When a Client Balks at Necessary Work

Ed Mendlowitz CPA The Practice Doctor Q and AMaybe it's time to part ways.

By Ed Mendlowitz

QUESTION: I know that one of my clients needs some extra work done, but they don’t want to pay for it. It is important that this work gets done.

Do you think I should do it anyway? What is my responsibility?

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ANSWER: I don’t think you have a responsibility to do the work if the client doesn’t want to pay for it, no matter how necessary.

On some level, it is the client’s money and we cannot spend it for them. Lots of time we feel a greater responsibility for the successful completion or followthrough of a project than the client and we tend to overstep the boundary of fee limitations, preferring to let the success of the job speak for itself, and negotiate after we did the work.

That is just not good business. If we feel strongly that we are right, we should be able to get the point across to the client – and if we cannot get the point across, then maybe we are not so right.

Also, if the client doesn’t give the okay, and you feel the lack of getting this work done could cause the client a serious problem, then you need to consider whether you should continue working with that client. We are professionals and enjoy high levels of trust from our clients. Continuing a relationship where we know there will be a serious problem at a later date betrays that trust, and I believe that we owe it to the client and ourselves to rethink the engagement.

I can tell you that when a serious problem develops, one of the things the client will say to you is, “I trusted you to protect me. How could you let this happen?” How will you respond?

3 Responses to “When a Client Balks at Necessary Work”

  1. Mike,EA

    This was very useful. I find 5% of my clients taking up 25% of my time. Most of this additional 20% is uncovered through billing. It is the same clients year after year.

    Reply
  2. J Hughes

    I’d suggest one additional thing to the advice already given. Write a letter to the client detailing the work you think needs to be done, why it is beneficial and what may happen if it isn’t done. Mail the letter certified with a return receipt so you have proof that you notified (or tried to notify) the client of the work and consequences.

    Reply
  3. Jonathan S Gorman

    I want to add to Ed’s point – which I think is right-on.

    When my client needs additional services, it typically falls into two camps:
    – Services that are required, but were not quoted because we didn’t have the information to make the assessment at the time.
    – Services that are beneficial, but were not quoted because we couldn’t make the proper cost/benefit assessment at the time.

    I believe that we have a fiduciary obligation to give our clients the information they need to make good decisions. We also have an ethical obligation to ensure that our work is compliant to whatever Federal / State / AICPA standards that we are (or should be) aware of.

    I don’t mind challenging my clients with data – and tell them to ‘indulge’ me with the opportunity to explain why it is in their best interest for me to add specific services that weren’t in the original quote (and why those services weren’t in the original quote to begin with). If the client understands the facts I lay out, but disagrees with my position – I respect that decision as long as I do not believe that I am violating any ethical or legal requirements to do so.

    However, in the event that MY RISK becomes measurable – I set aside some time to myself to determine worst case scenarios for firing the clients against worst case scenarios for retaining the client and possible risk associated.

    When I decide to fire a client, I explain why and if the client is willing to mitigate my perceived risks by following my direction – I’ll likely maintain the engagement with a memory of the situation. But, since I don’t take firing clients lightly, I do make the decision before I speak with the client and am prepared to do as I intend.

    Not all CPAs are decent and honorable – but I believe we have the highest concentration of decent and honorable practitioners when compared with other fields. Give yourself the same quality advice that you give your clients. I wouldn’t recommend my clients take unnecessary risks for their customers without understanding the cost – I do my best to give myself the same counsel.

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