Severing ties with your clients is one of the most challenging aspects of operating a firm. Yet, it is a very necessary task. It’s tempting to continue working with a disgruntled or difficult client, hoping the relationship improves, not to mention the concern about your bottom line. But the situation places you in a vulnerable position, which you should avoid at all costs.
Unfruitful relationships lead to problems, making it more difficult to service your other clients. It also puts your reputation at risk and, depending on the situation, could lead to a potential malpractice claim. You must contemplate these matters from the viewpoint of a business owner and practitioner.
Here are five tactics to consider.
#1: Identify a deteriorating relationship
One of the best ways to know if it’s time to call it quits is to recognize telltale signs early on. Here are some examples of what to look for when assessing a client’s conduct. The client:
- Won’t follow your advice.
- Cancels meetings.
- Exhibits abusive or aggressive behavior.
- Monopolizes too much time.
- Doesn’t provide documentation.
- Complains about billing and your work product.
- Wants projects finished on tight deadlines.
- Is unmanageable.
While a single instance may not rise to a terminable offense, repeated infractions or a combination of many issues could become the basis for placement on a shortlist.
#2: Value your team’s opinion
Clients come and go, but employees are harder to find. Make it a priority to conduct semi-annual reviews with team members who have daily client interactions. You’ll also experience lower turnover when you welcome your staff as a stakeholder. They’re in the best position to provide insight or divulge details on matters occurring in the background.
For an objective evaluation, use a ranking or point system to grade clients, rather than a subjective or off-hand review. For example, the criteria might include the following items:
- Payment history
- Transactional value
Not everything boils down to dollars. Yet, ending toxic relationships can clear the way for more profitable and positive engagements from clients who need or want your help—a concern of every business owner.
#3: Use a clear and consistent message
It’s easy to become emotional or angry, which is why you’ll want a disengagement letter ready to go. Tactful actions will save you time and money, and so will preparation. This is not the time to cut corners.
If you’re not a talented writer, that’s okay—especially when you’re delivering bad news. Nearly all disengagements involve awkward, stressful, or uncomfortable elements. You can contact your insurance carrier to get an approved template, and then make adjustments. The insurer may also require you to notify them when potential legal issues affect your policy.
These are some key elements to consider when composing a letter:
- Reason for termination (contract violation, non-compliance, unresponsive, non-payment, and other reasons).
- Effective date.
- Instructions for accessing or downloading files.
- Removing accountant’s access from online accounts.
- Willingness to speak with the new accountant.
- Reminder of upcoming deadlines.
Try to ensure the client has the information to transition successfully. Make it as painless as possible for both of you. Always remain neutral and professional, but firm. Here’s a sample letter for your review and use.
#4: Learn from the past
Use your experiences to create a checklist for accepting new clients. Your intake form must include questions that help identify prospective clients who are a good fit for your firm.
- Why are you switching accountants?
- How many accountants worked on your file in the past five years?
- How comfortable are you with technology?
- Do you have past-due tax returns?
- How fast do you want us to respond?
- If we find issues, are you willing to follow the steps to become compliant?
These answers also help you price the client for future billings and outline the engagement’s scope.
#5: Get back on track
Not every client is perfect, so you should not expect a client base with no faults. Yet, there is a distinction between uninformed and willful clients. Do not accept behavior that leads to a hostile or disruptive work environment. Your client roster likely has more than one person, so it’s critical to weigh the needs of all clients, your staff, and yourself.
Quitting a client lets you refocus your energy and attention on a more productive operation, supported by a happy team. You’ll also have healthier and more rewarding relationships with those who care.