Firing A Client

[Acownt4it]

HELP!!!

Have a new client (husband and wife with two businesses) I provide payroll, write-up and tax services for. They just started with me in Jan.

Here is the problem. They have serious communication issues with each other and with me. When they call, they blame the other for whatever the problem of the day is; then they try to blame others. I see the writing on the wall with these people. Not only do they need marriage counceling (I know this because they continually tell me how useless the other spouse is), but they need an accounting firm that can handle the time needed on their various problems.

Any suggestions how I fire clients like this?

I look forward to your answers.

[Luis Mopeo]

HELP!!!

Have a new client (husband and wife with two businesses) I provide payroll, write-up and tax services for. They just started with me in Jan.

Here is the problem. They have serious communication issues with each other and with me. When they call, they blame the other for whatever the problem of the day is; then they try to blame others. I see the writing on the wall with these people. Not only do they need marriage counceling (I know this because they continually tell me how useless the other spouse is), but they need an accounting firm that can handle the time needed on their various problems.

Any suggestions how I fire clients like this?

I look forward to your answers.

Quick and to the point. Don't lie about why you're firing them or make up excuses.

"Dear John and Mary,

Unfortunately, our firm will no longer be able to provide you with tax and/or accounting services.

We wish you the best in future endeavors.

Sincerely,"

[Jiggers]

Dear Fired Client:

For several years I have prepared your Federal Income Tax Return, Form 1040. Please be advised that effective with the filing of your 2006 Federal Income Tax Return in 2007, I will no longer prepare your return.

I have decided to change the type of returns that I prepare and specialize in other areas of taxation and complexity. Your return does not meet the this type and I must reluctantly resign from preparing your returns in the future.

Each year you are provided with a copy of your return and all original documents that you provided for the preparation of that return have always been returned to you. If you require a copy of any return or work paper, my fee is $0.75 per page plus sales tax. If you need any copy, please call my office at the above telephone number to make arrangements for those copies.

I am required by law to maintain copies of any tax return that I prepare for a period of three years. Your prior years returns have been archived in safe storage and at the end of three years I will destroy those copies.

I thank you for the opportunity to have served you in the past and wish you success in your future pursuits.

[Luis Mopeo]

I respectfully disagree with the prior post. Saying you're firing them because you're changing the type of returns you're doing is a lie. Lying has a way of coming back around and biting you in the butt.

There's no reason to put yourself in that position. Just fire them, and if they call and insist you explain, you explain. But going down the road of making excuses or lying about it gives them the opportunity to manipulate you and back you into a corner.

I've fired several clients over the years with a two-sentence letter. I haven't had a single person call me up and bug me about it. They'll know exactly why you fired them. There's no reason for you to sacrifice your integrity.

[Acownt4it]

Are you both saying I should do it in a letter?

I would like that best. I was thinking I should call them.
They are new clients this year, and they have a tub (literally) of paperwork to pick up. Or, do I drop it off at their office. We are in a small town.

Noel

[Jiggers]

Not a lie!

I respectfully disagree with the prior post. Saying you're firing them because you're changing the type of returns you're doing is a lie. Lying has a way of coming back around and biting you in the butt.

There's no reason to put yourself in that position. Just fire them, and if they call and insist you explain, you explain. But going down the road of making excuses or lying about it gives them the opportunity to manipulate you and back you into a corner.

I've fired several clients over the years with a two-sentence letter. I haven't had a single person call me up and bug me about it. They'll know exactly why you fired them. There's no reason for you to sacrifice your integrity.

I did change the type of business that I handle. I nolonger handle P*I*T*A's.

This was one of the easier type of returns that I no longer handle. They weren't cost effective and they always argued over why their refund was not as much as they thought because one didn't have enough withholding. Wasted my time that I could have been working on another return. And complained about the fee then.

I don't lie and I can justify all of those that I have fired:
Caught one filing HOH with a child and spouse was going to another preparer and filing as single. He got more EIC to cover his self-employment income.
Another business owner had no concept of good tax records and after I finished the return I found out that she had sold her business property and was renting it from the new owner. I advised her to amend and she wouldn't.
And several were just P*I*T*A's.

[jerome]

Your letter did not say they were a pain in the ****. You made it sound like they were good folks that simply had the wrong type of income and deductions, or something along those lines.

I had a client that I had trouble with. Once when he called wanting me to do more work for him, I said no. He asked why not. I said because I didn't want to. End of call.

No need to write a novel about it.

[Snaggletooth]

Noel

Unless you are really changing your practice, Bird Legs' letter is not appropriate. Bird Legs is one of our better board members and is perhaps the last person I would think of as lying, but Luis' point is that you most likely are not changing your practice and shouldn't leave the impression that you are doing so.

I'm wondering if this client can be salvaged. I think a "come-to-Jesus" meeting with both of them is required and you must demonstrate a strong position in dealing with them. If they become offended and leave, then your problem really solves itself. I would make it quite obvious that you will charge for ALL of your time and that spending time in unnecessary areas like marriage counseling will get expensive.

I have been able to rectify unsavory relations by simply confronting them and talking through the issues. Of course, I've been around a LONG time and have been told I'm good at doing this. If it turns out to be more than you're willing to put up with, then "fire" them.

[Black Bart]

When it's over.

I've tried all of the above -- from the craven to the half-hearted to the resolute, forthright approach and all leave something to be desired. There's just not hardly any good way to tell somebody he/she is an awful client and you don't want their business anymore. No matter how or how long you take to say it, they're going to be mad at you.

