A journalist once surprised me with a question I wasn’t anticipating: “What is the worst mistake accountants can make when they are trying to ‘close’ a prospective client?”

When I later reflected on my instinctive reply I was satisfied it contained good advice.

Thinking about the issue subsequently I quickly constructed this list of 15 mistakes that are all too easy to make. Indeed I suspect that most accountants have made most of these at some stage in their career:

  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. Failing to ensure there is a reasonable match of both your and your new client’s expectations re key elements of your services (for example, as regards the extent of your unlimited email support across the year)
  8. Agreeing a fixed fee without adequately scoping and limiting the work it is intended to cover
  9. Starting work before completing the MLR identity verification process
  10. Offering to give advice at an initial meeting without satisfying MLR rules, and without ensuring that the client is prepared to pay for the advice you deliver. (You wouldn’t catch solicitors making this mistake!)
  11. 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
  12. Quoting a low fee to win the client and hoping you can raise it to a commercial rate in the future
  13. Not having the confidence to charge the fee you really want due to a fear this will be rejected and you won’t win the new client
  14. Failing to clarify whether the client expects you to personally give advice on technical challenges that go beyond your experience and knowledge. (It is normal to outsource such issues and to bring in experts as and when required).
  15. Failing to conduct due diligence that might reveal unsavoury information about the prospective new client or their business

Looking at that list, what do you think I identified, off the top of my head, as the most serious mistake that accountants make when talking to prospective new clients?

When I later created the list I realised that my instinctive response had encompassed a number of the above mistakes.

I said that the worst thing an accountant can do is to ‘wing it’.

What I meant by this was more about 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 sale 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.

Do some accountants ‘wing it’ in the hope that everything will work out in the end? “Once the new client is ‘on board’ we can adapt things so that we are happy and they are happy, even though not quite in the way expected at the outset.”

Downsides

I think there are four possible outcomes of winging it:

  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 not infallible. Often they will remember what they wanted to hear as distinct from what a new accountant actually said to them. This is one 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 because the accountant sources the necessary information and support in good time to provide the necessary advice. And when that happens there is no adverse consequence so all is fine.

Three concerns

I suppose I have three main concerns with the idea of winging it.

The first is for the reputation of our profession due to ex-clients spreading the word and complaining that accountants over-promise and under-deliver.

My second concern is for 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. They are often out of pocket and yet still needing the help that prompted them to approach you originally.

My third concern is for 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 I think. It’s a recurring theme among the accountants I mentor – even though they don’t all realise that this is what is holding them back.

I would prefer it if accountants had the confidence, experience and communication skills to be honest with clients from the outset.  I distinguish this from arrogance and from pretending to know more than you do.  But you do need to be able to inspire confidence when you confirm that you will be able to source the necessary information, support and/or answers. There is no shame in admitting that you are not superhuman.

Is winging it worth the risks and downsides?

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