Are Bad Clients Driving You Crazy?

Or worse: Undermining profits and impeding growth and progress?

If your partners are putting up a fight to keep clients should be let go, take a look at our compensation system. It’s not just about billable hours.

In this month’s Journal of Accountancy, AICPA exec Mark Koziel urges firms to consider “encouraging other compensation measures in your firm.”

Koziel quotes August Aquila and Coral Rice, authors of “Compensation as a Strategic Asset: The New Paradigm,” in advising practitioners to consider 16 criteria for compensation. “While the list is not exhaustive,” Koziel says, “it does provide the breadth of criteria that firms can consider beyond revenue.”

  1. Book of businesses
  2. Client or book gross profitability
  3. Community involvement
  4. Cross-selling
  5. Fees collected
  6. Firm management responsibilities
  7. Industry experience/expertise
  8. Managed charge hours
  9. Mentoring and training employees
  10. New business development (origination)
  11. Ownership percentage
  12. Professional involvement
  13. Realization
  14. Seniority
  15. Technical expertise
  16. Utilization

Cleaning up your client book does more than just allow you to focus on A-list clients, make more money and get more sleep at night. It also helps you retain your best, most difficult-to-replace staffers, according to Koziel, who, as a former recruiter, has heard plenty of war stories.

More here.

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Posted at January 11, 2009
Filed Under BSG [CPA TRENDLINES] | 2 Comments

Comments

2 Responses to “Are Bad Clients Driving You Crazy?”

  1. Chad Bordeaux on January 12th, 2009 10:58 pm

    Fire the bottom 10% of your client base tomorrow!

  2. Kirk Ward on January 20th, 2009 5:04 pm

    Okay, I’ve been retired for over ten years now, but aren’t the changes in Circular 230 going to make it riskier to keep less than desirable clients?

    I mean, in addition to their potential for profitability?

    Kirk

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