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SURVEY RESULTS: How to Fire a Client

Response to our article, “Four Reasons to Fire a Client Today: Turn problems in profits,” has been brisk.

Practically every accountant has at least one client they wish they didn’t. And about two-thirds of accountants are doing something about it — by firing a client within the last year. Every practitioner may have a different threshold for pain, but few don’t have at least one “client from Hell” story. And just as many have some advice for colleagues.

Here are the initial results from our survey, How to Fire a Client. Join the survey; get the updates.

(Survey launched Feb. 25, 2008. Results as of March 3, 2008)

 

Can you describe your own CLIENT FROM HELL?

(Sample verbatim)

• always changes his mind. always calls late night and early in the morning for some minor issues. complaining about the fees too high while feels free to call anytime he wants
• Client called me Christmas day as I was sitting down to dinner with my family. He called to calculate his year end bonus. My wife was not too happy.
• Client refused to provide bank statement to support bank reconciliations stating that the internally generated e-banking statement should suffice. I refused to accept the reconciliation. Client discontinued the relationship.
• close, but more like a neighbor to the lord of the dark
• demanding and saying that other accountants deduct whatever they are told
• My worst used to call up all the time for advice and first ask “you’re not going to charge me for this, are you”
• generally those are the one’s that don’t pay timely and don’t follow our advice
• I could write a book on this (OK a chapter or two). Lesson learned, fire them before they cause you too much grief. I personally never choose to wear a bristle jacket that says “welcome” on it.
• I had one who would call me at home and on weekends and then complain to the engagement partner if I did not return a call until Monday. Luckily, we don’t do work for them anymore. I have another client who consistently cancels meetings we schedule. No matter how much try, I have a very difficult time demonstrating to this person the value of our services. They routinely question fees.
• i was fortunate, they were my only client in their particular industry so i told them that they needed a specialist for their industry and that it wasn’t me. i would have to bill them significantly to achieve the level of expertise that i felt they deserved to be served with. obviously, would not work for a common type of business.
• No, just unorganized and unmotivated clients.
• No. But they were from a warm place nearby.
• Of Course! In the 20 years I’ve been in practice I’ve probably had half a dozen of them.
• Of course, but once this became apparent we fired them quickly.
• Oh yeah–How about the one you work through an audit and file a ton of back taxes only to be stiffed for the bill?
• Oh you bet ! He would come in to pick up his tax returns & each year he would bitch & complain.
• Several, tax laws and GAAP didn’t apply to them, slow paying, demanding, disruptive, rude, thought I became a CPA yesterday. One client in particular was committing fraud.
• Sure, but I prescribe to the edict that I don’t have any clients I don’t like so I remove the bad ones.
• Yeah, I actually have 2.
• Yeah. They complain, don’t cooperate, and they never send you any business.
• Yes, a client that keeps sending you revised financial statements at year end, revision after revision on tax return.
• Yes, and I no longer have them as a client, thanks be to God and my fire them and enjoy less stress policy!
• Yes, but we try to stop these clients from becoming a problem. One of the advantages of growing “older” is that we know problem clients are not worth the trouble.
• yes, demanding and then never paid their bills
• Yes, fits the profile in the article to a tee.
• Yes, for a short period of time.
• Yes, I once had a client that was a very mean old lady. She used to yell at her accountants for every little mistake and any misunderstanding. Picture a little old 82 year old lady that speaks like a sailor.
