more services and potentially more money, they better make sure those clients can pay them.What's your take on the issue? Comment in the section below or email us at firstname.lastname@example.org.