Almost every accountant I know will admit to having at least one client they wish they didn’t have to deal with any more. Go on. Try it for yourself. If you knew there would be no repercussions and no financial loss, which of your clients would you prefer never to have to engage with again?
There’s nearly always at least one. I won’t go into the reasons for this here. They are pretty common. Instead let’s just think about how to resolve matters. And, I’m going to assume here, that you have already tried to reason with them and to retrain them.
It’s common to allow the financial challenges to stop you from ‘sacking’ a problem client.
My best tip here is to think about your worst client – the one you would love to no longer be acting for. Draft the breakup email you would like to send to this client. Do not put their name in ‘to’ box so you can’t send the email by mistake!
Ensure you are clear as to what level of fees you will be giving up when you stop acting for this client.
You will feel good creating the email. And then keeping it in your drafts folder will act as a great incentive to seek out new replacement clients. Promise yourself that you will send the email as soon as you are confident you have replaced the fees that will go when you end the relationship.
If this doesn’t incentivise you to seek out new clients, then perhaps you don’t really want to ‘sack’ your worst client!
The other popular solution favoured by many accountants is to hike up the fees of clients whose are paying too little for the stresses caused when dealing with them – in the expectation they will choose to leave you rather than pay more.
All too often I hear from accountants who have done this and found that such clients admit they were simply waiting for their fees to be increased. (“I always thought I was getting good value”). And others who verbally agree to the higher fees and allow the accountant to continue working but the client later refuses to pay the fees having also, by then, found someone cheaper to take over.
So, if you do propose a big fee increase it’s best to also insist that the client authorises new and regular Direct Debit payments. You are perfectly entitled to make clear that this an essential term of doing business with your practice in future.
Please note that this approach can still exacerbate the problem. If the bad old client agrees to pay the higher fees, in time they could become a high fee paying problem client – and one you may feel you really cannot afford to lose.
It’s much better in my view to be honest with yourself. Only give problem clients the option of paying higher fees if you’d be happy to keep them as a client if they are paying those new higher fees. In other words if the low fees were your main concern or if the hike is sufficiently high for you to be willing to keep pandering to the client.
If, however, you really don’t want to act for them any more, you need to make clear that paying higher fees is not an option.
Instead you need to write to explain why you can no longer act for them. You might allude to disagreements in the past, but it’s best to avoid accusing them of anything or inviting a response. Keep the purpose of your email/letter in mind and make the next steps clear.
I would be inclined to explain that the lockdown has forced you to review your client base and operations. You have decided to focus your practice on a particular type of clients. Sadly you are therefore explaining to certain other clients that they will need to find a new accountant or tax adviser.
If you don’t want the problem client to plead with you to stay then make clear that your decision is not up for discussion. End your letter/emil assertively and clearly.
You should spell out the last accounts and returns you have worked on and any ongoing work required. Offer to provide all reasonable help to your successor and maybe even spell out what they will need to do, and by when, so as to ensure the client remain compliant.
You might offer to recommend another local tax adviser who may be willing to take on the client. You don’t have to feel guilty for doing this. Some people are problem clients simply because of a personality mismatch or because they have established poor habits that a new accountant can change more easily than can the old accountant.
Or you may simply point your, soon to be, ex-client at an online resource where they can make their own choice of someone new to help them. One such facility, for clients more interested in tax advice than accounts as such, is my own Tax Advice Network – which provides access to tax advisers and local tax accountants across the UK.
Whatever route you go I do hope that you will soon be able to say that you no longer have ANY problem clients!