Do you have any clients where the following is true?
- They’re terrible at paying on time (or if at all) and question the fees
- The team get sucked into spending more and more time pleasing them and working on their jobs
- They never send things in on time, it’s always very last minute
- They are rude or difficult when dealing with your team
Chances are, you have a couple of clients who fit some (or all) of the criteria above. And if that’s the case, then these problem clients are seriously hindering your practice growth…
Picture a parent driving a car with children in the back.
If the children are misbehaving, and the parent has to turn around to see what’s going on, then their eyes aren’t on the road and it’s an accident waiting to happen.
The same applies for managing and running your practice…
If you’re always looking backwards dealing with problem clients, then you can’t be looking forwards at growth.
So, what can you do to deal with problem clients who are hindering your growth?
Depending on what makes them problematic, you have two options:
1. Increase the fee and demand payment upfront
If the client is problematic because of the first 2 reasons highlighted above (bad payer and too time-intensive) then one of the options you have is to increase their fee and demand the full payment upfront.
By doing this, you can ensure that the job becomes much more profitable so that you can justify the additional time spent on the client, and also ensure that you will get paid for doing it.
If the client is unhappy with the suggested fee increase and payment upfront, or you simply decide that regardless of the fee you don’t want to work with this client any more, then move on to option 2…
2. Fire them
Every practice should have a system for firing clients
If you had a problematic staff member, you would get rid of them, so why is that so many practices are reluctant to let go of problem clients?
The time and energy you and your team spend dealing with these clients, could be better spent on:
- Servicing your existing clients more
- Winning new clients and servicing them
I recommend that all practices at least once a year, go through a process of grading their clients, and firing any that are deemed problematic (unless of course option 1 above applies).
So how do you go about firing them?
It doesn’t have to be complicated, simply send them a covering letter/email and a disengagement letter.
Here is some example wording from a letter one of my clients sent out which you can use:
We are no longer able to act as your accountant
We appreciate your business and as you know there have been recent changes in our firm. We have worked hard to maintain our level of service to all clients and, due to changes, unfortunately we can no longer do so. Regrettably we must ask you to engage another firm to provide you with the services listed below with effect from xxxxxxxxxxxx /or with immediate effect.
During the time that we have acted for you we have provided the following services to you: (List services)
The work that is still in progress/outstanding is: (list with dates for filing/due dates)
It is important that your new firm is made aware of this as we will not be responsible for any deadlines that may be missed and penalties or fines may be levied for late filing.
The advice that was provided to you during the course of our professional engagement was for your sole use and did not constitute advice to any third party to whom you might have communicated it. We accept no responsibility to third parties for any aspect of our professional services or work that has been or may be made available to them.
During the time we have provided services to you, we may have collected information from you and upon request we will return any original documents that legally belong to you. If requested these records will be returned to you and should be retained by you to satisfy your statutory obligations. We should advise you, however, that if you fail to collect such records within six months of the date of this letter, we cannot be held responsible for their safekeeping and we may return any documents to your last known address.
With reference to our fees, we calculate that an amount of £………. plus VAT, as set out on the attached invoice, remains unpaid by you and a remittance by return is requested.
To confirm that you have read and understood the contents of this letter and agree that it accurately reflects your understanding of our disengagement, please sign and return the enclosed duplicate. If it is not returned to us within [14 days] of the date of this letter, we shall proceed as if you had provided such agreement.
We will be happy to work with your new firm to ensure that the conversion runs smoothly.
Thank you for your past business and your understanding. We wish you the best of success in the future.
If you currently have problem clients in your practice, then they could be seriously hindering your practices growth. Either increase their fee, or fire them. Because when you do this, you will reduce the headaches and worries that you have, and free up time for you and your team to focus on servicing your existing clients and winning new ones.