A journalist once asked me “What is the worst mistake accountants can make when they are trying to ‘close’ a prospective client?”

Normally I have prepared for the most likely questions I will be asked when I am being interviewed. This one was not on my list as it was not closely related to the main topics we had been discussing. Still, I had to find a reply.

I’ll share what I said in a moment.

Thinking about the issue subsequently I constructed this list of 14 business development related mistakes that are all too easy to make:

  1. Taking on clients you don’t trust
  2. Taking on work you don’t have time to do
  3. Making promises you can’t keep
  4. Failing to check the client can afford your fees
  5. Failing to ensure the client accepts your fee rates are reasonable (i.e. is the client willing, as distinct from able, to pay your fees?)
  6. Devoting significant time and effort upfront without seeking a payment on account
  7. Agreeing a fixed fee without adequately scoping and limiting the work it is intended to cover
  8. Starting work or giving advice before completing the AML identity verification process
  9. Failing to contact your predecessor (if there is one) to see if there is anything you need to know that could impact your decision to take over the client from them
  10. Quoting a low fee to win the client and hoping you can raise it to a commercial rate in the future
  11. Not ensuring that mutual expectations are discussed and agreed with the client – risking disappointment and frustrations down the line
  12. Failing to clarify whether the client expects you to personally give advice on technical challenges that go beyond your experience and knowledge (normally it’s fine to outsource such issues and to bring in experts as and when required)
  13. Failing to conduct due diligence that might reveal unsavoury information about the prospective new client or their business
  14. Failing to follow up to assess prospect’s reaction to a fee quote/proposal and assuming that ‘no news’ is ‘bad news’.

I suspect this list is incomplete. But which of the above do you think I identified, off the top of my head, as the one most serious mistake that accountants make when talking to prospective new clients?

When I reflected on the list I realised that my reply to the journalist encompassed a number of the above mistakes.
I simply said that the worst thing an accountant can do is to ‘wing it’.

What I meant by this is where an accountant pretends to have relevant knowledge and experience sufficient to win the client over. It also includes failing to prepare adequately for an initial meeting and that’s not good either.

Pressures and benefits
I understand the pressures to ‘wing it’.

These include the risk of losing the prospective client if you admit that you do not have specific experience or knowledge.

And sometimes the pressure of the moment is such that you may agree with the prospect without thinking through the consequences – e.g. of agreeing to prioritise work despite conflicting client obligations and commitments.

It is clear from many of online forums and discussion threads that some accountants ‘wing it’ in the hope that everything will work out in the end. The approach seems to have been: “Once the new client is ‘on board’ we can research what we need to be able to do to support them or to address their questions”.

Downsides
I think that if you ‘wing it’ one of four outcomes will follow:

  1. The client never finds out
  2. The client thinks they must have misremembered what was said at the outset
  3. The client finds out but appears not to mind
  4. The client is upset that they were lied to

Clients’ memories are fallible. Often they will remember what they wanted to hear as distinct from what an accountant actually said to them. This is an important reason why it can be so valuable to confirm key elements of what you will do for them in writing. So that there is contemporaneous evidence of what you promised to do.

It’s also probably quite common that the client never finds out that the accountant was winging it. This could be because the accountant sources the necessary information and support in good time to provide the necessary advice. And when that happens, as long as the research generates up to date rules and advice, hopefully there are no adverse consequences so all is fine.

Three concerns
I have three main concerns with the idea of winging it:

  1. The poor client who takes on an accountant who is not able to do what was required. Many such people just walk away ‘scarred’ by the experience, out of pocket and yet still needing the help that prompted them to approach you originally.
  2. This leads on to the potential impact on the reputation of our profession if ex-clients spread the word and complain about accountants over-promising and under-delivering.
  3. The accountant who is so lacking in self confidence that they are unable to be truthful. I can understand why this happens. But how far removed is this from those who deliberately set out to deceive?

A lack of self-confidence is key here I think. I would prefer it if accountants had the confidence, experience and communication skills to be honest with prospects and clients from the outset.

You don’t have to claim to know more than you do. You do need to be able to inspire confidence when you confirm that you will be able to source the necessary information. There is no shame in admitting that you are not superhuman.

Is winging it worth the risks and downsides?

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