Keeping A Client

[geekgirldany]

Hope some of you would not mind commenting on a situation I have.

Recently found out that a client of mine hired a bookkeeper. Before this I was doing all bookkeeping/payroll and going the office two times a month. I had been told things had slowed down and I wasn't needed every week. It really came out of no where them hiring someone else. I called on the day I was suppose to go in and was told by owner's daughter about the new bookkeeper.

Talked to the client today and was told they needed someone daily. She said she had left a message for me (she did not) to tell me before the day I found out. She also said she wanted to retain me for tax preparation and "consultations".

I made around $6,000 a year from this client. Now it will be down to $500 assuming only tax prep. Client has had previous trouble paying payroll taxes past and present.

It really hurt me that this was done as I have been doing their bookkeeping for over 10 years. Maybe I am being petty (?sp) but just wondering if now might be the time to cut them loose permanently since they have had such trouble with paying taxes.

Would appreciate any input
Dany

[solomon]

Looking at it from your ex-client's position, it is probably a good move given full time help is needed.

You were charging them $250 per visit twice per month - $6000 annually for 24 visits.

Assuming the new position works 5 days per week for 50 weeks - comparable to 250 visits - times $250 equals $62,500 annually. Surely they are paying much less than that for a bookkeeper. Perhaps this reasoning might be somewhat fallacious .

Having said that, I empathize with you losing a client. However, from outside looking inside, it might be wise to continue doing their taxes. For example, perhaps this new bookie will not work out for them. Finally, in time they might decide to engage you again.

I am sure you will make a wise decision - good luck.

[outwest]

Clients come, clients go...

I always hate to lose a good client, but I learn a lot from those situations. Took them for granted, slow response or the infamous cheaper preparer. Whatever. I try to always use those defections to consider what impact I had on the decision and learn what to change or where to improve. That self examination always improved my practice.

Still hurts some, but it's a fact of life clients do this.

[Jiggers]

Been there, done that

Large client that I made significantly more that $6,000 per year was constantly badgering me about fees. Yet he wanted more and more work. More and more detailed monthly financials, etc.

So he hires someone who is going to do most of my work and I will just have to do minor monthly adjustments, review his work, and get paid a lot less.

So I bite my tongue.

That person screwed up so much, that I was called back to do the work I was doing. And my fee went up.

This client did that to me 11 different times and each and everytime I jacked my fees up to straighten out their messes. Over about 15 years. Then he finally got the message and never questioned me or my fees again.

I was making over $30,000 per year from this one client.

I no longer have this client. He died. His widow shut his very large business down.

But I did make a lot of money over the years.

Moral. Bite your tongue and see if he comes crawling back!

[Gretel]

Dear Dany, I can't tell you how much I sympathize with you. I just struggled through a changing relationship with one of my clients (over $1,000 worth each month) myself. It was not that I couldn't accept that things changed (now to $100/month), more that I missed being talked to and included in the process.

I realized that I wanted more than the client to have the books in order and that I stressed over deadlines, which actually was the client's responsibility and not mine and the non- or late communication drove me nuts. For the longest time I thought everything that I have to offer is appreciated. But I was wrong. The better I could let go of what I thought the engagement was the better I felt and I knew it would be coming to an end (hasn't yet).

Just like you I thought the client lied to me about having send e-mails but it actually turned out that it wasn't a lie. Several e-mails came days later and it was obvious that they were send earlier and not that day. E-mails and messages do get lost. However, even letting you know one day ahead is nothing and because of that you might want to decide to not work with that client any more.

Otherwise, as long as they are paying you, what would you care if they are having financial trouble. You did get paid, didn't you?

[geekgirldany]

Thank you all for responding.

True I have to look at myself and if there was anything I did that would have brought this on. My duties changed a great deal in 2010.

Children gradually took over running of the company. This is when I started being told that a certain person would handle certain tasks. It got very confusing and disorganized. Client told me to take these tasks back over. I was never able to do this. Another thing that might have brought this on is that I refused to make the payroll payments each week through EFTPS because of their past issues.

Soloman, true I can understand that if they need someone daily. I guess it is just not being told until after the hiring.

Jiggers, she has done this about two times before. Once when a relative was to take over bookkeeping, then when I tried to go up on pricing. I went back down on my pricing to keep the client. I am giving them a good discount on my tax prep services because I was doing monthly work for them. So if I do keep them on I will have to go up.

