Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Five ways to get rid of a client

by
27th Feb 2014
Save content
Have you found this content useful? Use the button above to save it to your profile.

You know you want to sack a client, but how can you do this? Mark Lee explores the main options available to you.

There are many reasons why you might want to get rid of a client. The most common of these are probably related to:

1. Fees - arguing about these or persistent late payment

2. Data - poor quality or regular delays in supplying all you need

3. Attitude - rude or otherwise unpleasant to deal with

In recent years more and more accountants seem to have decided to sack, what I have long referred to as, their ‘d-list’ clients. And, as Marcus Cauchi pointed out in an interview here last year, if you get rid of your most unprofitable clients you can actually increase the profitability of your practice. See: The most stupid things accountants do.

The theory is easy (as ever). Some accountants however seem to find the action side of things more daunting. For example, I recall one accountant who wanted to resign from dealing with a few clients “who are a right royal pain in the posterior”. She had thought of simply doubling the fees she charged in each case. But she feared the clients would call up to ask why and she didn’t think she had a good reason. In response to her plea for help many accountants shared useful suggestions and advice.

More recently another contributor asked for similar advice and I was struck by one response that suggested there is little advice online as to HOW to get rid of clients you don’t want. He’s right. There’s loads of guidance as to how to determine what is a bad client, but much less on how to get rid of the worst ones.

First things first

Let’s be clear, whatever the reason you want to stop working for a client you are at liberty to make that decision. Your accountancy practice is your business and you decide who can be a client and who should not be.

It is important of course to remain professional and to avoid disengaging in a way that might lead to a complaint to your professional body. Beyond that though no one is going to force you to act for a client if you don’t want to.

The key options

Which you choose will depend on the nature of your relationship with the client and the reasons you have determined why you wish to get rid of them.

1. Underperform

If you don’t like a client you may have given up trying to please them such that they perceive you to be underperforming. It might lead them to sack you and move to another accountant. But this is a dangerous and lazy solution as it is the one most likely to risk the ex-client reporting you to your professional body. They may also bad mouth you such that your reputation suffers locally.

2. Make them choose to sack you

Here you would take a positive and professional approach, but execute it in a way that you know the client does not like.

Perhaps you start to insist they send you all of their papers in a timescale they find impossible to meet. Perhaps you refuse to accept their assertions as to the business nature of expenses for which they have no receipts. Or you refuse to file their accounts and tax return until you have been paid in full (a wholly commercial approach in my view).

Again this option carries risks to your reputation if the ex-client goes on to talk about why they sacked you.

3. Invite them to leave

Your practice is evolving such that you are no longer able to act for this client. You are focusing only on clients that meet certain criteria.

As part of this approach you might recommend another accountant who is perhaps better suited to acting for the client. This may be especially appropriate if the client is based in another part of the country rather than local to you.

One anonymous contributor on Any Answers in 2012 suggested the following wording:

“Due to the growth of some of our larger clients we unfortunately need to reduce the number of clients we act for to ensure we continue to give best service to everyone.

Unfortunately this means we won’t be able to act for your [next SA] return, and so as to give you the longest possible notice of our decision I am writing to you today.

I trust you will understand it is not easy to select which clients to decline to act for, and we will of course co-operate fully with your new accountants which you ought to appoint soon to ensure they have plenty of time to file for you.  

In the interim period we will of course be please to assist with any queries or questions you may have as usual.”

4. Increase the fees you charge

Perhaps you might write to the client:

“Following a practice review we have concluded that some clients are paying far less for our services than is economically sensible for us. I am afraid that you are one of the clients most affected by our decision to revise our pricing levels.

Last year the total fees you paid us came to £1,000 (plus VAT). If we were to continue providing the same level of service we would need to increase this to £3,000 (plus VAT).

Given the scale of increase we appreciate that you will probably prefer to move to a cheaper accountant. If so we will provide every assistance to our successors. Alternatively please confirm that you are willing to increase your regular payments to meet our revised fee scale.”

Many accountants report that not all clients choose to leave after their fees are hiked up. At least then the accountant is being better rewarded for their trouble. If you are sure you want the client to go you probably need to reference an increase of somewhat more than 100%.  

5. Simply state the facts

Clearly this is the most admirable approach to adopt. It is important though to think through how you might do this as you need to be clear as to your objectives. Presumably you want the client to leave without them being justified in bad-mouthing you or reporting you for unprofessional behaviour.

It’s best to simply state the facts and to avoid making any accusations. Explain how the facts make you feel. No one can dispute how you feel. This is why you have concluded that you should cease to act for the client. Decide whether or not you want to leave the door open for them to promise to reform. If you don’t want to retain them as a client you need to be clear that your conclusion is not up for debate.

