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Main categories of clients

How do you (or would you) categorise your clients?

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I'm preparing material for a new talk and want to ensure that the way I talk about typical clients resonates with as many accountants in the audience as possible.

One thought I've had is to use the following broad groupings:

  • Complex clients - those that require advice to resolve issues on a regular basis
  • Ambitious clients - those that recognise they benefit from your business advice
  • Typical OMBs - the majority of  'Owner Managed Business' clients
  • Sole traders, consultants, contractors - those swapping their time for money and whose growth is therefore limited by the hours available.

Should I expand this list to allow for other client types? Could I reference these groups in better ways?

NB: This is quite a distinct approach as compared with ABCD client types I have referenecd before:

  • A = Best clients (however you define them)
  • B = Those with the potential to become A clients
  • C = Those who are no trouble but are unlikely to become A clients
  • D = Those you'd rather not act for.

Replies (19)

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By Maslins
15th Jan 2018 17:39

For us we simply have:
- clients, and
- former clients.
All our clients follow a similar "mould", and if they grow too much we recommend they move on.

With those who are clients, we assist with everything. Have been burnt in the past with clients who do their own X & Y, and just require our assistance with Z. Inevitably when we come to do Z we uncover issues with X/Y which then need unpicking.

Only clients we have who don't fit the mould are legacy clients from the early days where they've been keen to stay and we've kept them on for both nostalgia and as bit of variety for staff.

Thanks (1)
Replying to Maslins:
Hallerud at Easter
By DJKL
15th Jan 2018 18:22

I like the idea of nostalgia clients, could also embrace
collecting some vintage or antique ones.

To be honest I would love some decent size manufacturing clients, ideally with a bit of tech and a lot of plant to look at and watch, something that converts say sheets of metal into whatever.

These days (being Edinburgh) I see none of that type of work whereas as an apprentice in Glasgow I was far more exposed to interesting accounting records, challenges re stock costing etc though I doubt even Glasgow has that much left now as it all seems to be business parks these days.

Edit- above has also now brought on a hankering for a good old fashioned car dealership with sales, trade ins, servicing, fuel and with commissions earned on nearly everything.

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Portia profile image
By Portia Nina Levin
15th Jan 2018 18:21

Irritants, non-irritants.

Thanks (2)
By Red Leader
15th Jan 2018 18:35

My clients are all a variation on compliance. Compliance is a high element with each client. I generally don't have rapidly growing clients.

Thanks (1)
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By jimmyxyz
15th Jan 2018 19:27

Where would we be without a bit of categorisation?!

Looking at the OP’s list, there could be overlap; e.g an ambitious client who is a ‘Typical OMB.’

Following on from that, I think a distinction has to be made between different clients in terms of their attitudes and efficiency, and so on, in dealing with accounting issues arising, and their businesses in terms of complexities.

As a rough guide (and I have just picked the following categories out of the air), clients might be competent, passable, or incompetent. Businesses might be straightforward, complicated or highly complex.

It is then a case of matching client and business: e.g. competent client and complicated business; incompetent client and straightforward business; or, night-mare scenario, incompetent client and highly complex business.

Thanks (1)
Replying to jimmyxyz:
Hallerud at Easter
By DJKL
15th Jan 2018 20:22

Or exciting, interesting, boring re what they do.

So category one has lion tamers, category two has engineers with oily bits and category three has accountants.

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Replying to DJKL:
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By Maslins
16th Jan 2018 10:53

DJKL wrote:

Or exciting, interesting, boring re what they do.

What this demonstrates to me is generally people set up in accountancy for one of two reasons:
1) they love accountancy work. DJKL likely fits this. You want to be challenged, to come across different things you haven't seen before. You probably won't like delegating much, unless it's really dull/mundane stuff.
2) they want to build a business, and perhaps with limited creativity they opt to do it in accounting as that's their skill set. Generally these people will want to delegate as much as possible, systemise things, and specifically _not_ want variety, as that means complications.