Gretel, thanks.
I just wish she would have told me. I found out two weeks ago from the owner's daughter. Client just called me today about what was going on. Messages can get lost but so far I haven't found any.

Client always paid... but then I was the one writing the checks. Most of the time they hold checks until they have money to pay vendors.

Going to think on this some more. Client has said and done things to me in the past that I let go. I guess I need to make sure I charge what I am worth... this time.

Thank you to everyone for talking this over with me,
D

[S T]

Analogy

I have had to try to calculate this recently as well, on a client that decided to challenge me on fees, and justify hours and what I did, so I am well aware of costs and trying to break down the hours and components of services in comparisons to some competion.

If a bookkeeper is hired daily at 8 hours - 5 X per week X 52 weeks, for the calendar year that equates to 2080 hours, (cut it back to 2000 hours giving a 2 week vacation) based on 40 hour work week - at $ 10 per hour that would be 20,000 a year, and everyone can do the math from there if it is a higher per hour rate. A lot more than what Dany is charging - So Dany is not charging hourly rates and way below hiring a full time bookkeeper.

I wonder, why this "Client" or the "Client's Family" all of a sudden decided that more hours were necessary in a month??? Dany only probably put in 4-6 hours or 6-8 hours per visit twice a month - why the need to go to a daily hour per day per week?

Was there a change in business operations, that needed more bookkeeping time spent, and why was it not offered to Dany to have the opportunity to adjust her time and her fees, after a 10 year relationship?

Something does not equate, and I do not think it is $$$ driven

Sandy

[S T]

Similar Situation

Dany,
As you know I had a similar situation, that materilized out of nowhere. My heart goes out to you, as I was devastated as well, after the long term relationship. It is just so hard to keep the emotions in check with business practices.

My client's motive was "fee" driven - although I do know and believe his son that has been brought into the business, initiated a lot of the conversation. Neither taxpayer nor son, have any accounting background - son has Computer/IT skills.

I am not sure, what my final longterm outcome is, but the client and I did arrive at "mutual" understanding, and the client will now be performing more "data entry tasks" for a reduced fee. So I still retain the client, and supposedly will have less work to do (yeh right)

Your scenario is a little different, in that no one discussed anything prior with you, so I would try to contact the taxpayer (not son's, newly hired bookkeeper, etc) to find out what is going on) that info might give you some insight. (unless this is what you have already accomplished, as what I might be reading in your post) Is the taxpayer all of a sudden ill/sick, or just turning over the business to the family? Not sure I would understand, why it was not discussed with you that add'l bookkeeping time was needed, is the taxpayer still involved, or has the family taken over?

I have an issue with going from full service (accounting, payroll, taxes, etc) to just Taxes. But only you can answer that question and find your comfort zone with this client and the 10 year history. We all know that most small business needs some accounting corrections in order to properly prepare the Tax Return - I have yet to find any small business that I don't have questions, when I only prepare the Tax Return, and look at their "sketchy accounting".

I will also be curious of other responses.

Just know that I believe most of us are here to give you support and also our experiences. I know some of the responses to my issue were helpful.

Let us know

Sandy

[geekgirldany]

Hi Sandy,

I'm glad you were able to get things worked with your client. I hope it goes well.

I did talk to the client and she said that they needed someone daily as they have a new customer that is requiring more of their time. That daughter could not handle "it". She said they could handle things when I came twice a week (which I never did) but since I am only come twice a month, children could not handle it. Client is also half way retired trying to get children to run it. She said it was time to get the company back on track.

Maybe I need to call back and ask if I was lacking in my duties. Also explain that me coming twice a month was not my choice but her children.

[erchess]

Dany,

I know it hurts to be rejected and I am sorry. I think if you are still looking for more business, then keep this company on their terms for now and see what develops. If you are looking to reduce your client load, then this would be a good candidate to let go.

In the future you might adopt the policy that I have about who in a business I work with. I always have one person or a married couple and I view them not the business as my client. When the business calls me it needs to be the person or one of the couple. When I call the business the person or one of the couple needs to take the call or have voicemail available. I don't insist on working with the top person but I do insist that one person have full authority over all matters pertaining to my services. Can they change who my client is, perhaps we can negotiate that but I have literally told callers "you are not the person at client company I work with. Send me proof they are dead or no longer part of the business or have them call me."