Timing

One common fear is that you cannot afford to lose the fees – even though the client is less than ideal. You need to decide whether your peace of mind is worth the fees you currently earn from this client.

If you still feel unable to ‘sack’ them just yet, put a plan in place. Draft your letter/email. Be clear as to what you will say and think about how good you will feel when this pain in the backside is no longer a client.

Then take steps to win over a new client who will replace the fees you will be losing. Don’t just sit there waiting for a new client to come through the door or to approach you online. Take an active approach to your marketing and networking, online and offiline.

Promise yourself that as soon as you have such a new client on board you will press the button and send the letter/email.

I think you will find that such an approach will motivate you to go out and win that new client a lot faster than perhaps you might otherwise have done. And then you can achieve your objective to get rid of that unwanted client.

Mark Lee is consultant practice editor of AccountingWEB. Beyond this he facilitates a group of accountants who want him in their inner circle, is a regular speaker on professional business development issues and chairman of the Tax Advice Network of independent tax specialists.

Replies (39)

Please login or register to join the discussion.

Chris M
By mr. mischief
27th Feb 2014 21:52

timing!

Unbelievable timing as I have just resigned from a client today who had taken to pretty much shouting at me and calling me incompetent down the phone.  This is the same client where HMRC put a PAYE/NI payment into suspense, then brought it out of suspense and posted it to corporation tax.  It is very difficult to have a conversation as I usually don't get the chance to finish a sentence.

At the end of the day this has been a mess, maybe I could have dealt with HMRC better but then again without me they would never have gone looking into the suspense account.  Either way the amount concerned is under £500, for me life is too short to get stressed over the small stuff.  We're just not compatible and I've tried a few different approaches.  I can get along with most people but you just need to accept that some folks don't gel with you.

"I have resigned as your accountant.  I feel our relationship has reached the stage where communication is often confrontational and I can’t find a way of breaking that cycle.

Thank you for appointing me as your accountant in the first place, and I wish you all success for the future."

His initial reaction overall is disappointment that I resigned before he could axe me!

Thanks (7)
By Howard Marks
28th Feb 2014 06:43

Sacked one only this week
Told him he's wasn't my cuppa anymore. I rarely mince my words so didn't see the need to prance around the subject.

Thanks (4)
Mark Lee headshot 2023
By Mark Lee
28th Feb 2014 11:55

Sorry @AlphaMale

Alpha Male wrote:

You forgot the one other solution. 

Thanks for your comment but that option (or 'solution') to retrain difficult clients is one you make before you decide NOT to sack them.

This isn't another piece about how to deal with problem clients. It's focused on the odd one you have decided you really don't want any more.

Mark

[edit] Ps: @AlphaMale seems to have deleted his post. Am leaving my reply in case it returns

 

Thanks (2)
By The 5-50 Coach
28th Feb 2014 09:01

The price one often seems to work well, but I also love Or's thought - train them to be a good client.

If you've put the price up to the point where you're happy for them to stay, as it's worth you dealing with them - is everybody happy - yes!

On a similar vein I know three practices who had an open discussion amongst their team about sacking clients and drew up a shortlist from there. Initially the teams were very cautious, but later they found it a good "team bonding" exercise leading into process improvements, less d list clients and a closer knit team.

Thanks (1)
By ShirleyM
28th Feb 2014 09:12

I agree with BookMarkLee

I imagine most accountants will try to get the clients cooperation first, and then sack those who can't or won't change.

With regard to increasing fees, it depends on the client. Some clients cause such irritation and frustration that no amount of fees can make up for the stress they cause.

This applies to my employee, as well as myself. My employee is an absolute necessity and I want her to enjoy her work. A PITA client isn't worth risking my health & happiness, or hers.

EDIT: I always give the client the real reason for our resignation.

Thanks (3)
ghm
By TaxTeddy
28th Feb 2014 09:38

Thinking ahead

Mark has touched on two very good points in his paragraph headed “Simply State The Facts".

The first of these is stating how you feel - whatever your feelings, they are absolutely valid and your client has no room for argument, so this is a very strong lever for removing the client.

Secondly, Mark touches on “leaving the door open". From experience, I know that it is a mistake to allow the client to get into a discussion and possibly persuade you to retain them. It is worth thinking through the client response before writing to them with your reasons for disengagement.

This doesn't mean that you have to be rude, simply decisive and firm.

