Written by Hugh Duffy
Article reprinted from Main Street Practitioner, September/October National Society of Accountants
No matter the size
of the firm, there are going to be some tough decisions to make along
the way - and one of the most difficult is firing a client. We no longer
live in a environment in which the only repercussions might be the
initial awkward conversation when the firing occurs. Today, we have
positive and negative social media. In our always-on world where a
negative blog or Twitter posting can go viral in a matter of moments,
accounting professionals will want to ensure they do not suffer
potential negative consequences.
Why Fire a Client?
There
are many reasons to sever the accounting/client relationship. Take a
look at these reasons and think about whether this has happened in your
practice.
1. The client takes up too much time. This is the
number one reason we fire clients. Heard of the 80/20 rule in which you
spend 80 percent of your time on the bottom 20 percent of your client
base? These are the clients who are not adding to your bottom line, so
your return on investment is very slim. It's better to get rid of the
bottom 20 percent of your clients so you can focus on the remaining
clients who will generate more revenue.
2. The client withholds
information. If you find clients not being honest with a particular
situation or withholding valuable information that enables you to do
your work in the most ethical, legal manner possible, it's time to part
ways. You cannot afford to damage your reputation with a client who has
the potential to do harm to himself, and in turn, to your practice.
3.
Clients do not want to be helped. As strange as this sounds, we've all
had clients who did not want our professional assistance, no matter how
simple or complex the situation may be. A client who does not want to be
helped will never accept your advice and will not respect your
intentions. It's time to find clients who will benefit from your
professional experience and knowledge.
How to Fire a Client
Having to say "so long" to anyone isn't pleasant; think about the times
you've had to let an employee go. Nevertheless, when it's time to cut
the cord, you have to do it in the most professional way possible.
Looking
at the three scenarios above, it's easy to see why you would want to
fire a client, but one of the main traits we have as human beings is the
"likeability" factor. For example, you may have a client who will
literally give you the shirt off his back if you ask him for it, but is a
lousy businessman and costs you time and money.
If this
happens, you need to separate your personal feelings from your
professional beliefs. After all, you may see the client in religious or
social situations. Perhaps you belong to the same Rotary or Lion's Club.
What are you going to say to the fired client the next time you see
each other?
The best way to move on is to have a professional
conversation with the client, explaining to him or her why you need to
part ways. You must be prepared and provide concrete examples. Just as
you document activities when you fire an employee, you need to do the
same when you fire a client.
Be reasonable and explain in plain
terms what the problem is. While it's most likely not going to be
surprising to the client that there is a problem, no one wants to be
faced with rejection, so the initial reaction may be more anger than
anything else. If this happens, reassure the client that this is a
completely private matter between the two you and should remain so. You
will talk to anyone about this and you would appreciate it if the client
would do the same.
Back to social media: what do you do if the
client says something negative on LinkedIn, Twitter, Facebook or in a
blog posting? You may very well have to call an attorney to get
involved. However, watch your own temper. It would be unprofessional of
you to lash back in retaliation. Take the high road; the best stance is
to do nothing. It's better to let the client stumble over his or her
words than to react to them.
If it escalates to the point that
your colleagues and perhaps even your other clients are aware of the
problem, it may be time to communicate via letter or e-mail to explain
the situation. Still, don't reveal any information that can be used
against you later on. Again, an attorney can guide you through this
difficult situation.
There are multitudes of business matters
each one of us is faced with, but we often forget the human side of the
equation. Firing anyone isn't pleasant, but with planning,
communications and calm demeanor, you're going to emerge positively from
the situation.
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