• Yes, in almost 40 years practicing, I have had my share and probably more than my share.
• Yes, it was a nightmare. Definitely not worth the fees even if they were 10 times the amount I eventually ended up collection.
• yes, Just fired. $50,000 in fees is not enough for the stress. Replaced in 2 days. There are good clients out there. Go ask.
• Yes, one of my first. He was “handsie” with his bookkeeping staff in front of me, discussed his extra marital affairs around me and bragged about sleeping with his son’s girlfriend. He wouldn’t give me signed copies of documents and I had a hard time getting him to sign engagement letters. He always paid on time. He was a client for less than 6 months. My client from hell had residuals. After getting rid of him, his records were subpoenaed and I was visited twice by IRS agents and attorneys from the Antitrust Division of the US Department of Justice.
• Yes, one that did not pay a large invoice. I told him to go away and not come back.
• Yes, the changes were endless, and they couldn’t understand why their bill was so high.
• yes, they were very demanding during tax season, they griped about my fees. they were inexperienced business owners. expected me to do everything
• Yes, turned her into my top paying customer representing 20% of my business.
• Yes. A Condo Association. We had a meeting, going over the Financial Statements. I made a comment, that, We are looking into a “tax break” rule, and that We feel that the Condo qualifies, etc. I also said, “But, this is just Probability, not for-sure, yet. We are looking into it, and we feel hopeful.” In their next newsletter, they quoted me as saying, “She said, we will get all of the $10,000 in taxes paid, Refunded.”
• yes. i fired him, too. another one only bothered me every three years when he had to file. he is now deceased.
• Yes. My CLIENT FROM HELL was not a particularly large client nor was he a client for very long (for obvious reasons), but I will never forget him! About 12 years ago, I had an individual client who became very upset during a telephone call because he didn’t like our conclusion related to some tax research. He lost his temper and started yelling at me, using extremely offensive profanity, insulting me and our firm. He had been warned previously about using unacceptable language with our staff and I had inadvertently overheard him yelling at his wife using the same offensive language! I was more polite than he deserved, and told him that our professional arrangement did not require us to tolerate disrespectful or offensive language, and that no amount of fees would justify subjecting our staff to such abuse. We returned his records with a letter advising him that we could no longer assist him. He paid his bill in full (to my surprise) and we never heard from him again. I have had a number of challenging clients over the years but none of them ever came close to THE CLIENT FROM HELL!
• Yes. She kept calling and calling and calling. Needed to have meetings about everything. Wanted handholding 24/7. And, had a history of filing suit, on previous attorneys and accountants.
• Yes. Someone once told me there are some people you shouldn’t do business with even if they pay you cash in advance.
• Yes. The client is a non filer. His wife insisted that he filed. I help but he is still trying all means to get away from paying taxes.
• Yes. The narcissistic micro-managing “I can do your job better, faster, smarter than you can” type A on steroids client was tough. Demanded constant and immediate attention by phone, email and frequent unscheduled visits.
• Yes. We disengaged within a week.
• Yes. A very demanding client who doesn’t not pay.
• Yes. Fortunately, we’ve learned to recognize them early and get rid of them quickly, or just decline to take the engagement.
• Yes. Various over the years, where they felt our firm owed them out time without billing for it.
• Yup, I raised his rates to twice what everyone else was paying and that didn’t get rid of him . I finally had to make and meeting and tell him to his face that my staff and I were done.