Thanks (1)
avatar
By Martin B
28th Feb 2014 11:04

Five ways to get rid of a client

flagging

Thanks (0)
avatar
By neileg
28th Feb 2014 12:29

Just a hint of caution

Mark said: Your accountancy practice is your business and you decide who can be a client and who should not be.

Just bear in mind the Equality Act. I have known one professional (not an accountant, however) who had a sacked client accuse him of being racist. It all got sorted in the end but it was a lot hassle.

Thanks (1)
avatar
By malcolm141
28th Feb 2014 12:29

Money isn't everything

I'd avoid over pricing or under-serving. Instead, just explain that money isn't everything in the world of small business.

Go one and say that from your perspective you need to feel you are the right fit for them and you don't based on recent interactions and communications.

Wish them well for the future and provide them with handover papers to give to the new accountant.

Malcolm

London Accountants

 

Thanks (3)
By JCresswellTax
28th Feb 2014 14:29

Option 1

Isn't really an option though is it?

You are basically saying underperform.  What professional would ever choose to do that?

I think you should remove this as an option, its pointless and nonsensical.

Thanks (4)
Mark Lee headshot 2023
By Mark Lee
28th Feb 2014 15:47

Thanks @JCresswellTax

We agree that it's not a good option and I'm evidently not advocating it.  Yes, I could rewrite the article to make this even clearer but I don't see the need.

 

Thanks (0)
avatar
By thomas
04th Mar 2014 11:01

I've jut resigned from a PITA and wanted to avoid confrontation so explained I was refocusing my business on specific market sectors and it was with regret that I had to resign.

Done.  No room for movement. One less headache to deal with.

 

Thanks (3)
avatar
By Robert Hurn
04th Mar 2014 11:16

Avoiding Repetition

Going forward it is important that akin to a night club doorman, we are selective as to the new clients we accept.  Much easier to deny entry than have to evict later

Thanks (1)
avatar
By 68fw
04th Mar 2014 11:28

empowerment for inadequate accountants?

 

You poor deluded souls... just keep listening to Mr Lee - 'get rid' of your 'd grade' clients and I will look forward to welcoming them and turning a profit, to each his own I guess.

Thanks (1)
Replying to Ruddles:
Stepurhan
By stepurhan
04th Mar 2014 12:04

Win-Win

68fw wrote:
You poor deluded souls... just keep listening to Mr Lee - 'get rid' of your 'd grade' clients and I will look forward to welcoming them and turning a profit, to each his own I guess.
We are happy to get rid of clients that cause us stress. You are happy to get clients you want to deal with. A good situation all round then.
Thanks (4)
avatar
By guyletts
04th Mar 2014 12:22

Don't forget to say 'Thank you'

It definitely makes sense to guard local reputation and close the relationship in a professional way.

But the thing that seems to be missing from the examples of standard wording above is to thank the client for their business to date, and to apologise for the inconvenience it will cause them to change firm.

The goal must be to part amicably and avoid any negative impact on reputation. Whatever your reasons for doing it - it's how the client feels at the end of it that will determine what they say to other (potentially more profitable) prospects.

I know with some people you have to swallow hard first, but it's worth it.

Thanks (2)
Replying to Leannef321:
Mark Lee headshot 2023
By Mark Lee
05th Mar 2014 09:11

Great point @guyletts

guyletts wrote:

the thing that seems to be missing from the examples of standard wording above is to thank the client for their business to date, and to apologise for the inconvenience it will cause them to change firm.

The goal must be to part amicably and avoid any negative impact on reputation. Whatever your reasons for doing it - it's how the client feels at the end of it that will determine what they say to other (potentially more profitable) prospects.

A definite omission from my article.  I fully agree with you. Thanks for sharing.

Mark

Thanks (1)
avatar
By angusnicolson
04th Mar 2014 12:56

It can be hard to say 'goodbye'

Sacked a difficult and rude client a few years back for no-payment of fees and making outrageous demands.

He refused to accept we had resigned and kept sending payroll, VAT and accounts information until we sued him for the unpaid fees; when he realised we were serious.

No loss, and I doubt anyone could make a profit out of what he was prepared to pay for professional advice he never valued.

Thanks (1)
avatar
By 41115BARRI
04th Mar 2014 13:09

Send them to your biggest competitior

Get rid of them, as politely as you can to avoid a complaint, but make sure you recommend they go to your biggest competitor - that way they can tie them up in knots instead of you!

Thanks (4)
avatar
By 68fw
04th Mar 2014 13:13

NHT: now hear this...

 

Any accountant (on this thread or otherwise) wishing to divest themselves of a client they label  as a 'd grade' is invited to pm me (for further details) and refer such clients to my firm - I will pay commission on any successful new business take-up.

