5 steps to managing client expectations

By Anita Dennis

Are your clients aware of how your relationship with them will work? Setting — and sometimes updating — client expectations is the best way to prevent future misunderstandings or disagreements. Steps that firms can take to ensure smooth sailing include:

Lay the groundwork early. Many firms begin establishing guidelines even before a client is officially on board. At 30-person Smith Adcock and Company LLP in Georgia, clients receive an email after the initial introduction to confirm an appointment. "We let them know it is a no-cost opportunity to talk," said Rodney Chandler, CPA, partner and manager of the Athens office. In the first call, he discusses the firm's processes and the client's questions and goals. Firms can use the PCPS Identify & Prioritize Tool, which is open to PCPS Section member firms, in this process.

Nicole Davis, CPA, founder of nine-person Butler-Davis Tax & Accounting LLC in Atlanta, said her business clients go through a six- to eight-week onboarding process that explains what will happen in the near and longer term. "It's lengthy," she said, "but it provides good checkpoints. We're clear on what happens next." Clients also receive a welcome packet. Among other things, it explains how clients can contact the firm through a centralized inbox. In addition, to better manage client interactions, team members triage messages regularly and forward them as needed. Because individual taxes are a much shorter engagement, there is a condensed process handled by staff, mainly via email.

In addition to effective onboarding, an engagement letter can also be used to help set expectations, said Natalie Perry, CPA, partner of 100-person Harrison & Held LLP in Chicago, a law firm where Perry provides estate tax, trust, and family office planning. Engagement letters can discuss billing procedures and set forth deadlines and the tasks or responsibilities assigned to the firm or the client, as well as parameters on access to practitioners. Perry's firm uses templates as the basis for creating project memos so that staff can use them without having to create a new memo each time. She may ask a firm administrative staff member to develop an initial engagement letter that she later customizes and reviews. She sometimes follows up a few weeks after the client comes on board to ensure that the process is working as expected and to address any problems. "When you explain what you need in a way that keeps things moving, it makes it possible to bill more effectively, collect fees more easily, and get referrals for more work," she said.

Be transparent about fees. Chandler gives new clients a ballpark figure for fees and explains that the firm will refine the number once it reviews specific work. He finds that clients are generally not price-sensitive if they know what to expect and why. "Being clear is a win for all of us," he said. "A surprise fee does no one any good." In addition, Perry pointed out that discussions may be necessary to help clients understand the nature of the service and the work products they will receive.

Transparency about fees is also important with existing clients. Davis's firm added charges for some of the additional time necessary to keep up with changes in tax rules and relief programs during the early months of the pandemic. She received no complaints from clients. "We told them in advance that we had to learn a lot in a short period in order to help them," she said.

Keep the lines of communication open. Access to their CPAs is a significant priority for many small businesses. Because CPAs can't be available at all times to all clients, Davis works to assure her clients that the firm is still looking out for them. For example, the firm sends informational emails and posts videos to keep clients up to date and let them know that firm members are on top of their areas of concern. Outside of busy season, she blocks time for client care calls so she can catch up on their situations. She also delegates contact when necessary, asking an administrative professional or intern to tell a client they are calling at Davis's request to see if the firm is meeting their needs and if they have any questions about their services. "It goes a long way to understanding how they're feeling," she said.

Emphasize key deadlines. Chandler's firm had long included a reminder in its organizer cover letter letting clients know that returns would be put on extension if the material wasn't in by a certain date. "It was clearly there, but either no one read it, or they assumed it would never apply to them," he said. As a result, even clients who brought their material in on April 10 were often surprised to find they would be on extension. In recent years, the firm has placed a bold sticker on organizers reminding clients of the deadline for avoiding an extension. It has worked so well that the firm's workload has shifted forward, with far more organizers coming in during the last week of January or early February.

Let clients know what's coming. Changing circumstances can cause new wrinkles, even in long-term client relationships. During the pandemic, for example, Perry's firm let clients know about staffing shortages that might cause delays in work products.

Davis's firm alerted clients when it made a change in its reporting process. The firm had always sent monthly financials, but she decided over time that many clients did not understand them and most didn't read them. The firm now sends a quarterly package that is easier to understand. The firm communicated this change in its renewal engagement letter and received no pushback.

Be the firm the client is seeking

"What clients expect is responsive, professional attention and actionable advice," Chandler said. When firms consider how to brand themselves or introduce themselves to clients, "we want to live up to those ideals." Establishing expectations can support that goal. It provides a positive first impression and promotes strong and enduring client relationships.

Anita Dennis is a freelance writer based in New Jersey. To comment on this article or to suggest an idea for another article, contact Courtney Vien at Courtney.Vien@aicpa-cima.com.

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