Firing a client: How and when to do it

Featuring Johanna Sweaney Salt, CPA, CGMA, a partner with Gray, Salt & Associates LLP in California
By Ken Tysiac

It would be nice if CPAs never had difficulty working with their clients.

Unfortunately, that’s not the case. Some of the most challenging clients exhibit behaviors that limit a firm’s productivity and even hurt morale among the staff. The worst behaviors include:

  • Missing deadlines for providing material.
  • Making last-minute requests.
  • Showing disrespect or even abusive behavior toward staff.

Johanna Sweaney Salt, CPA, CGMA, a partner with Gray, Salt & Associates LLP in California, came up with a strategy for parting ways with troublesome clients. The plan includes input from staff at various levels of the firm as well as a polite method for informing clients of the firm’s decision.

Learn more in this video:

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.


Transcript:

Last October 15th, I was in my office and I was trying to get information from several clients that were on extension and they had missed the drop-dead date. I thought, “Doggone it, these are the same ones year after year after year.” Some of them weren't very nice to us, were impatient, saying, “Well, how come my return’s not ready?” like four or five different times over the course of four or five months, but when you still owe us this, this, this, and this. OK, and I thought, I just don't want to work with these people anymore. So I just started jotting down names. One of the things we've also done, and this goes back to keeping the profession of public accounting attractive to our youngsters, we allow our staff to nominate one client to fire every year. Now, sometimes we all agree, sometimes the partner vetoes it, because this may be a family member of a really good client and so we don't want to fire the pain-in-the-neck client, but that makes staff feel really empowered, and they usually all agree. There were probably three clients on my fire list last year that were nominated by staff, and I would agree. People that were rude to staff, that were rude to me — we don't need that kind of negativity in our lives.

The way we fire them is that I drafted a letter and I got a template from my professional liability insurance carrier to make sure that all my i’s were dotted and t’s were crossed. It was sent out on December 31st, and it basically said, we have looked at our practice and the future direction that we're going — and some other nice language in there — and then said, basically, we don't believe we can provide or we won't be able to provide your tax services, your accounting services, fill in the blank, and then we reminded them when their next deadline was and you know we've enjoyed working with you as a client; that may not have been 100% true, but we wish you all the best in the future.

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