Disengagement Help!

Disengagement Help!

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Hi All,

I've recently purchased a small block of fees from a local retiring accountant and it's transpired that one of the clients should have been registered for VAT since August 2014.

I have discussed everything at length with the client and I have duly registered the company for VAT but even though relations started well, they are rapidly deteriorating with the client blaming me for the looming VAT bill.  She is adamant the date I've submitted is wrong, even though she provided me with the data, and has advised me she wants to deal with HMRC directly as she will get a better result.  (Her plan is to tell HMRC that she had no idea she had that the turnover was calculated on a cumulative basis, she's too busy too monitor her accounts and that she can't afford to pay so wants them to change the registration date!).  

I was already feeling like acting for her was getting too difficult as we were going around in circles but today she lost her temper and hung up on me.  I've emailed her to say that it would probably a good idea to get somebody else to act for her as she isn't happy with the advice I've given but she's now emailed back to say I shouldn't take it personally and she still wants me to act! 

So I guess my question is, from a professional duty and ethics point of view, can I stick to my guns and stick to the disengagement? I don't want to leave her in the lurch but her accounts and VAT are both going to be due next month and it's unlikely anybody else will take her on at this point...(i should also point out that the previous accountant didn't charge anything in lieu for an advert in her local directory...and no signed engagement letter in place).  

I've been running my own practice for less than a year now so I would appreciate any comments or advice from other members who have been in this position?

Thank you!

Lucy

Replies (24)

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By Tim Vane
26th Nov 2015 10:44

When somebody puts the phone down on me I usually take it personally too.

You have no obligation to continue working for her if you don't think the relationship is working. Send her a formal disengagement letter and refund any advance payments she may have made. Tell her you will help transition to a new accountant but that she should do it right away.

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By cheekychappy
26th Nov 2015 10:48

Yes of course you can disengage and you should!

Email her back saying that your decision is final and will no longer be acting as you feel that the business relationship is now too fractured. Tell her that it is in her best interests to appoint another accountant at the earliest opportunity. Attach a scanned copy of the disengagement letter to the email.

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By zestaba
26th Nov 2015 10:59

thank you

Thank you both! That makes me feel a bit better about things,  I was a bit worried about something coming back to bite me or whether there would be an issue with ACCA but I think I'll stick to my guns and issue a formal letter....

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By jon_griffey
26th Nov 2015 11:06

Don't cut off your nose

Part of being in practice is learning how to deal with difficult clients rather than running away. Sacking clients is quite extreme.

As you are new to practice you can probably ill afford to lose clients (and their potential referrals) so it might be good exercise for you in client management to see if the situation can be salvaged.

You have successfully called her bluff in threatening to sack her so you have the upper hand. I would lay it on the line - exactly what you are going to do, what you are going to charge, that she is to blame for her predicament, here is your letter of engagement - sign it or else, and you won't accept being spoken to like that.  If she accepts all that then you will have her respect and it should make the relationship easier.

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By v.knazevs
26th Nov 2015 11:07

Client will never be happy again
From personal experience: if the client believes that you`ve done a shobby job (and you have not), then it`s better for everyone to disengage straight away.

I never understood the clients who claim that you are not professional in your job, but then when you disengage they suddenly want you to act for them. Why would someone want "unprofessional" person to act for them?

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Replying to Wanderer:
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By happy
27th Nov 2015 12:37

Stick to your guns

v.knazevs wrote:
From personal experience: if the client believes that you`ve done a shobby job (and you have not), then it`s better for everyone to disengage straight away. I never understood the clients who claim that you are not professional in your job, but then when you disengage they suddenly want you to act for them. Why would someone want "unprofessional" person to act for them?

I feel exactly the same. 

I'd be fairly certain you'll regret any decision to keep her as a client.

In my experience this is the sort of client you just dont want - they will be demanding, you'll never please them and will make you feel miserable every time you do any work for her.

 

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the sea otter
By memyself-eye
26th Nov 2015 11:09

She was left in the lurch

In August 2014 - that was not your doing (or lack of 'doing')

Get rid.....

