Now, imagine for a second that Andi is a potential client and you are awaiting a rose that signals that she has chosen you to be her accountant. But she doesnít have a rose. Itís a bundle of dandelion weeds and some poison ivy. Will you accept her as your client? †††††††††††††††††††††††††††††††††††††††††††††††††
This year, for the first time in many years, my clients are getting serious about avoiding new clients that donít fit certain criteria and firing ďDĒ clients. Itís apparent that tax season compression will not get better for the foreseeable future, despite our best efforts at variable and flexible staffing. In addition, our confidence about the economy and our firms has recovered and we no longer feel the need to accept each and every client that comes our way. Finally, as staff retention becomes an issue again, we canít afford to have clients that treat our staff badly and cause them to leave.
So, how will you stop accepting dandelions? Itís important to consider several factors when firing D clients.
First, consider that a D client is not necessarily a small client. It can be a large client that doesnít pay on time, ignores our advice, argues over fees, has low realization, treats staff poorly, or has a bad reputation in the business community. So, consider many factors when you are deciding who you will be letting go.
Second, consider how you will fire the client. Are you referring them to another CPA? Sending a letter? Making a call? Visiting them in person?† And what are your talking points? You need to carefully plan each discussion. Or, are you simply raising their fees to a point they will find unacceptable? Even this tactic requires some planning around communication, because itís quite likely they will confront you. Your planning and communication here will go a long way in reducing potential negative repercussions and damage to your reputation in the future.
Third, donít forget that some of your clients that simply have low realization are actually C clients and could become a B or even A client someday. Consider passing these clients to a manager in your firm who can initially improve the realization, but over time can work to develop the client relationship.
Finally, if youíre still not sure you want to fire your D clients, talk to a few accountants who have done it. Iím sure they will tell you that with some careful planning it can be a relatively painless experience. Not to mention, a true relief to not have to deal with that client anymore. And the time they freed up was able to be spent developing better relationships with A and B clients and on marketing for new clients.
Make this the year you prune your client bouquet and get rid of the poison ivy, thorn bushes and dandelions and watch your roses flourish and grow!