Firing a client as an accountant

It may seem that as an accountant, the more clients you have, the better. But if clients don’t follow through on their promise and make your job more difficult or stressful, firing a client can protect your firm. That said, this may seem daunting if you don’t want to hurt your firm’s reputation. 

This guide will discuss firing clients as an accountant, including:

• Why it’s worth firing some clients 
• How to identify problem clients 
• How to fire a client gracefully 

To avoid having to fire clients as much as possible, you may want to read our guide on finding your ideal accounting client. 

The idea of firing a client may seem at odds with general rules of business sense, but some clients slow down your practice and cause burdens rather than benefits. Strained relationships can arise, caused by opposing work ethics, unrealistic expectations, or contrasting values.

If certain clients become a problem, they may hurt your business in the long run and stunt your growth. To fulfil their contract, you may have to work overtime and waste valuable hours trying to please them. In the end, these clients could lose you money, especially if they have a low turnover or dispute payments. Plus, the extra work they cause you may reduce the quality of your services for other clients. 

On top of all that, if you decide to specialise your accounting business, some existing clients may not fit your chosen niche. That’s not to say you should cut any clients who don’t fall under that umbrella, but it may be worth assessing your client base to see which ones work for you and which ones don’t. 

So how do you work out which clients are worth firing? If you fire every slightly tricky client, you could lose too many. So, assess clients carefully to see if they’re serious problems. 

If you consider firing a client, first try identifying if they’re actually a problem. Common characteristics of problem clients are:

• Being disorganised and late 
• Making payments slowly, late, or disputing them entirely
• Using your least profitable services 
• Causing you to lose money
• Disagreeing with your methods 
• Backlogging or slowing your work
• Having unrealistic expectations 
• Being inconsistent with communication and desires
• Being difficult to please  
• Acting disrespectfully 

One of these behaviours may not be grounds for termination, but a combination of them signals that the client likely isn’t worthwhile. 

Sometimes identifying problem clients isn’t black and white. So, consider creating a tier system to assess your client base. The top tier will be your A-list clients — the  most profitable and enjoyable clients who are worth retaining.

For example, A-list clients are likely:

• Organised
• Reliable
• Timely with payments, communications, and documents
• Profitable 
• Enjoyable to work with
• Aligned with your speciality, values, and expectations

The following tiers can be less profitable clients or those slightly more difficult to work with. The more red-flags clients exhibit, the lower tier you might place them. If Tier-F is fireable clients, Tier-D might be clients to watch closely. If they continue to exhibit negative behaviour, they could move down.

Firing a client is your last resort, so if their issues seem fixable, you may want to try that first. For example, if the client isn’t profitable enough, you could raise your fee. If the client agrees to the new terms, you can keep them. 

On the other hand, if they are disorganised and untimely, you may want to explain that it’s affecting your business. By coming up with a plan to improve these issues, you can avoid losing the client. This tactic might be something to try on Tier-D clients rather than bottom tier ones that you’ll be less able to reason with. 

Even after you decide which clients are worth firing, you may worry about hurting your reputation as an accountant. Luckily, we have  a few simple tips that should help you  let go of clients gracefully and productively. 

First, check the contract you have with your client to see if you can terminate the relationship. Following your contract will help you remain professional and transparent. In fact, try to make your expectations clear when you take on new clients and include contingencies in the contract. Then, you can point this out when a client is not meeting expectations.

If possible, try to wait until the end of a client’s contract to let them go. This way, it’s less messy. When it’s time to renew the contract, set a meeting to explain the situation to your client.   

Next, be sure to make the situation clear. You may want to soften the language and be respectful to avoid confrontation, but make it clear that this is the end of your professional relationships. Try not to go into unnecessary or unhelpful details, but be honest about why you need to end the relationship. Make sure to hold the conversation in a non-accusatory manner. 

For example, rather than telling a client they’re always late and unreasonable, you could say that you need to protect your business’s financial health and plan to shift your focus.

Apart from respectfully explaining the situation, try to make this conversation constructive. Without coming across as condescending, you could offer advice to the client. If possible, you may even want to refer them to another accountant that may be more suitable to their needs. 

Finally, you’ll need to make the breakup official. To do this, write a document that outlines the closing of this professional relationship. With proof of termination that both parties are aware of, you can move on to helping more beneficial clients. Overall, having an organised and professional firing process will help you appear reliable and consistent with your client expectations. 

Once you eliminate problem clients, you can focus on improving your services. To do this, save your practice time on manual admin and help your clients keep organised records with Countingup’s free accounting software. It’s built specifically to help you manage your self-employed and sole trader clients.

Practice clients get access to an exclusively great value business current account that takes the strain out of essential bookkeeping.

If you’re looking to receive structured client data in real-time, without continually chasing for boxes of receipts, you’ll find Countingup a breath of fresh air as a fully MTD compatible software that frees up your time to focus on running your business.

Discover more about the advantages of Countingup here.