What to Do with the Client from Hell

CPAs share their war stories and their winning strategies.

by Rick Telberg/At Large

Almost every accountant has a story of a client who is more than just a little difficult, which we reported a couple weeks ago in “Have You Fired a Client Lately?” As if to prove the point, the reader response has
been overwhelming.

In the article I reported on a CPA Trendlines survey that showed 93 percent of public accountants have at least “a few” clients they would like to fire. Furthermore, nine in 10 accountants have terminated a client and many have done so at least once in the last year.

But the tough part is actually finding the strength and the right technique to sever such dysfunctional relationships. Some readers wanted more practical solutions. Fortunately, other readers wrote in with some great ideas. If you have an idea, suggestion or just want to share a war story, please drop me a line here.

I heard from a solo practicing CPA in California, who asked to remain unnamed. He can’t say enough about how good it feels to get rid of that problem client. “Do it – it’s not worth all the worry and abuse to your health.”

Another accountant, who doesn’t want his name used, told me, “You will be less stressed, have more free time to devote to your other clients and your employees and colleagues will thank you for it.”

The California soloist recalls “a foul-mouthed individual who could do no wrong. He was constantly hiring and firing his personnel and then talked trash about them after they were gone. He spoke similarly of his customers. I terminated this client after he informed me that he was going to record fictitious transactions into his accounting records for the purpose of obtaining a bank loan. By the way, it was my largest client and the loss in revenue is killing me – but at least I have some peace and can sleep at night. I have others that I would like to terminate but thankfully they are not telling me of their plans to commit fraud.”

And then there’s Frank Monetti in Toms River, N.J., who recommends: “Review and grade clients at least annually, and fire clients that are not worth the hassle. It will save you time, money and aggravation in the
long run.”

His client from hell: “I inherited a client who bought a medical spa from a previous client. At the first meeting, I was ‘jokingly’ asked how to avoid reporting sales tax. The records were never complete, and they would not provide a copy of the LLC operating agreement. During my final conversation with one owner, I decided to fire the client because I found (after some questioning) that another owner had been incarcerated.”

Evelyn Edwards, a CPA in Buda, Texas, suggests: “Set your boundaries and stick to them.”

Edwards’ client from hell: “He questioned what I did on his return. When he didn’t like the outcome, he insisted I do more work on it. I took numbers from a prior year and prepared the return. He was still upset, he changed the numbers again. That’s when I fired him.”

Phil Golding is retired in Weathersfield, Vt., but his best advice is “careful screening to begin with.” Call the predecessor accountant and “get the full story first,” he says. Every firm and every practitioner needs a careful screening process.

Oh, and by the way, in classifying the various breeds of problem client, Golding adds one to the list – “The Liar.”

I covered four kinds of problematic client:

– The bargainer: Wants to negotiate price on everything. And then they question every detail on the invoice.

– The needy: Constantly makes new demands, and then drowns you in e-mail, phone calls and office visits. And it doesn’t stop on evenings or weekends.

– The whiner: This client is a chronic complainer and may even get aggressive or abusive.

– The unreliable: This client is always late to meetings, cancels meetings at the last minute or even fails to show up.

But Golding’s “Liar” is the kind you “can’t depend on for any information being accurate. He has not even paid the former accountant his final fees or, in other words, stiffed them.”

There’s a mid-level staffer at a small public accounting firm who didn’t want me to use his (or her) name.

But besides, “The Liar,” this reader says I neglected to mention three more breeds of problem client. “You forgot a few,” this reader says, itemizing:

– The aloof: Slow responding to requests for information. Needs constant nagging. Often doesn’t return phone calls.

– The bad risk: You just have a feeling that something is going to blow up. An IRS audit. A fraud. A lawsuit.

– The abusive: Speaks for itself.

For sure, problem clients seem to come in all breeds.

Gina D’Orazio in Littleton, N.H., remembers her client from hell vividly. “They were a married couple who were managing innkeepers at a local inn. They micromanaged me when I was at the inn. They would tell me they could do my bookkeeping job better than me and then make countless errors that I would need to fix. They would want me to teach them basic bookkeeping and then tell me in the same breath, ‘Tell me how to do this but don’t tell me any accounting concepts.’ They would lose quarterly tax-return documents that would turn up 30-plus days after the filing date.”

“Regardless of how much we can use the revenue from any and all clients it sometimes is not worth the headache,” says D’Orazio.

“If you know you have done your best,” D’Orazio said, “and the client really is from hell then the best advice I can give is to provide 30-days notice for them to find alternative assistance and get the timeframe of completion of work in writing. Have everything in writing so there is no future ‘he-said/she-said’.”

One anonymous sole practitioner may have the best advice of all: “The best way to avoid firing a client is to never hire them. You avoid these clients by removing all mutual mystification at the outset. Explain to them in no uncertain terms what is expected. If they have a problem, don’t work with them.”

WHAT’S YOUR BEST TIP ON HOW TO FIRE A CLIENT? E-mail your comments, ideas, rants, raves or useful suggestions to Rick Telberg here. We’ll read them all and share the best.

Copyright © 2008 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.

Posted on December 8, 2008