How to Fire a Difficult Client

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How to Fire a Difficult Client

Winning and keeping clients is the key to success for any accountancy business, but what happens if your relationship with a client becomes strained? Maybe they’re unresponsive, difficult to communicate with, overly demanding or slow to pay. Numerous possible red flags could lead you to think it’s time for both parties to move on. But how do you let a client go professionally, and when do you know if it’s the right time to do so?

When to fire a client

It can be difficult to accept that it’s time to end a relationship with a client. Chances are you worked hard to bring them onboard in the first place, and if the relationship was initially positive, it can be difficult to admit that it may not be salvageable. Of course, should you start to reach this situation, it’s important to try to communicate with the client and explain your issues and what could make things run more smoothly. Suggest implementing processes to ensure you have the information you need when you need it, and generally try to avoid things ending negatively.

Always try to speak to the client directly in this situation, suggest a meeting where you can both run through your expectations and goals, and perhaps even amend the existing contract to more clearly reflect the reality of the situation. If, for example, it’s taking your team more time to complete reports or analyses due to a lack of information, add extra time into the contract or suggest technology to automate processes. Indeed, there may be relatively simple fixes to problems that may initially seem insurmountable. 

Unfortunately, there are times when the best option is simply to go your separate ways. One way to analyse if this is the case is to examine whether they cost more to serve in time and effort than they bring into the business. If this is the case, it simply doesn’t make financial sense to continue working with them. The decision may not be purely financial, however. If the client doesn’t respect boundaries and feels you should be on hand to respond to them day and night if they’re aggressive, or they dismiss your advice believing they know better instead, continuing to work with them could harm your business, affecting the team morale and taking focus away from other clients.

How to fire a client the right way 

Once you’ve reached the point where you’re sure firing a client is the right approach, try not to do it in the heat of the moment. While there may be one final conversation, email or action that pushes you over the edge, don’t fire a client in anger. While you may no longer want to deal with them, that client may know other people you work with or want to work with, and if they share their experience with you, it could negatively affect your reputation.

So, what should you do? First up, finish any work you’re doing or find a time when stopping your work will cause minimum distress. Again, think of your reputation here – if you leave a client in the lurch on a reporting deadline or don’t finish filing their returns, they’ll likely tell other people, and you won’t come out of it well. If you have an annual or monthly rolling contract, try to tie it in with this. You could even refer them to another accountancy firm if you think they may work better together.

Also, consider how you plan to tell the client you’re terminating the relationship. It should certainly be put in writing, but you may choose to have a phone conversation with them too. You could do this before to warn them that it’s coming, but a follow-up call may make more sense as it allows you to check they’ve got the message and understand the situation. You can also start to work out the details of any handover you may need to deliver or any invoices that still need to be settled.

Regarding the wording for the email, there are a few possible approaches to consider.

A polite ending

This involves being honest and polite about the situation. So, instead of focusing on the relationship breakdown, it will centre on you not feeling you’re the best accountancy practice to serve their needs. You may also offer to share contacts of other firms that may work better for them.  

Be upfront

As a more direct approach, the upfront option is best used if things have got so bad you know there’s no chance of salvaging anything from the relationship. The tone of this will be more firm, but it’s important to remain still polite. Simply state that you’ve noticed problems in the relationship and that you’ll be terminating the contract. If the client has been abusive or behaved in a particularly inappropriate way, you may want to mention this as the reason for termination. If nothing else, it may make them rethink their approach to the next accountancy firm they work with.  

The rate increase

If you feel the client is taking more of your time and effort than they’re worth for the return, or if you’re unsure if you should terminate the contract, informing them of a rate increase could be the way forward. Getting a higher rate could make a tricky client more worthwhile, but if it puts them off, that’s also fine. If you want to fire the client, this can be risky, so use it wisely.  

Wait the contract out approach 

There are also a couple of options for those less keen on confrontation. The easiest one could be to wait until the contract ends, at which point you can let the client know that you’re not in a position to offer them your services going forward. This has the advantage of giving the client notice so they can make alternative arrangements in good time, but it does require some patience on your part.  

Make an excuse

Another option could be to make an excuse. You could say you’re focusing on offering different services, don’t have the staff available or are undergoing changes that mean you will no longer be able to work with them. This approach also lends itself to offering a referral if you feel comfortable doing so.

How to avoid bad clients

While it may be impossible to avoid demanding clients 100 per cent of the time, there are steps you can take to do so and minimise their impact on your business. This could include:

Create client acceptance criteria

While it can be tempting to say yes to every offer of work, think about what your ideal client would look like and only work for those who tick most of those boxes. For example, you could only work with clients that have a turnover over a certain amount, or that work in a specific sector or require a certain level of service.  

Look out for early warning signs

If you’re speaking to a potential client who fits these criteria, look for other warning signs. If they don’t respond to messages, are unprepared in meetings or are rude or dismissive when they’re in negotiations, this is likely how they’ll act once the contract is signed. You’ll need to decide if that’s something you’re willing to put up with.  

Have clear and detailed contracts

If you decide to proceed with a new client, having a contract clearly outlines your scope of work, fees and what’s expected of your client is essential. It’s also worth explaining how you work, hours of availability, software or systems you’ll be utilising and so on. Hence, the client is clear and confident about what will be happening.  

Analyse your offering

It’s always easy to see the flaws in a challenging client, but it can be more difficult to see any areas where your business could contribute to the situation. Don’t forget to take a step back now and then to check that the tools you’re using are fit for purpose, workflows are efficient, you’re appropriately staffed, and you’re delivering the service your clients were led to expect they’d receive.