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WHAT’S YOUR ADVICE to other accountants about firing clients?

(Sample comments)

• Evaluate the clients and do what’s right for the firm
• Act quickly and make sure payments are up to date
• Always allow the client to leave with dignity. A referral is optional but good business.
• Always rank your clients! We use A-Excellent, B-Good & C-occasional pain. We don’t accept clients that worry only about price, don’t value what we have to offer or constantly question everything we do or inappropriately challenge what we clearly know. We’re clear about integrity, which is what we’re about. Some C & D clients don’t seem to understand this. If we need to explain it, we move on. Pain clients get in the way of growing your practice to gain more A & B clients, the ones that actually & truly appreciate your efforts. We never take on or accept D clients & are always working to train C clients. Some can become B’s over time. While there may be missed “billings” in the near term, we ‘re in this for the long haul. Focusing on the top tier clients, strengthens relationships.
• Approach it professionally stating the business reasons why you can no longer provide services. Then move on and find better clients.
• As the column says, do not focus on the revenues, but rather the reduced stress. It may be difficult to quantify, but it is most likely more than the revenue.
• Be as honest as possible and explain the type of client that is your focus and why.
• Be direct, remember that some folks just don’t get subtle messages.
• Be more aggressive and detailed with billing practices. Be prepared to discuss the fees and the benefits to which the services result. If all else fails, advise the client that the chemistry just isn’t there.
• Be polite, Be firm, Be professional.
• be professional about it.
• Be professional. Consider raising the price until you are happy with the fee and can put up with the aggravation. Fire a client when the aggravation exceeds profitability.
• Be very open with them about expectations. Help them a new accountant.
• bill them out the door
• Deep down, we always know when we should end a professional relationship. Procrastination is inflicting additional pain on yourself.
• Develop a wider client base. never rely on one client for more than 5% of your revenue. Never give out your home number. Turn off your business mobile when you have your private time. Raise your rates.
• Diplomacy; explain to the client that you cannot “effectively give him/her the service they disserve”.
• Do it at the first sign of problems; your “gut instinct” is usually right.
• Do it before they fire you and cost your firm reputation and money.
• Do it before you get burned. Listen to episode no. 45 at http://BusinessCast.ca/archives for our take on firing a client.
• do it early in the process
• Do it every year. Have all personnel grade all customers they deal with every year. Set an acceptable grade and fire every customer that falls below the acceptable grade. You may even be able to sell them to a competitor (you win twice).
• Do it proactively and offer to help finding a new Accountant.
• Do it professionally and be very clear as to why you can no longer continue the relationship.
• DO IT PROFESSIONALLY, POLITELY AND WITHOUT EXPRESSING ANY RANCOR. BE MATTER OF FACT.
• Do it promptly. It’s not healthy to live or work with problems.
• Do it soon so you stop the bleeding. The time and emotional costs of dealing with these clients makes getting it done soon imperative.
• Do it sooner rather than later
• DO IT SOONER RATHER THAN LATER!
• Do it sooner rather than later. “C” clients rarely (if ever) become “A” clients
• Do it sooner than later
• do it sooner, the aggravation you save is worth it
• Do it, you will feel better afterwards and your staff will appreciate and respect you more.
• do it.
• Do it…. you’ll be much better for it.
• DO NOT HESITATE. You know when it is time to end the relationship, do it.
• do quickly and do not hesitate
• Do so quickly and cleanly. There is NO reason to drag it out or hold onto them. In my opinion, even doubling your rates IS NOT WORTH IT.
• Don’t abandon them unless it there is an integrity issue. Provide them with a list of alternative providers. Firing problem clients can be a huge boost to profitability and team morale.
• Don’t be worried about it. We have had the good ones come back a year or two later and realize how much they valued our relationship. The ones you never hear from again are the ones you didn’t want back anyway.
• Don’t send them to me.
• DON’T TAKE THEM IN THE FIRST PLACE
• Don’t wait…if you think it is time….IT IS!
• early and often. Let the other firms deal with the pains and complaits.
• Fire as soon as you are uncomfortable with them. Turst your professional skeptism.
• fire them asap
• Fire them ASAP
• Firing a client begins before you take them on. Know what kind of client your willing to work with and know when to say no.
• For clients who are very demanding and unwilling to pay for the time they demand, I tell them that I feel sure they will be more satisfied with an accountant whose philosphy regarding service and fees better matches the client’s expectations. I tell them that we are unable to provide what they need for a price that meets with their expectations, and I want them to find a professional relationship that will be rewarding for both parties. I try to keep the discussion positive, and emphasize that we’re just not a good match for their needs and expectations. I offer to transfer their records to their new accountant and send a follow-up letter thanking them for their business and wishing them the best going forward. The last thing I want is to have that ex-client bad-mouthing me and our firm to everyone they know. I have also raised fees by as much as 100% over the prior year, and told the client that we would require a prepayment to do their work, since they were historically late in paying us. This has usually given them incentive to go elsewhere.
• Go ahead. If the client cannot be pleased while you maintain your integrity, it’s only a matter of time before you part ways anyway.
• Have a good engagement letter, that gives you an out.