Still...we do the best we can -- I told:

(1) An 1120 client who kept no books whatever (retained earnings was pushing $250K) that I was discontinuing all corporate work (true and probably just as well for both me/IRS). He was mad anyway.

(2) Three Hatfield-McCoyesque types I didn't want in their inheritance feud (involved guns, arrests, multiple lawyers). One arrogant, one ignorant, one regally aloof -- all were mad. Got a chuckle though -- Ms. r/a announced "Jackson-Hewitt said this was no problem" and my wife -- always quicker than me -- shot back "Oh! Well, good!"

(3) A client who insisted on deducting note principal payments right along with interest that he couldn't do it. That was 1975 -- he's still not speaking.

(4) Did one just last week. Divorced client met his "evil-ex" (as he put it) at my office to sign an 8332. I started to explain, but she, without a word, snatched it away from me, scrawled an illegible signature without reading a line, tossed it back on my desk, and marched straight out the door. I thought about it a few days, then phoned and told him I didn't consider it valid under the circumstances, thought he'd have problems later, and I'd decided not to do his taxes. He insisted she would be "no problem," that Child Support Enforcement expected his return immediately, and "I don't know what will happen now (because of this delay)!" Odd he'd been in no rush before about those past-due thousands. I didn't argue; just said I wasn't doing it and he came in the next day and picked them up with a minimum of words.

Returning the papers can be a problem -- can't leave their important stuff on a doorstep. I've tried certified mail (if not a "tub") with return receipt, but some deadbeats won't pick those up -- then you have to phone or send "regular mail" saying it's not from a bill collector. So...usually you'll see them a little later when they've cooled down or heated up. Keep it short if you can; simply saying "Here's your papers" and nudging them peaceably out the door if possible. Skip the explantions unless they ask -- they won't like what you say no matter how it's presented.

P.S. Never say "I don't want to do your taxes -- say "I'm not doing your taxes." The first sentence leaves open the possibility that you might be swayed by argument.

[BP.]

Unless you are really changing your practice, Bird Legs' letter is not appropriate.

Hey Ron, if I were up at two in the morning I'd start to hallucinate that jiggers were turning into bird legs, too! :->

[Snaggletooth]

Jiggers and Jaggers

please insert Jiggers into my post above instead of Bird Legs. Good folks, both of them.

Sorry people...glad at least some of us are awake...

[Ladynole97]

Just a good letter we use.

I found a great letter that I continue to use. It has a plcae for clients to sign and authorize new accountant to recieve information from me. For the most part it is easier to comminicate with a fellow proffesional than a nasty client:

It gives you various reasons to be used...

Dear ,

Effective [Insert date], we can no longer service your account. We have come to this decision with great reluctance. We are resigning because [Insert reason (e.g. your continued failure to pay our fee for services in a timely manner; we have a conflict of interest between your company and other clients; our continuing staffing problems have made it impossible to serve your needs; we are changing the types of services we will offer in the future; we are concerned about your failure to act upon the recommendations we have made in the past; of our desire to decrease the number of clients we will serve in the future)].

We wish to remind you that we will not be performing any services for you after [Insert date], and that there may be tax returns, elections, or other compliance matters for which you are now responsible. We recommend that you immediately obtain a new accountant, and we will fully cooperate in providing information to your new accountant when your unpaid balance of [Insert amount] is paid in full. In addition, we require the return of the written authorization below, signed by you, to release any information to your new accounting firm. Without your written authorization, we are prohibited by our professional code of conduct from disclosing or discussing confidential client matters with anyone outside our firm.

We appreciate the opportunity to have served you in previous years, and wish you success in your future pursuits.

Sincerely,






Authorization to Release Information to New Accountant:

I authorize xxxxxxxxxxxxx to respond fully to any inquiries from our successor accountant, [Insert name], with any information they request regarding my business or personal tax or accounting records.

[sea-tax]

Noel my only advice is to be honest and clear. Don't mix words , don't hide behind excuses. People may not like what you say but they have to at least respect that you are forth coming and open. Good Luck I know it is never easy.

[Acownt4it]

Thank you all

for responding.

You all gave me sound advice and tools I will be using in my practice.

To update you on the situation.

I called the client last night before I left the office. In a very humble tone, I told him that he would be better off with a larger accounting firm to handle his accounting and tax needs. I said that I did not have enough employees or resources that he needed in order to service his account at the level he wanted and deserved. I told him I had already put 30 hours of work in on his account (since Jan) and that I would not be billing him for this time.
He accepted this explanation with an attitude (which I expected) and said he would come by soon to pick up his tub.
It was a quick conversation and I was sweating bullets by the time I was done, but I know I made the right choice for me and my staff.
Thanks again for your help. Everyone on this board is the best.

[Joe Btfsplk]

for responding.

You all gave me sound advice and tools I will be using in my practice.

To update you on the situation.

I called the client last night before I left the office. In a very humble tone, I told him that he would be better off with a larger accounting firm to handle his accounting and tax needs. I said that I did not have enough employees or resources that he needed in order to service his account at the level he wanted and deserved. I told him I had already put 30 hours of work in on his account (since Jan) and that I would not be billing him for this time.
He accepted this explanation with an attitude (which I expected) and said he would come by soon to pick up his tub.
It was a quick conversation and I was sweating bullets by the time I was done, but I know I made the right choice for me and my staff.
Thanks again for your help. Everyone on this board is the best.

I think you handled it very well. Recommending a larger firm is a good way to avoid telling him that you just don't want to deal with him because of his obnoxious behavior.