Difficult Accounting Clients: How to Handle Them…and When to Let Them Go

When should you build relationships with difficult clients and when is it time to say goodbye?

woman on phone frustrated

When you’re getting your accounting or bookkeeping business up and running it’s tempting to take on any client with a pulse and a credit card. But that strategy can backfire if you wind up dealing with difficult clients who just aren’t worth the time and effort.

4 Common Challenges in Accountant-Client Relationships

If you’ve ever felt like you’re the only one dealing with problem clients, know that you are not alone.

Most accountants and bookkeepers have dealt with difficult clients at some point. After all, most conflicts arise out of simple human nature. Accountants and bookkeepers are humans, and our clients are, too.

Still, you can prevent or overcome many client challenges with better communication and clear expectations. Here are a few types of client problems you may encounter and advice for dealing with them.

FreshBooks Accounting Partner Program ad

1. Differing Expectations About Scope of Service

Most accountants have been there at some point: You think you’re providing monthly bank reconciliations and write-ups, but the client thinks you’re their full-time CFO. They expect weekly, hour-long financial strategy consultations to be included in your monthly bookkeeping fee.

Such disparities in expectations are usually the result of not having a clear engagement letter (EL) or service-level agreement (SLA), and poor up-front communication.

You can find several sample SLAs online, including engagement letter templates from the National Society of Accountants and the AICPA’s Tax Section.

Find one you like and modify it to fit your needs. Just remember, many clients don’t bother reading the whole contract. Have a conversation about your scope of services, fees, and expectations up front to avoid or at least reduce headaches later.

2. Unrealistic Timelines and Deadlines

You know this client: They call on Friday afternoon to announce they’re applying for a loan right now and their lender needed a financial forecast yesterday. Or they drop off their paperwork on April 14 and ask, “I can still file by the deadline, right?”

Clients who consistently wait until the eleventh hour to loop you in or deliver the information you need to do your job not only cause unnecessary stress. They also impact relationships with other clients whose work has to get pushed back to handle rush projects.

It’s up to you to educate your clients about the time needed to do their work well. Every time you say yes and deliver at all costs, you signal to the client that handing you a mess is acceptable.

You don’t necessarily have to say no, but let your client know that their unrealistic expectations may be a problem. Then work with them to figure out what elements of the project can be delivered on a more reasonable timeline.

Usually, there are immediate “must-haves” and secondary “nice-to-haves” in any client request. For example, when a client drops off their tax documents on April 14, you might make it clear that you won’t be able to file their return on time, but you will prepare an estimate and extend their return.

Keep the lines of communication open and try not to overpromise and underdeliver. You set the expectations, so make them reasonable and attainable.

3. Budget or Payment Problems

Your fees are outlined in your contract, but your client is constantly trying to negotiate a lower fee—or they don’t pay you at all.

Getting occasional pushback from clients on your pricing is an unfortunate reality of business, but you don’t want to reduce your fees so much that you’re not being fairly compensated for your time and expertise. When discussing your prices with clients, focus on the value you provide. If it’s worth it to your client, they’ll pay for it.

Rather than reducing your fee, ask whether there is a component of your service that they don’t want. For example, if you’re providing monthly bookkeeping, a quarterly strategy call, and preparing individual and business tax returns, does the client not want the quarterly calls? Do they want to prepare their own Form 1040 using DIY software?

Usually, once the client starts thinking about losing certain services, they realize they want the whole package and are willing to pay for it. And if they’re not willing to pay, don’t continue doing the work.

4. Unresponsive Clients

When you’re dealing with unresponsive clients, you may wonder whether you’re their accountant or their parent. You have to hold their hand, provide constant reminders, and trying to chase them down wears you out. These types of clients disrupt your workflow and cash flow because their projects hang around waiting for information.

Ensure your contract covers client delays by addressing timelines for receiving necessary information and what happens if the client misses those milestones. Beyond that, try getting to the bottom of the problem. For example, is your client struggling to use your client portal? Are they spread too thin, in which case you may need another point of contact?

Consider adjusting your communication channels to fit the client’s preference. For example, some clients prefer email, while others are more responsive to phone calls. Do what you can to make it easier for them to work with you, and you’ll have better results.

How to Fire Clients Who Aren’t a Fit for Your Firm

Sometimes, your best efforts to salvage a client relationship fall flat, and there’s really no resolution. In that case, it’s probably best for both you and your client to part ways.

Signs It’s Time to Fire a Client

If any of these red flags remind you of your client, it’s time to say goodbye.

The client lied to you.

The accountant-client relationship requires a certain level of trust. If you just can’t trust your client, it’s time to cut them loose. Keeping them could get you into trouble or even damage the reputation of your accounting firm.

The client costs you money and time.

Clients who consistently pay late or haggle over your service fees aren’t just annoying—they interfere with your business’ cash flow and profitability.

The client is abusive.

Clients who are excessively rude, demeaning, or threatening aren’t worth your time and energy, and may also drive your staff to quit.

The client doesn’t follow your advice, then blames you when things go wrong.

Your clients are free to follow your advice or do something different. But if they won’t listen to you, it’s not your fault when it doesn’t work out.

FreshBooks certification for accounting professionals

How to Fire a Client (Nicely) in 3 Steps

Once you’ve decided it’s time to say goodbye to a problematic client, follow these steps to fire your client without burning bridges.

If possible, finish the project. Try not to leave clients hanging in the middle of an incomplete project. This shows you’re reliable and true to your word.

1. Send an Email

For the good of the firm, it may be better to come up with an excuse for firing the client rather than get into a confrontation about their behavior. Your professional liability carrier may have a recommended template you can use to protect yourself legally. Here’s one I’ve used successfully in the past:

Dear {Client},

I just wanted to inform you that as of {Date}, we will no longer be able to offer you accounting services.

Our bookkeeping practice is moving in a new strategic direction. Unfortunately, this means we must let go of some of our clients, including you. Please accept our sincere apologies for any inconvenience this may cause at your end. We recommend our clients speak to {Other Firm Name}, which has services that might meet your needs.

Thank you so much for your business over the past few years. We wish you all the best for the future.

Yours Sincerely, {Firm Name}

2. Follow up With a Phone Call

Follow up your email by calling the client to talk through the process and answer any questions they may have.

3. Return Client Records

Always be sure to return any original documents to the client promptly.

Don’t Let Difficult Clients Derail Your Firm

Frankly, the best way to deal with difficult clients is to avoid taking them on in the first place.

Carefully consider your strengths and the kinds of work and types of clients you want to focus on, and avoid taking on new clients that don’t fit the mold.

Next, look back at your lead-generating sources to find out whether a large number of difficult clients are coming from a particular platform or referral partner. Consider whether you want to continue taking referrals from that source.

Above all, spend your energy on clients that respect your time and value your services. As a business owner, you get to decide who you will and won’t work with. If your gut tells you something is off with a particular client, listen to your intuition and refer them elsewhere.

Sal Rezai

Written by Sal Rezai, Founder, Accounting By Sal Corp

Posted on July 26, 2021