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Firing a client - advanced notice

How much notice do you give a client that you are dropping them?

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Hi 

I was just wondering how much notice any of you give a client when dropping them. I am looking to terminate a number of engagements over next few months. All have year ends of 31 March so I would like March 2021 to be the last month I represent them. My engagement letter is a standard one month notice but I was wondering if there was anything to be weary of giving them more notice than that i.e telling them now and gving them three to four months to engage a new accountant for 1 April. 

 

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RLI
By lionofludesch
26th Nov 2020 15:07

Anything to be weary of ?

Sounds like you're weary of the clients.

Are you intending to prepare and finalise the 2021 statutory accounts ?

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By exceljockey
26th Nov 2020 18:10

lionofludesch wrote:

Anything to be weary of ?

Sounds like you're weary of the clients.

Are you intending to prepare and finalise the 2021 statutory accounts ?

Yes I am. They're paying monthly in advance so they have pretty much paid for them already.

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Replying to lionofludesch:
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By exceljockey
26th Nov 2020 18:11

.

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Replying to lionofludesch:
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By exceljockey
26th Nov 2020 18:10

lionofludesch wrote:

Anything to be weary of ?

Sounds like you're weary of the clients.

Are you intending to prepare and finalise the 2021 statutory accounts ?


Yes I am. They're paying monthly in advance so they have pretty much paid for them already.
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By Matrix
26th Nov 2020 19:11

But what does your engagement letter say about amounts received in advance?

If you resign before 31 March and they engage a new accountant to prepare their accounts then do you have to repay all the monthly fees collected?

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Replying to Matrix:
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By exceljockey
26th Nov 2020 19:31

Yes that's why I am waiting until 31 March. Although I don't have to repay all the monthly fee as the engagement is broken down by payroll, bookkeeping, VAT etc. So it would only be the portion I have accrued for the AFS and CT600.

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By ospevack
26th Nov 2020 15:18

Unsure whether your clients would give much notice if the shoe were on the other foot.

The professional in me says as much notice as possible - the credit controller in me says sure up the debt and WIP ledger before any other action.

I would be prepared with an answer to the outgoing clients who ask why, and expect to receive appointment new accountants inside of the first couple of weeks after notice - I don't think I would do a final set of accounts and expect to get paid...

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Red Leader
By Red Leader
26th Nov 2020 15:21

I'm assuming that you have completed y/e 31.3.20. In that case, I would give notice now. I can't see any reason for waiting. Sooner got rid, the better.

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By Sarah Z
26th Nov 2020 15:32

Red Leader wrote:

I'm assuming that you have completed y/e 31.3.20. In that case, I would give notice now. I can't see any reason for waiting. Sooner got rid, the better.

I agree with this - just tell them

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By Matrix
26th Nov 2020 15:36

Are they on monthly fees? What does it say in your engagement letter/terms if so?

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By exceljockey
26th Nov 2020 18:14

Matrix wrote:

Are they on monthly fees? What does it say in your engagement letter/terms if so?


Yes. Engagement letter is one months notice. They are not bad clients but just not great. One is my only cash client, one is my only CIS client, one I just don't like etc etc
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By JD
26th Nov 2020 15:41

Why drop them. Unless they are pita's and if it is a number of clients, consider selling them/provide them with a preferred choice of new accountant.

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By exceljockey
26th Nov 2020 18:20

JD wrote:

Why drop them. Unless they are pita's and if it is a number of clients, consider selling them/provide them with a preferred choice of new accountant.

Not really worth selling to be honest. They are not bad clients but they are outside of my standard clients profile and they are the kind of client that just seems to interrupt your flow!

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By Duggimon
26th Nov 2020 16:07

If the decision is made then finish the last bit of paid work you intend to do for them, get paid for it, then tell them it's over. I wouldn't get hung up on notice periods, provided you're not leaving them in the lurch with a deadline fast approaching.

