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Rick Telberg

Have You Fired a Client Lately?

Why you canít afford that difficult client — and what to do about it.

November 24, 2008
by Rick Telberg/At Large

Invoices that are paid late or not at all, phone calls on Christmas day to calculate year-end numbers, unrealistic demands and even fraud. Almost every accountant has a story of their own clients who are more than just difficult.

Let’s face it. We love our clients. That’s why most accountants are in the business. But some clients are just, honestly, nightmares. Accountants have a name for them. They are the clients from hell.

Difficult clients are a problem to firms of all sizes. To be sure, small firms can be most vulnerable to one or two difficult clients. Larger firms generally have procedures in place to manage client-acceptance and grading. But I'm also seeing firms of all sizes that are tightening up their client acceptance processes and programmatically shedding their "D" clients so they can focus on their "A" clients.

Spotting a problem client may not be easy at first glance but when they become a source of nothing but anguish and stress it is time to re-evaluate the relationship. In fact, it’s sometimes professional protocol.

“It was a nightmare. Definitely not worth the fees even if they were 10 times the amount I eventually ended up collecting,” said Bryan Kisiel of Connellsville, Pa., when asked about his “client from hell.”

Unfortunately, Kisiel’s experience is all too common. In fact, our research indicates that 93 percent of 153 public accountants surveyed have at least “a few” clients they would like to fire.

The tough part, however, is actually finding the strength or the best way to sever such dysfunctional relationships. Still, nine in 10 accountants have terminated a client and many have done so at least once in the last year.

Often, the grief just isn’t worth the money. In fact, too many accountants probably worry too much about losing and replacing the revenue than the more intangible costs of stress, aggravation and distraction of maintaining problematic clients. Savvy practitioners focus instead on the peace of mind that can come from simplifying their professional lives.

“Do not focus on the lost revenue from firing a bad customer,” advises accountant Wayne Davies. “Focus on the simple fact that you’ll feel so much better knowing that you won’t have to deal with this jerk any more.”

“You end up spending so much time and energy putting out the fires they cause,” Davies says. “Do you really make money on them when you factor in the value of your time?”

That’s the situation Jon Herberg of Billings, Mont., found himself in with a small-business client from hell: “The wife is a woman from hell. The biggest complaint I have is that she never hears what I have to say. Whether it is tax planning or any conversation, we seem to be unable to communicate. I take good notes at our meetings and there has not been a time when something is misunderstood and she has not been afraid to tell me I screwed up because, no matter what I have in my notes, she could not be wrong. I dread every meeting with her. During tax season, I know I should fire her but hate to do so when they have not had time to find another accountant. The rest of the year I keep hoping she has changed and think I need to try harder to get along. Their annual fees come to less than $400 a year, not a big account.”

“I once had a client who was a very mean old lady,” said Marc C. Phelps, CPA, of El Segundo, Calif., with no offense meant to the old or the lady-like — just the very mean. “She used to yell at her accountants for every little mistake and any misunderstanding. Picture a little old 82-year-old lady who speaks like a sailor.” (And no offense to sailors.)

And then there’s the client who just didn’t understand personal boundaries or even common courtesy. “He was ‘handsie’ with his bookkeeping staff in front of me, discussed his extramarital affairs around me and bragged about sleeping with his son’s girlfriend,” said Teri Ann Kruse of Portland, Ore. “He wouldn't give me signed copies of documents and I had a hard time getting him to sign engagement letters.” They parted ways in less than six months, but, Kruse continued, “My client from hell had residuals.”

“After getting rid of him,” Kruse said, “his records were subpoenaed and I was visited twice by IRS agents and attorneys from the U.S. Antitrust Division of the Department of Justice.”

Sherry Craighill, of Oakhill, Va., described her client from hell as a “type A on steroids.”

“The narcissistic micro-managing ‘I can do your job better, faster, smarter than you’,” Craighill explained. They “demanded constant and immediate attention by phone, e-mail and frequent unscheduled visits.”

A problem client may not be easy to spot at first glance. But here are a few types of clients who are sure to cause trouble:

  • The bargainer: Wants to negotiate price on everything. And then they question every detail in the invoice.
  • The needy: Constantly makes new demands, and then drowns you in e-mail, phone calls and office visits. And it doesn’t stop on evenings or weekends.
  • The whiner: This client is a chronic complainer and may even get aggressive or abusive.
  • The unreliable: This client is always late to meetings, cancels meetings at the last minute or even fails to show up.

I’m sure you’ve met at least one of those characters.

WHAT’S YOUR “CLIENT FROM HELL” STORY? Sound off here.

Copyright © 2008 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.

About Rick Telberg

Rick Telberg is editor at large/director of online content.

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