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Would you pursue a client for breach of contract?

Client has agreed to appoint me as his new accountant and has signed 64-8, letter of engagement which agrees fee and ran for a minimum of 12 months, and letter to his previous accountant appointing me which I included with my courtesy letter. One week later I had not heard from the previous accountant and sent a reminder. A few days later I phoned up the client who told me he would speak to him by phone. A couple of days later I received a very smug letter from the previous accountant who told me that the client had changed his mind and that they had actually started the work. Any advice?

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09th Mar 2012 11:31

Don't botter...

Even if there is a case, which there proabably isn't, it will be far far more hasstle than it is worth. This is the joy of being in business for yourself. Forget about it and move on.

 

Steve

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09th Mar 2012 11:46

I would let it go

I hate it when people don't have the courtesy to let you know they have changed their mind!

I would call the client to make sure the accountant was being truthful, and while on the phone I would ask why he had changed his mind. Also, if you have an advance payment I would withhold some to cover admin costs.

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09th Mar 2012 12:41

Apart from which............

.............I think you'd have to prove some sort of loss, actual rather than potential.

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Just unlucky

Pretty sure others will confirm this is rare, only ever happened once to me.  The main thing to take from the experience is that someone who can act like that and does not have the bottle or courtesy to front it up is not the sort of person you'd have wanted as a client anyway.

The other thing to learn is to get a set up fee agreed upfront.

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10th Mar 2012 08:14

Always inoculate

Rather than getting into negative state, think what can you learn.

If I were coaching you I'd suggest this is a sign of a poor sales meeting/process. If you uncover all the issues and explore them implications fully (especially where the previous accountant was weak) this should not happen.

However, you can do something (when they client says yes to you) that will give you a bit of insurance. I call it an inoculation and it goes like this:

OK, now when your old accountant gets our clearance letter they could try and put pressure on you to stay. You know, offering you a discount, apologising for not being proactive or telling you how long you have been a client. Can I ask, how will you deal with that?

The client will probably say something like:

I will say, thanks but I think a change is good for us.

Getting the client to do this (rehearsing) makes it much more likely they they will resist.

If you change the script keep the phrase "old accountant" because it puts them in the past and the word "try" because it presupposes failure.

Bob Harper

Crunchers Accounting Franchise  

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10th Mar 2012 09:07

it happens ... happened in 2010 for me.  i thought about sending a bill, since the guy had signed the EL.  but, decided against it & also just thought the guy was obviously not happy where he was so maybe he will change his mind.  

 

i did think the guy had genuinely changed his mind, and wasn't "trying it on", so i forgave and forgot ...

 

i consider myself a pretty good "salesmen" ... for me, the most important "skill" is to filter the prospects ... 5-10 min phone call to see if we want the client ... then email them some forms & ask for info ... if that comes back, arrange a meeting or a longer call ... send a Service Proposal (inc fee estimate) ... chase after a week ... issue EL, initial bill, ID request.  

 

in other words, we do very little work, other than some times spent on the meeting, before we see the colour of their money ... once that cheque arrives, i have a new client, and the new client has a new accountant ... till then, its just a prospective client.

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14th Mar 2012 08:30

Sorry but... get a grip!

Sorry but... please get a grip.

You have not lost anything, its very doubtful that you could enforce an engagement letter with those terms in law and even if you did succeed... you spend hours on the claim and then what? You either get a reluctant client who stays only 12 months or you win a few hundred pounds and he gives you some of the worst local feedback you could ever imagine.

As for the other accountant... wouldn't you try and rescue a departing client?

Don't waste your time, move on.

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