 

 

 

Thanks (1)
Replying to johnjenkins:
Mark Lee headshot 2023
By Mark Lee
05th Mar 2014 09:17

Horses for courses

68fw wrote:

Any accountant wishing to divest themselves of a client they label  as a 'd grade' is invited to pm me (for further details) and refer such clients to my firm - I will pay commission on any successful new business take-up.

Maybe I'm missing something but this really smacks of desperation. It suggests that @68fw will take on any clients anywhere regardless of their reputation - indeed knowing full well that another accountant can't wait to get rid of them.

I fully accept that someone who is a d-list client for one accountant may respond better to someone else but to actively seek out such ex-clients strikes me as odd to say the least. 

Mark

Thanks (0)
Replying to DJKL:
avatar
By 68fw
05th Mar 2014 14:23

Really?

[/quote]

 

"Maybe I'm missing something"

"smacks of desperation"

"will take on any clients anywhere regardless of their reputation"

"strikes me as odd to say the least"

....Perhaps you should have been a politician Mark?

 

It's a tired old ploy to attempt to 'smear' and 'discredit' an opposing argument with subjective value statements - (I think) it does you creditability no good at all.

Experienced accountants who practice with integrity (and refuse to label, objectify or lie to their clients to get rid of them... (er, at least before questioning their own abilities) will make the right judgement as to the arrogance of your opinions.

I'm waiting for those pm's... refer your duly labelled 'd grades clients' here  :-D

 

 

 

 

 

 

Thanks (1)
Replying to carnmores:
avatar
By neileg
05th Mar 2014 12:04

Eh?

68fw wrote:
It's a tired old ploy to attempt 'smear' and 'discredit' an opposing argument with subjective value statements - (I think) it does you creditability no good at all.

Experienced accountants who practice with integrity (and refuse to label, objectify or lie to their clients to get rid of them... (er, at least before questioning their own abilities) will make the right judgement on the arrogance of your opinions.

I'm waiting for those pm's... refer your duly labelled 'd grades clients' here  :-D

Where's the argument? If you want the clients that others don't want then good luck to you. If you have skills and techniques that make this a good business proposition you're on to a winner. It is true, however, that most accountants want clients who you can have a good working relationship with with a mutually professional attitude.

Thanks (1)
Replying to DJKL:
avatar
By 68fw
05th Mar 2014 14:41

Really

neileg wrote:

It is true, however, that most accountants want clients who you can have a good working relationship with with a mutually professional attitude.

 

But of course, the really shocking thing about this thread... is that there are so called accountants here, who are not talking about a "mutually professional attitude"

Instead they prefer to "label" their clients, "lie" to their clients, even "under-perform" for their clients and contrive to "get rid" of their clients... behaving like

politicians, "prostitutes in suits".

It seems neither Mark Lee, your self, nor any others find this attitude objectionable.

Shame on you.

 

Thanks (2)
Replying to carnmores:
Mark Lee headshot 2023
By Mark Lee
08th Aug 2014 08:46

Sorry - you misjudge me

68fw wrote:

It's a tired old ploy to attempt 'smear' and 'discredit' an opposing argument with subjective value statements - (I think) it does you creditability no good at all.

Not my intention at all. We disagree, that's fine. I have my opinion and you have yours.

Coincidentally I was just talking to another accountant who tells me he passes his d-list clients to a local chap who pays him a commission. This guys approach is very much cheap and cheerful, simple processing, no advice, pile it high and sell it cheap. If that model works for him (or you) that's fine. In my view it's not sustainable and my earlier observations stand as to the impression it gives to me when someone offers to take on such clients from wherever they are in the country. But I absolutely accept that my view is irrelevant if your approach suits you and works for you.

Mark

Thanks (1)
Replying to carnmores:
Stepurhan
By stepurhan
05th Mar 2014 13:21

Living in glass houses

68fw wrote:
It's a tired old ploy to attempt 'smear' and 'discredit' an opposing argument with subjective value statements - (I think) it does you creditability no good at all.
Says the person who called anyone listening to Mark's advice.

Quote:
You poor deluded souls...
under the heading "empowerment for inadequate accountants?".

You are perfectly entitled to base your business model on taking on clients other accountants find a nightmare to deal with. Others are equally entitled to think that anyone believing belligerent, late clients who don't pay will become a pleasure to deal with just by their influence is likely in for a rude awakening in the very near future.

 

Thanks (2)
avatar
By Sime Williams
04th Mar 2014 14:57

PITA

Would someone tell me what a PITA is?

