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Practice Tips - 3 types of client you don't want

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15th Jul 2005
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"I’m not sure how many new client meetings I have done over the years. It might run into thousands by now. That experience has taught me there are three types of client I never want. They are:
1.    the client who says all they want to do is make lots of money;
2.    the client who does not want to pay tax;
3.    the client who wants to make lots of money and does not want to pay tax.

Let me explain. First of all, there’s nothing wrong with making money. I am inclined to do so myself. But there is a problem with those who see this as their goal. The simple fact is that if someone has made making money their priority they have forgotten two things. The first is that it’s often the case that the easiest way to do this is to act illegally, in which case you definitely don’t want the client. 

The second is that if you’re trying to make money legally you really need to have a burning passion to do something well, innovatively and for a sustained period. Just by saying your goal is to make money suggests a lack of passion for business itself, and also suggests spending money will very quickly become more important than keeping up the daily slog. When that happens the only way to keep the cash flowing is to abuse your suppliers, and it’s at that point I’ve always reminded myself I could be one of them, and taken the option of saying “no, thanks”. After all, it’s hardly an attractive option.

The reason for not wanting as clients those who do not want to pay tax is that almost invariably those with a passion for this are more inclined than average to bend rules in their favour. They’re the ones who will slip though the home improvements in costs of sale, or worse. They create three undesirable problems:
1.    you have to do more checking on their records;
2.    they’ll always be unhappy with you as it’s fairly hard not to pay some tax;
3.    there is high risk of a Revenue enquiry as they’re also the sort of people who upset others and talk about it “down the pub”.

All of which are good enough reasons for not wanting them on the client list.

The third scenario, which combines these traits, is a nightmare. You will work like a Trojan, be called at every unreasonable hour you can imagine, be expected to come to meetings at their premises at a moment’s notice and will never be paid the true costs of the work, if at all.

So there’s nothing prejudicial about avoid these three groups of people. It’s just I’m in practice to make money with as little risk as possible. None of these contribute to that objective. So I have never wanted to work with them. And I’ve always wondered why anyone does.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs. A collection of previous articles by Richard on practice management themes is available in Practice Management Zone

 

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