Art of Accounting: Growing with a Client

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IMGCAP(1)]Last week I told the story of how we were hired to prepare corporate tax returns at a much higher fee than the client said they wanted to pay. This client grew to become our largest client. Here is how it happened.

We completed the initial work earlier than the deadline, raising the confidence level with us. We were then asked to bid on a system evaluation of a small retail chain they owned and were thinking of expanding. This was also a fixed fee. Next came an audit of their employee benefit plan, then some pricing consulting, and a flow of continuous phone calls with tax and accounting questions and eventually an audit of their company.

Then they were going to merge with another firm of the same size and we were asked to get involved in the accounting mechanics. No bid was requested and no fee suggested, as if to say, “Let’s see what the time comes to.”

We not only got heavily involved, but we ended up leading the merger team. When we presented our time-based bill, it was paid. From that time forward, all our billing was on a time basis. This client grew to become our largest client for a few years in the 1990s, with a fee almost triple our second largest client.

The takeaway is very simple. Do the work right and timely and be responsive to the client. Treat every client as if they were your most important client and that might happen. It did for us.

A point of interest with the first job was that their books were closed by the end of January, and they did not want an extension for the returns due March 15. Well, someone has to be first. Since this was extra work, we wanted to get it out of the way before we got very busy with tax season, and we would get a good check when we finished. The work was delivered by the end of February.

A comment about another client: We had a client who was the general partner in a bunch of real estate partnerships. One of the limited partners was a major investment banking firm. Well, as I said above, someone has to be first. This was the second year we had this client.

The first year, we had delivered the returns a couple of days before April 15. While we were upset about our “late” delivery, the client was happy since the prior accountant always filed extensions, getting the final returns to the client in September.

The second year, we just happened to work on their return first and we delivered the returns by March 1. The limited partner called me and asked me to come to his office when I was in the city. I made an appointment for the next afternoon. When I met with him I was nervous that he was upset. He asked me some questions like a brief due diligence check.

He then told me he never had received returns from any CPA firm so quickly and then gave us work to file final returns on dozens of burnt-out tax shelters. That work continued a few years at our full rates.

Edward Mendlowitz, CPA, is a partner in WithumSmith+Brown, PC, CPAs. He has authored 20 books and has written hundreds of articles for business and professional journals and newsletters plus a Tax Loophole article for every issue of TaxHotline for 27 years. Ed also writes a blog twice a week that addresses issues his clients have at He is the winner of the Lawler Award for the best article published during 2001 in the Journal of Accountancy. He has also taught in the MBA graduate program at Fairleigh Dickinson University, and is admitted to practice before the U.S. Tax Court. Ed welcomes practice management questions and he can be reached at WithumSmith+Brown, One Spring Street, New Brunswick, NJ 08901, (732) 964-9329,

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