Jun 2020

Firing clients the right way

Australian accounting firms: Firing clients the right way

By: Odyssey Outsourcing
Tags: Accounting Firms, ad-hoc model, Australian Accountant, Compliance Work, profitability

We’ve all seen the silos of different client types:

Type A – clients you love working with and are highly profitable, the kind of clients you’d go on holiday with..

Type B – clients you like working with and are profitable

Type C – clients that are ok and you make some profit

Type D – clients that cost you time and money, loads of emails, and you’d love to let them go. Normally profitability isn’t really an issue, but their not the highest profitable client.

At the same time, these one dimensional classifications don’t really allow for the varying nature of Australian accounting firms. Firms go through growth cycles and usually are expanding or shrinking.

Let’s go straight to the important point: During growth, you can find that your older clients no longer fit your company. This can happen for many reasons. Usually the time and attention you spent on these clients in the early stages of your company growth was ok, but when you put systems in place to manage higher volumes of work, these clients still wanted to do things the old way.

The big crux in the relationship usually comes when it’s time to raise the prices for your service, reflecting the investment you’ve made in your systems, people and the firm.

Usually the older clients are the ones who have plenty of reasons why their prices shouldn’t go up. They were there at the start, they can’t afford the price, they’d just like the price for a little longer (while they shop around for a new provider). There’s certainly plenty of excuses and reasons out there.

However, relationships need to be managed, and you never know when the client might come back, or they might refer you to another person.

So it’s critical that you manage the discussion with respect, and clearly explain the new path which your firm is undertaking.

Oh, and if you need help with some outsourcing, then we’re of course happy to help.

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