• Have a nicely-written letter, run by your lawyer, firmly stating the fact. To keep it from getting personal, blame it on the obscure business-planning that led you to fire them.
• Haven’t really done it enough to advise
• head it up front. get clear on the ideal client but also get clear on the bad client. a most recent bad client owed $450 when he thought he was getting $5000 back. It was tough on him, but i knew we did everthing we could. People that owe are tough clients. very few of my clients owe. I try to get an idea of whether they will get a refund or not up front. that really helps. people that are late in filing returns are bad clients.
• I double their rates every year until they leave. That usually works. If I tell them not to come back, I worry about a lawsuit.
• I find it best to end the relationship as soon as possible. You will be happier with less headaches and more time to devote to porfitable clients. In short–GET RID OF THEM!
• I FIRED ONE CLIENT WHO CALLED ME 12 TIMES AND LEFT ONLY 2 MESSAGES . WHEN SHE DENIED THE NUMBER OF CALLS I TOLD HER SHE DIDN’T FIT THE PROFILE OF THE CLIENT I WANT FOR MY PRATICE. ANOTHER CLIENT I INCREASED MY FEE TO WHAT IS PROPER FOR THE WORK AND COMPLAINED WHEN THE FIGURES DIDN’T LOOK RIGHT. OOPS THEY “FIRED ME”
• I give the client the benefit of a doubt the first year. After that, fire them sooner rather than later, they won’t get better. You’ll feel so much better & the staff will love you for it.
• I got the best advice from another CPA. “Get rid of bad clients as quickly as you can. If you keep them, they will only refer their friends and you don’t want a book of clients just like them.” After firing a few, ask yourself what they had in common. Then, learn not to take them in the first place. I’m still learning.
• I have found alternative providers.
• If a client complains about the invoice on a tax return, I have a simple solution. Rather than negotiate the fee downward, I politely hand them back their data, take the tax returns, tear them up in front of the client, and say “Never mind, you don’t owe me anything. Have a nice day and good luck to you.” In every single case except one, I’ve been asked to please, please reprint the returns–there’s nothing about the fee to complain about after all. And the best way to get rid of a client with a personality conflict is to gradually increase the fee until I am getting paid enough to feel there isn’t a personality conflict after all… or until the client leaves on their own.
• if in doubt, you probably should. you’ll sleep better, and it will free you up to serve clients who you’ll enjoy working with, and will actually pay you without complaining.
• If it’s a larger client, discuss your reasoning with your attorney (it’s worth the fee), otherwise raising your rates does help the client decide to go elsewhere.
• If you can do it in a way that does not seem so personal, such as a letter saying you are re-evaluating your practice and what clients are the best fit, that can help. CAMICO has a good sample letter.
• if you feel like you should fire them, do it! Do it in writing and if it will make it easier to do, return their fees.
• If you think they are not worth the hassle, do it!
• If your stomach churns when they call, get rid of them
• It is a great idea, but difficult to do.
• It is easier said than done.
• It is hard but makes sense from the standpoint of: time, stress, & profits. You could replace these clients with other clients that consumed less time & end up making more money. The only thing I worry about sometimes relates to small communities where you could fire a client who might make it their mission to spread negative items (probably from their view point only) about you & your firm around the community.
• It is usually never a bad business move to fire your worst client - or two.
• It should be an ongoing process of focusing on the good clients that are going in the same direction and weeding out the bad clients that take you down roads you don’t want to go. Life is too short!
• It’s liberating. A weight is lifted off your shoulders.
• It’s more important to building a successful practice than obtaining a new client.
• It’s such a relief not having to deal with problem clients.
• Its the most valued thing I have ever done for my employees.
• Just be polite and professional about it. Tell the truth. Obviously don’t tell a jerk he’s a jerk, but if you have a client that obviously doesn’t respect the value of your time, then tell them that all you have to sell is your time and knowledge and that you deserve to be reasonably compensated for it.
• Just do it!
• Just do it.
• keep raising fees until they leave or they make up for the problems
• Let them go as gracefully as possible. I usually tell them, “I think that both of us would be better served if you found another firm to do your work in the future.
• Looking at a client list one can always pick at least a few clients that should be fired, but I know it’s not an easy thing to do. I think we all need to run our practices like a true business rather than making our firms be part of other people’s plans.
• Make sure your partners are in agreement
• Make them notice that is their fault that you don’t want to work with them.
• Mean people suck. Life is too short to deal with them, and they rise to the top of my list of clients to fire, or better yet, never engage in the first place.
• My barometer for firing a client is this: When our receptionist tells me that “so & so” is on the phone for me and the first thing I do is cringe or sigh in frustration, then I know its time to fire that client. They are not necessarily bad people, they are just on a different train than I. Firing is difficult, however there is such a sense of relief once you have done it.
• My favorite story is a former partner. She had a very demanding client that rarely wanted to pay the full load on the bill. He called and wanted a reduction on the bill and she said: please pay what you think is fair. The next time he called demanding her immediate intention, she said: Well, Mike, you aren’t my client any more. When he sputtered and asked why, she said: when you decided not to pay me for my time, you in essence are asking me to spend my free time with you. I prefer to spend my free time with my husbands and children.