[Uncle Sam]

Drop the Client

Any client who just drops me all of a sudden without speaking to me about it first and attempting to hide something - is just not worth attempting to keep.

Plenty of times I've had to let go clients who were, aside from losing the money, were emotionally upsetting me due to their attitude, work habits, and other non-money issues.

It took me a long time to come to that point, but when I finally did, I had no regrets about doing it to some clients. No money in the world is worth my emotional stress simply to keep them for the sake of holding on to one more client.

[kpangelinan]

Large client that I made significantly more that $6,000 per year was constantly badgering me about fees. Yet he wanted more and more work. More and more detailed monthly financials, etc.

So he hires someone who is going to do most of my work and I will just have to do minor monthly adjustments, review his work, and get paid a lot less.

So I bite my tongue.

That person screwed up so much, that I was called back to do the work I was doing. And my fee went up.

This client did that to me 11 different times and each and everytime I jacked my fees up to straighten out their messes. Over about 15 years. Then he finally got the message and never questioned me or my fees again.

I was making over $30,000 per year from this one client.

I no longer have this client. He died. His widow shut his very large business down.

But I did make a lot of money over the years.

Moral. Bite your tongue and see if he comes crawling back!

Lots of responses here, but I tend to agree here as the same thing happened to me....big client...went to his location once a week and he hired a bookkeeper. His idea was to have the BK do what I was doing but also have her do other duties as well. I don't blame him as it was a cost savings measure and something I might have done had I been in his situation.

He didn't like the service he was getting with his new person and the money he was paying me was worth the service I provided in the end and had me come back.

[taxxcpa]

Lost client

Lots of responses here, but I tend to agree here as the same thing happened to me....big client...went to his location once a week and he hired a bookkeeper. His idea was to have the BK do what I was doing but also have her do other duties as well. I don't blame him as it was a cost savings measure and something I might have done had I been in his situation.

He didn't like the service he was getting with his new person and the money he was paying me was worth the service I provided in the end and had me come back.

I had a $ 15000-per-year client who switched to his brother's bookkeeper who does the accounting free and the brother's CPA who does the tax free in exchange for a rent-free office provided by my ex-client's brother.

I had another larger-fee client that went bankrupt.

You just can't keep all of the bigger clients. It is better to have a lot of small ones.

[oceanlovin'ea]

just my opinion

As I have gotten older, I tend to not let things that other people do upset me as much as I did in the past. I can only control how I react to people and situations, not what they do.

I think if it were me and they wanted me to do their tax return, I'd do it. You have done most of the bookkeeping that will be on that return so it won't a difficult return for you to do.

About raising the fee...see how you feel when you finish the return. (That is what I really like about working alone and setting my own rates. You can charge them anything you want)

Then let it ride. See what happens in the next few months. They may call and want to come back to your old arrangement. See how you feel then. If you need the work, you might want to work with them again. Or you might realize they were a lot of stress and that you feel better not dealing with them.

The only thing you really have to decide now is if you will do their tax return or not.

Hope it all works out well.

Linda, EA

[Nashville]

Behind the Scenes

If it's true this client couldn't really afford to have more accounting done for them, it doesn't make sense that they hire a full-time "bookkeeper."

My guess is that you are only seeing the tip of the iceberg. Small companies that are family-owned are notorious for hiring kin folks or close friends that need to find a job. This might be the "real" reason behind hiring someone.

"Oh...and by the way, since you'll be here anyway you may just as well start doing our bookkeeping" We're paying someone else and we can save the money we're paying Dany if you just start keeping the books.

Dany, reading between the lines, YOU are not going to be the big loser in this scenario.

One would have to be a total idiot if they thought the above situation was the result of a careful search for a qualified person to handle an ever-growing burden of bookkeeping. For one thing, this person did not possess the expertise to find a job on her own and had to rely on someone's family or in-laws to take this over. Secondly, from what you tell us there was no "heavy burden" for increased bookkeeping. Thirdly, the natural result of this will be a set of books that will be damaged beyond repair by someone who doesn't know what they're doing, and REMEMBER THAT at the end of the year when you are called in to do their taxes.

Not all situations are that covert, but in my experience this sounds like what I have observed at least 75% of the time in a small town environment. "Town Fathers" and "Pillars of the Community" don't look for the best talent to fill their jobs. Invariably they look to their children, neices and nephews. That way four generations from now the same people who run the town now will be running it then.

Such a positive message!! Have a nice day...