 

Thanks (0)
Replying to lionofludesch:
avatar
By forgeron
04th Mar 2014 15:29

PITA

= Pain in the [***].

It's true that people often use initials on this site that not everyone is familiar with.

Thanks (0)
Replying to newstarter01:
By slipknot08
11th Mar 2014 15:39

s'not, you know...

"pain in the [***]..." forgeron

 

I think you'll find that the last word in that phrase has an 'r' in it - leave the poor donkeys alone - we're not American yet, thank all the gods :-)

Thanks (1)
Stepurhan
By stepurhan
04th Mar 2014 15:23

PITA

Pain in the A.........ctually I can't remember what the A stands for (or I don't want to type it on this otherwise polite website.. ;-) )

Thanks (2)
By penelope pitstop
04th Mar 2014 23:29

What's a PITA

Thought it was some type of middle eastern flatbread.

Yes, what's a PITA?

On a serious note, I used to be very clear in telling departing clients etc. what I thought of them. Then one day a friend told me always to part company with someone on a happy note, never upsetting them, no matter how obnoxious they are.

So now, when I get rid, I always do it in the friendliest way possible. For example, "Sorry cannot act for you because we no longer have the skills/staffing to deal with the complexity and peculiarities etc. of your accounts."

That way we all remain friends with no worries of a brick through the window etc. (It's amazing how nowadays people want to seek revenge when they feel they've been wronged).

That way the ex-client goes his merry way scratching his head wondering what that was all about.

 

 

 

 

 

Thanks (4)
avatar
By raybackler
04th Mar 2014 23:00

About to press the button

I found this thread useful to read.  I have a client I have been trying to pluck up the courage to get rid of right now.  I defy any other accountant to change the ways of those who are truly recalcitrant despite offers to the contrary on here.  It is not about the money - it is about a complete lack of respect where we have tried our hardest.  VAT return was due 31st January, still not filed, and no communication despite repeated reminders.  Not the first time.  Always slow to respond and always one of the last to approve annual accounts.  Vague with answers when clarification requested.  When approval given, often right on the deadline.  I feel like the messenger who gets shot rather than a professional adviser!  Others may have broader shoulders, but is it worth it?

Thanks (1)
avatar
By mpollins
05th Mar 2014 06:44

How to get rid of a client

Good stuff Mark.  The worst client of all is one who doesn't pay on time, grumbles about everything, never recommends anyone to the firm, always moans about the fee level, and who is generally unpleasant to deal with. Asking the client why he/she is like that might produce interesting information for the accountant. The other thing I wanted to mention is that when you sack a client, a disengagement letter is required. It's also required if the client makes the first move and sacks the accountant. 

Martin Pollins - Bizezia Limited

Thanks (2)
Replying to lionofludesch:
Mark Lee headshot 2023
By Mark Lee
05th Mar 2014 09:32

Disengagement letters

mpollins wrote:

when you sack a client, a disengagement letter is required. It's also required if the client makes the first move and sacks the accountant. 

Martin Pollins - Bizezia Limited

Thanks Martin. Another very good point. Appreciated.

I agree  disengagement letters are 'required' as in they provide protection for the out going accountant in the event of subsequent disagreements as to what he/she was doing and what work may have been left for the client or the successor accountant to undertake.

Mark

Thanks (0)
avatar
By Robert Hurn
05th Mar 2014 15:24

Oh Dear

Temper, Temper 68fw

Thanks (0)
avatar
By 68fw
05th Mar 2014 15:54

Number Six oh dear...

Now that made me smile!

Number six has regained his composure, enjoyable thread.

 

Thanks (0)
avatar
By carlreader
20th Mar 2014 14:04

It's very simple...

...man up and tell them.

I don't buy into this "professionalism" crap, which I have heard before from others before, that we can't disengage clients... To me, upping fees / giving deliberately poor service / allowing your staff to be abused - and all the other things that come from these sorts of clients - is far more unprofessional than telling them that you're no longer a match.

 

 

Thanks (1)
avatar
By Jason Dormer
28th Mar 2014 15:13

Amen to that

What he said.

Thanks (0)
avatar
By ChrissyE
12th Aug 2014 13:24

Thoughts anyone?

 

I had a client who disagreed with the way I presented his accounts and their contents - he was such a whizz he probably should have done them himself.  Argued over the fee and paid late too!

So I sent him the letter here is a copy of your return, am no longer acting for you.  Three weeks later he wants to know why. 

He is on my "when I can be bothered" pile now.  However, I live in a small town and gossip travels fast.  Anyone got any pearls of wisdom? I would love to rip into him but he sapped my energy weeks ago.

 

Thanks :)

Thanks (0)