I had a meeting recently with an accountant and was led into his office while he was on the phone. I overheard him telling a client that he wouldn’t be able to get his work done as promised because his humongous client needed something done right away, and “you know how that is!”
Ugh! He just guaranteed that the client on the phone would never ever recommend him to anyone. He also told that client he is not important. Additionally, he was discourteous.
Clients understand they might not be your largest or best client, but they’re also very important to themselves and want to be treated with respect and courtesy. They like to be made to feel important. To me, every client is important and I treat them as such—they all contribute to my income and that is also important to me.
Many accountants, whether they are sole practitioners or partners in national firms, have one or two disproportionately large clients they feel beholden to and they tend to overserve because of a constant fear of losing them. In many situations this drags down their practice and inhibits growth.
There are a few ways to handle this:
1. Keep the status quo, but then the firm likely will not grow and also will become an unwitting captive to the client.
2. Drop the client—that seems excessive and stupid.
3. Organize the client’s work into segments, assigning responsibility to different people. The primary engagement partner would be the “quarterback” coordinating all of the services.
4. Realistically schedule your other clients’ work, trying to avoid conflicts with crucial deadline periods.
5. Keep in mind that a large client accounting for 60 percent of your revenues still leaves the remaining clients accounting for 40 percent of the revenues. That is still a sizable chunk of work, and while each client in that grouping might be small and not considered “meaningful,” maintenance of that group is important and represents substantial volume and should not be downplayed. An additional comment is there likely will be very few sleepless nights because of any client in that group while there might be many because of your very large client.
6. Do a profit analysis on that large client. I’ve seen many of these situations where the billable rates and fees are substantially lower than the balance of the practice, with the net not as meaningful as the inputs. I am not suggesting the client be dropped, or the fees be drastically increased, but a better sense of the meaning of the client regarding cash flow, bottom line and staff utilization can be helpful in assessing the relationship and how it fits into the practice as a whole, rather than a separate practice within your practice. In terms of staffing, leverage should be strategically employed with the very large client. If it isn’t, there might be an opportunity to increase profits and reduce stress on higher-level people.
These are some suggestions. Obviously if you have a disproportionately large client, it is important for you, but do not overlook the rest of your clients.
Edward Mendlowitz, CPA, is partner at