• Never be afraid. You are a professional doing good work for your clients and the community. Treat every client as if all your clients were the same way. Would you survive? Would your professional life be worth the trouble?
• Once the process is done you will provide better service to all your other clients.
• Once you decide to do it, get it over with. Don’t delay and don’t look back with any regrets. The time you have wasted with bad clients may have cost you the opportunity to pick up better ones.
• Once you recognize you have a problem client, try discussing your concerns with them. If you do not get the desired changes in their behavior, cut the cord quickly. All the time you spend on this type of client distracts from your truly wonderful clients and costs way too much in lost time and energy.
• probably price them out is the most professional solution
• put it in writing and keep it professional. If client committed fraud or something else bad don’t mention reason for firing just state that you resign from account effective such and such date
• raise rates
• RAISE YOUR RATES ON THE PROBLEM CLIENT. BE SURE AND CHARGE THEM FOR ALL THE “FREE ADVICE” THEY WANT. MOST PROBLEM CLIENTS WILL GO ELSEWHERE. IF NOT, THEN AT LEAST YOU ARE BEING PAID FOR THE TIME YOU PUT INTO THEM.
• Raising their rates will get rid of many. They may not pay the last bill, but……….
• Rate all your clients from A to D. Then get rid of all the Ds, and try to bring the C’s up to B level.
• Relief pressure and make capacity available for other more profitable client
• Review client lists at least yearly and make sure clients are part of your long-term goals. Fire them if their practices, either with you or others, create risk for you. I don’t give then the option of higher rates once I decide to fire them, and I try to give them enough time to find another CPA for their reporting requirements. To help stay firm, I tell them that the whole process is part of a risk management program and that both their needs and the needs of the practice are taken into account.
• review them at least annually, send them a letter with your concerns and the reasons you are dismissing them. Some will change and beg you to let them stay
• Sometimes the client from hell is the CFO or Controller. Develop a relationship with upper management, such as President or Owner so that you can discuss major CFO/Controller issues with them before you make the decision to let them go.
• Stand your ground that what you are doing is being done in a professional manner even if they threaten to file a complaint with your governing body. Give them the information on where to send the complaint
• Stay calm, be polite, address only the facts. Not fair to fire a client unless they know the reasons, and determining the exact cause requires the professional to examine the realities and arrive at a logical conclusion which should be shared with the client. It’s okay to say, “I recognize your need to monitor the progress of the project. My firm requires scheduled time to properly address the needs of each client, and although we attempt to provide regular updates, we are not able to provide the type of service that you require. Your business is important to us and we want you to be happy. Accordingly, we encourage you to find a team that can better serve your needs.”
• Talk to the client about the problem. Tell them your rate has to increase substantially in order to continue to provide them with the service they desire.
• The advice about measuring your sanity and lack of excess stomach acid - rather than lost revenue is right on. Some clients just cost too much. You are not right for everyone. Recognize that and move on. It is the right thing for you to do for your firm and for your soon to be former client.
• The article is right, I felt better knowing I didn’t have to deal with them anymore, I can replace the money with some effort and paying attention to the needs of the current clientele
• The best tactic is to increase fees to an optimal hourly rate. That works both ways, either the client will go somewhere else, or you will generate a pretty good fee to compensate for the ranting and complaining. For example, I have many high demanding clients that pay more than $550 an hour. Anything below that rate, is not worth the hassle.
• The best way to fire a client is to hike the rate. Tell them they need a lot of time and effort, therefore, the rate/charge must be higher; and insist in it. They will be gone in no time. Do not ever take them back, there are usually high risk clients.
• The conversation is the hardest part, but life goes on for the client and I’ve usually found they are amiable about it. So all the stress leading up to it is wasted energy.
• They will not get better next year
• Time consumption of dealing with a difficult client is costly and your time can be much better spent on a client that is willing to listen to your advice, use it or not, and make his decisions being well informed.
• To set up a meeting and explain the problems / challenges. If there are no changes the folow up with a letter.
• Try and screen them as not to ever take them on as a client. Call them into the office and explain that we are not able to service their needs.
• We all should just do it.
• We are sending our D clients to our competitors.
• We do not fire as many as we should.
• What’s the big deal? Just do it. I don’t need to practice and/or stand in front of a mirror when I get a bad client. I just need to say that I will not be performing your audit (or compilation, review or tax return) any more.
• When do clients really become “problem clients”? Example; Client has messy records, basically honest, and NO communications from regulators. Client has workable records, risk of material misstatement is very high, management is nonexistent, potential lawsuit, regulator communications are consistent.
• you and your license are as important as the client’s
• You dont realize the relief it gives you until you do it.
• you fill the lost time with better service on remaining, 80/20

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