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By ireallyshouldknowthisbut
26th Nov 2015 11:21

.

I think jon raises an interesting point

Do you need the cash?

Presumably if you bought a block of fees you can claw your payment for her fee (presumably one years fee) back which might soften the loss.

But you can find that once hit hard with the ruler a client can come into line, but it varies. Some people are just not worth the grief, some clients can be turned round.  The trick is to ensure they think you are doing them a favour and not the other way around.

 

 

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By cheekychappy
26th Nov 2015 11:33

Personally I wouldn’t work for someone that can just fly off the handle and shows me absolutely no respect.

Even if the client came “back in line”, I wouldn’t feel the same towards them.

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By bernard michael
26th Nov 2015 11:59

When she gets a big vat/fine bill from HMRC her first economy will be not to pay your bill

Get rid ASAP or if you need the money get a large up front payment (your estimate of the fee cost+20% for extras) . Almost certainly she won't pay this so another reason for getting rid of her

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By ireallyshouldknowthisbut
26th Nov 2015 12:01

.

@zetaba, if you decide to keep this client, having a "deal" is a poor way to do business. I would re-negotiate so she pays for the accounts, and you pay for the advert.  

I appreciate you may be on flat rate VAT and so lose out slightly, but its a far better position to be in.

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By refs8
26th Nov 2015 12:10

Don't rush to make a decision

My experience is not to rush to make a decision on this. Make sure that all correspondence is 100% on the file, eg file notes, letters of advice.In the modern era, email and busy people can lead to frustration. May be a clear the air meeting is appropriate. 

You are there to save this lady tax but not break the law. Firm but fair sounds like a good phrase.

I suspect had she done this to me and I would have closed the file quicker than you will as you may need to build the reputation, only because after 25 + years you worry less about these issues.

There are some great clients out there you just need to find them.

Good luck enjoy the journey

 

 

 

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By Andp
26th Nov 2015 13:12

These slippery fish clients need to be handled with care. Extremely difficult but not impossible- you need to predict her next reaction if you remain engaged or disengage. 

ie if you disengage forthwith and she doesn't find a new accountant immediately and authority deadlines are missed -  will she try to blame you for the penalties ?  the time and stress spent defending that allegation maybe be more than actually doing the work and meeting the deadline.

Couple that with the time spent helping the new accountant with the transition( to meet the deadline urgently ) - I would personally quote the accounts prep/ tax work  , fees up front and meet the deadline(s)- highlighting the penalties you are saving her 

Its easy for me to say , but I try to disengage immediately after a deadline has been met - this then gives the client more than enough time to appoint a new agent.

She's dealing with the VAT reg herself so let her crack on with that one !

Good luck with this one and keep phonecalls to minimum . Emails all the way .You mentioned ACCA - phone their technical helpline for guidance 

Having agro clients this time of year is not good - I empathise..

 

 

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Replying to Andy556:
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By zestaba
26th Nov 2015 14:03

Thank you Andp, I completely take your comments on board and perhaps disengagement post December would be a better idea....I don't think this particular relationship is going to work but that would at least give her time to find a new advisor without any pressure...I'm certainly now leaning towards this as the solution!

 

 

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By Andp
26th Nov 2015 14:58

A pleasure - anytime. Do not disengage in January whatever you do . It is your business and you will quickly learn from experiences such as these , how to run a tight ship. 

We naturally take rules and deadlines seriously. Some clients sadly do not give a fig. These are the ones to weed out promptly. It will get easier , and after several years of self unemployment I can safely say a new disengagement stirs similar emotions to that of  a new engagement !

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By Gimlet2008
27th Nov 2015 11:11

Just a little cheer

 

I am not advocating this but I know a firm in the US where they sit round with the staff at the end of the tax season and  take a vote who is the worst client. ( This excludes any abuse which is an automatic sacking ) Any clear cut winner gets the sack.... Apparently very motivational ! 

