The May cover story for Practical Accountant focuses on how a number of firms are using formalized testing to determinate if a potential hire is right for a job. It also explores how testing is extending to other aspects of firms’ operations.

It would see natural that these same firms and others would also use a more structured approach to accepting new clients, and even to eliminating unsatisfactory clients. With staff shortages as they are, it would only seem natural that client selection and retention be done more scientifically so attention is paid to attracting and retaining those who will be most beneficial in terms of long-term profitability for the firm.

In order to do so, firms will have to establish objective criteria by which clients can be measured. This could involve the maturity of the business, growth potential, nature of the business leadership, industry type, maturity of the business, breadth of services that could be offered, possibility of being acquired, and the list can go on.

No one client will get a perfect score, and it’s impossible to have all optimum clients. But by establishing criteria, firms will be able to identify when a client or potential client is undesirable, and can also see where clients, especially ones currently important to the firm, stand with regard to objective criteria.
And that is the key, as with testing of potential staff: to bring objectivity into the process and a certain discipline into client selection and retention.

It also forces firms to take a more strategic long-term view and implement proactive steps rather than just reacting as when major clients leave and there is a rush for replacements without adequate attention to their suitability. Throw that consulting services, in addition to traditional tax and A&A services, are being offered to many clients, and that risk management is a greater concern for firms, and increased client evaluation attention can only help in the continued viability of the firm. 

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