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Jennifer Adams
By Jennifer Adams
26th Nov 2020 16:10

Personally the best day of the year for me is 1 Feb when all returns are in and I sit down with a mug of coffee and a large iced bun and make a list of those clients who have been a right a pain in the whatsit and I'm going to get rid of.

I make sure there are no outstanding matters and then email them - immediately.
As Red letter says the grief is just too much to take them any further.

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By Calculatorboy
26th Nov 2020 16:47

Client cleansing with a heavenly sugar hit

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By JD
26th Nov 2020 18:24

Also one of my favorite Feb joys. As my farming clients would put it, (insert accent of choice) a good lambing season starts with a good cull.

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By Calculatorboy
26th Nov 2020 16:44

If all work done billed and paid i cease straight away and formally disengage immediately within the letter .

I try to do my annual cleansing in spring or early in tax year , but see no reason doing it now if 2020 completed .

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By ireallyshouldknowthisbut
26th Nov 2020 18:13

My notice varies.
Can by the same phone call if they ask me to do something I wont.

usually its the day I file their accounts, ie when the cash in the bank and nothing o/s. I would not resign until I was "done", ie its really painful to have ti hanging over you for a long period, so I avoid that.

A 4-6 weeks before the next deadline I think is perfectly reasonable. Eg if you run PAYE, tell them this week/next week that December will be your last PAYE run, then they can do one. Chances are they will get the new accountants to do it anyhow.

The key is to be clear what you will and wont be doing.

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By Justin Bryant
27th Nov 2020 09:09

If you're regulated you can't just walk away from a client willy-nilly e.g. I believe the ICAEW has a disengagement ethics checklist.

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By exceljockey
27th Nov 2020 10:58

Yes I am regulated and thats why I want to ensure that I complete the year so there is no argument about what work has / has not been done. They pay monthly so they have paid an element of AFS / CT600 work in advance.
All recs etc done at month end so there is very little additional work at year end.

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By I'msorryIhaven'taclue
28th Nov 2020 14:11

You might just get a problem with that if your invoices (or perhaps your original quote) doesn't break the monthly fee down into its various components of bookkeeping / wages / annual accounts & tax return.

Essentially you are asking to be paid for so much as you have done, which may not include the accounts if the clients appoint somebody new; and that's fine if you broke down the quote / invoice to itemise your separate services. You'll have performed some of the services, and are able to refund any other services you do not perform. If however you've quoted (or are invoicing) a block monthly amount which covers everything then by failing to perform your complete side of the contract you could well be liable to refund the entire fee for each (relevant) month.

It would be quite different if your clients were to break the contract, as it would be they who would then be in breach.

Is there anything overriding in your engagement letters (or T&Cs) to cover this situation (to the effect that you are entitled to be paid for the part of the contract - say payroll and bookkeeping - that you have performed)?

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By Moonbeam
27th Nov 2020 18:42

I fired a newish client immediately when he told me my advice that his previous accountant had ignored a potential tax liability was wrong. He didn't feel it necessary to explain further. Obviously it didn't suit him.
But I refunded him the small amount of money he'd paid that I hadn't used up.
There is no way I can continue acting for someone who won't take my advice.

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By I'msorryIhaven'taclue
28th Nov 2020 13:45

Dear PITA Client,

As part of our routine quality control procedures we periodically check and monitor the output and quantity of our work, together with the amounts of time and effort expended, in order to tailor our services to our clients' changing needs.

Following a recent such review we write, in accordance with our terms and conditions, to give notice to you of a forthcoming increase to your firm's current monthly fee of £200+VAT to a revised rate more reflective of the levels of work involved of £350 + VAT monthly, effective from 1st April 2021.

Whilst we realise that is not the news you may want to hear during these difficult times, do be assured that we have given the matter our careful consideration; and that such realignment of fees to the work performed is essential if we are to maintain our current involvement and standards of output for your firm.

Yours gleefully,
F. Hoffman

Sit back and watch many of them leave of their own accord!

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