Art of Accounting: Family Tree of Clients

Register now

IMGCAP(1)]For those of us in public accounting, there is a continual need to get new clients. Many times we look beyond what we have for the “new” when the growth is there for the taking.

One of the most important ways a practice can grow is for existing clients to recommend new clients. I have always valued such referral sources, and this value surpasses the fees they pay us. They look out for us and help us grow—I owe them!

To get a perspective of the value of this, I suggest you create a family tree of your clients tracing the referral sources. You might have a small 1040 client who referred two other small clients, and one of them referred a midsize business client, whose attorney referred a large client. It all started from that first small 1040 client. Along the way, branches of that tree made referrals so the tree grows, as does your practice.

Question: Do you look at your small 1040 clients as a bother or favor, or as a potential source of your growth?

If you look at your clients as referral sources (which they are, could be or should be), then might I ask you what you are doing to arm them with ammunition to “sell” you? You should make it a point to make every client aware of the depth and breadth of your services. Talk to them in ways that relate to them, their interests and potential as a referral source.

For instance, if your client works for a manufacturer, let her know that you have expertise in manufacturers and can assist with cost accounting systems, inventory control and management, special tax treatment and acquisitions. If your client has wealthy parents or grandparents, let them know of your qualifications with financial and estate planning. If your client might eventually want to own a business, continuously ask about their progress and if they need help. Many people start or buy businesses with partners. Try to get involved at the earliest stages with your clients and any potential partners. Clients that work in a not-for-profit organization should be told about your specialization in auditing NFPs and assisting with budgets and tax beneficial methods for potential donors. The point is to make clients constantly aware of your capabilities in areas that they might be or become involved in, know people or be able to refer you.

Many CPAs are now offering “financial services,” which is a dignified way of saying they sell products such as mutual funds, variable annuities and life insurance, or manage investments. In that case every client is a potential customer, and the tax preparation can be likened to the lead in. Some firms even use the preparation as a loss leader to reach potential clients.

For as long as I can remember, I have managed my family tree of referrals and developed marketing programs and methods to support my clients in their desire to recommend me and my firm. This is a process that works, is real, and is easy. I suggest making up your family tree of clients if you haven’t already been doing it, and working to strategically promote your firm to get referrals from all your clients, especially those that have been very kind to you.

Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, published by and “Managing Your Tax Season, Third Edition,” published by the AICPA. Ed also writes a twice-a-week blog addressing issues that clients have at Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or

For reprint and licensing requests for this article, click here.