 

 

 

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Replying to philrob:
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By zestaba
27th Nov 2015 11:51

Hi Gimlet2008, an IFA was recently telling me they took a similar approach! Although he also mentioned that although it was an annual process he frequently didn't feel any of his clients warranted getting the sack...I think the thought process for him was he was aiming to only work with clients he wanted to work with, rather than had to, which feels like a fairly luxurious position to a start up like me but maybe something I can aim for!

As an update to yesterday, after sleeping on things, I've gone for the middle ground as suggested and offered to help her through this 'bump' to give  her chance to get a new advisor next year.  I've also made my terms clear, so it's up to her now whether she wants to continue or not.....

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Replying to Wilson Philips:
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By bernard michael
27th Nov 2015 14:10

Watch out

zestaba wrote:

Hi Gimlet2008, an IFA was recently telling me they took a similar approach! Although he also mentioned that although it was an annual process he frequently didn't feel any of his clients warranted getting the sack...I think the thought process for him was he was aiming to only work with clients he wanted to work with, rather than had to, which feels like a fairly luxurious position to a start up like me but maybe something I can aim for!

As an update to yesterday, after sleeping on things, I've gone for the middle ground as suggested and offered to help her through this 'bump' to give  her chance to get a new advisor next year.  I've also made my terms clear, so it's up to her now whether she wants to continue or not.....

 

Make sure you get your fee up front or you will not get it

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Replying to philrob:
paddle steamer
By DJKL
27th Nov 2015 12:11

You're Fired

Gimlet2008 wrote:

 

I am not advocating this but I know a firm in the US where they sit round with the staff at the end of the tax season and  take a vote who is the worst client. ( This excludes any abuse which is an automatic sacking ) Any clear cut winner gets the sack.... Apparently very motivational ! 

 

 

 

And has the added benefit that nestling within the idea is a reality TV show, "The Client- You're Fired". Just have to work out, based on their postings, which poster on Accounting Web would be the most appropriate as the figurehead to do the firing and who would make the most appropriate sidekicks; must say that given would be looking for entertainment value and pithy rejoinders, certain names do spring to mind. Accounting practices could then nominate their " specially" selected clients to take part.

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By calculus.accountants
27th Nov 2015 14:44

Hi lucy

I've been in this situation myself in my early days and I can definately sympathise with you. It seems to me the only reason the client is being nice now is they realise if they go anywhere else at this short notice then it will either cost them or they won't find anyone. Saying that if you do want to act for them make sure you email all correspondence so you have evidence of any client being rude or abusive towards you - as at some point they may report you to your governing body.

I endured months of rudeness and swearing then got rid of my client one month before year end and they claimed I couldn't do that but you can and I did! Never looked back and they should think about that before they start the abuse! A contract works 2 ways and anyone not happy should go elsewhere.

Hope this helps

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By Rachael-SimplifiedAccounting
27th Nov 2015 16:04

Get rid ..

.. I had a client who told me that he expected me to be there whenever he needed help or advice and that it didn't matter whether it was my "silly" office hours or not .. he worked all hours and so should I!! I responded that I worked 9 - 3 and not outside of those hours and that it was probably time he found a different accountant as I wasn't prepared to be spoken to like in that manner or work to those demands! It felt soooo good.  I gather he's changed accountant several times since. Stand your ground and remember that client relations are two way .. we need to trust our clients.

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By Gimlet2008
28th Nov 2015 12:48

contract works both ways
Is sound advice as some people simply seem sadly to need to be told how to behave.

If I may be permitted a final general observation I believe where a decontamination has been made to ask client to move on not many posters are suggesting they regret this course of action !

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By Gimlet2008
28th Nov 2015 12:49

Where decision..sorry
Decontamination...well that has a ring to it as well !

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By v.knazevs
28th Nov 2015 18:08

We have always sticked to our guns and said bye/issued disengagement letter when the client crossed the line. Never regret loosing uncooperative/rude/over demanding etc. clients - at the end of the day accountant and client relationship should be based on mutual respect, trust and openness. It`s a two way street.

There are plenty good clients out there.

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