Thanks (1)
Replying to Maslins:
Hallerud at Easter
By DJKL
17th Jan 2018 21:28

Nope, I fought the law (parental choice) and for a change the law didn't win.

Accountancy was my fall back career, I was initially doing a BSc in Mechanical and Electrical Engineering,
for various reasons (well never ending simultaneous equations and I could not get my head around Kirchoff's laws and Thevenin's theorems for a start) I changed course and institution and ended up with an MA in humanities; this was not, of course,that popular with prospective employers in 1983 , "we are really not interested in your being able to compare the Miller's and Reeves tales with other fabliaux tales of the period/earlier" so career progression was limited.

So given parental disapproval (touch of deja vu here as my daughter is now > 6 months out of St Andrews and devoting herself to self scanning in Asda) at my chosen career of pouring (and drinking) a lot of beer I returned to uni for the joys of a PG conversion course into a relevant ( for ICAS) accountancy qualification (the essence of a degree but done in a year), something respectable but not law.

Accordingly I am hardly an accounting zealot , more one who arrived here by chance rather than by planning.

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Replying to DJKL:
Portia profile image
By Portia Nina Levin
16th Jan 2018 11:04

Self-employed lion tamers? Seriously?

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Replying to Portia Nina Levin:
Hallerud at Easter
By DJKL
16th Jan 2018 15:54

It is often a very short career .

Thanks (1)
Replying to DJKL:
Mark Lee 2017
By Mark Lee
17th Jan 2018 09:38

DJKL wrote:

It is often a very short career .

LOL ;-)

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By Vaughan Blake1
16th Jan 2018 15:40

I use my universal traffic light rating system. This works for clients, pubs, hotels, towns, bands, pies etc etc.

Red = never again - you don't want this client
Amber = don't care either way whether they stay or go
Green = happy to continue acting

Ultimately it is a binary question, do you want the client or not?

I am not sure of the point of the broad grouping by type that you suggest. How would you use this info?

Thanks (1)
Replying to Vaughan Blake1:
Man of Kent
By Kent accountant
16th Jan 2018 15:23

Mmmm, pies...

Thanks (1)
By Glenn Martin
16th Jan 2018 16:14

Priced Right - Good client who pays going rate and appreciates what you do, recommends you to others etc.

Priced Tight - Wants the basic service but squeezes you on price but pays on time.

Priced [***] - Wants champagne service for beer money, never refers, pays badly, thinks tax returns can only be done in January and expects 6 months credit.

Thanks (4)
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By jimmyxyz
16th Jan 2018 18:55

24 hours on, I'm struggling to get rid of the image nicely provided by DJKL of "engineers with oily bits"!

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Mark Lee 2017
By Mark Lee
25th Jan 2018 10:26

Thanks for your comments - perhaps I wasn't as clear as I might have been in explaining what I had in mind when formulating the list of categories.

I appreciate the challenge of thinking about client categories in January and note that this doesn't always prompt positive thoughts ;-)

I have now thought further about the topic and have written a blog post which addresses the issue in more detail. In it I suggest that some accountants' current client base may not survive into the future.

http://bookmarklee.co.uk/categorising-accountancy-firms-clients-future/

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Replying to bookmarklee:
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By I'msorryIhaven'taclue
25th Jan 2018 15:35

I'm confused. Does the new classification 1 to 4 replace the old classification A to D?

Or are they to be used in conjunction eg A1, A2 etc all the way down to D4s? If the latter, will that require a pivot table?

Thanks (1)
Replying to I'msorryIhaven'taclue:
Hallerud at Easter
By DJKL
25th Jan 2018 15:43

Its obviously based on the new mini leagues for European football friendlies, my other half was trying to explain how it worked last night but I think I fell asleep.

https://www.theguardian.com/football/2018/jan/23/uefa-nations-league-dra...

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Replying to DJKL:
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By I'msorryIhaven'taclue
25th Jan 2018 19:05

Mark Lee is your other half?

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