By CPA Trendlines Research
Sometimes a client just isn’t worth the effort. Both CPA and client might be better off if they part ways.
But the parting shouldn’t hurt. Bad feelings don’t help anyone. Here are some tips for politely culling clients for various reasons.
1. Set Clear Boundaries: Politely, gently inform the client that their demands, payment delays or other issues fall outside the scope of your firm’s services, expertise and policies.
Example: “Our firm is aligning with clients whose needs are a closer match to our expertise and policies. Unfortunately, we’re unable to continue our engagement.”
2. Adjust Fees to Reflect Effort: Raise fees to reflect the additional time and resources the client requires.
Example: “Due to the increasing complexity of your work, our updated fee structure will ensure we meet your needs effectively.”
3. Blame Limited Capacity: Explain that your firm is focusing on a select number of clients to maintain service quality.
Example: “We’ve made adjustments to our client portfolio to better serve our existing clients, and regrettably, we need to conclude our engagement. You’ve been a great client, but …”
4. Blame Professional Standards: When client requests go beyond your ethical standards, indicate that certain actions or requirements on their part conflict with industry standards or regulations.
Example: “In adherence to professional standards, and with a concern for possible legal issues, we must conclude our services where ongoing compliance cannot be maintained.”
5. Point to a Strategic Shift: Indicate a shift in your firm’s focus toward a different industry, client size or service type.
Example: “We are focusing on a new client segment that aligns with our updated strategy. While it has been a pleasure working with you, we must end our current arrangement.”
6. Recommend Another Professional: You can smooth out the bad news by suggesting another accountant who may better suit the client’s needs. You can add this suggestion to any of the approaches listed here.
Example: “Given the evolving nature of your business, I believe (Colleague’s Name) would be an excellent fit for your needs.”
7. Frame It as a Business Decision: Position the decision as a necessary step for optimizing your business model. Point out that it is policy, not something personal, that led to the decision.
Example: “In reviewing our internal resources, we must prioritize areas that align with our core capabilities.”
8. Cite Communication Issues: If applicable, gently address communication barriers as a reason for parting ways.
Example: “We’ve noticed some challenges in aligning our communication, and we feel you may be better served by a firm that’s more in sync with your preferences.”
9. Highlight Missed Responsibilities: Use the client’s missed deadlines or failure to provide necessary documentation as a reason to disengage.
Example: “To ensure quality service, we rely on timely collaboration, which has been challenging to achieve. For this reason, we’d like to recommend that you contact (a certain other firm) who can cater to your needs.”
10. Use Contractual Language: Refer to terms in your engagement letter or contract that allow for termination under certain conditions. This tactic can sound a little cold, even nasty, so if appropriate, add some words of regret and best wishes.
Example: “Per the terms of our agreement, either party may terminate services with notice. Please consider this our official notice. We will be glad to tie up any loose ends that remain and to help you transition to another accounting firm.”
Bonus Tips
Here are a few principles of professionalism that can apply to any of the approaches in this list.
- Always give adequate notice, allowing the client time to transition.
- Provide a clear and credible explanation without being overly critical.
- Don’t get into an argument over whether the decision is fair or justified. If the client starts arguing, cut it short by apologizing and saying that the decision has already been made.
- Express gratitude for the opportunity to have worked together. Mention a few positive experiences in your relationship.
- Offer to assist with the transition where appropriate.
- Here’s a good pattern for any communication of bad news: First, say something nice or positive. Then give the bad news. Then go back to something positive, something that gives the recipient a reason to feel good.
Ending a client relationship is never easy, but these approaches can help maintain professionalism, protect your reputation and avoid bad feelings.
Consolidated: Sorren, member firms, Kuramoto, and Prager
