The secret accountant on… dealing with challenging clients.
Clients come in all shapes, sizes, colours, designs and forms. As practitioners we would love to have a portfolio that is full of growing entrepreneurial businesses and one that could create a bottomless pit in terms of invoicing opportunities!
However, in real life this rarely is the case as clients are often a mix, ranging from a self-employed start-up selling goods on Amazon to listed public companies with several subsidiaries abroad.
By definition a challenging client is one that take up most of your time in terms of meetings, phone calls, emails, and who want as much as possible from you for free – while providing you with the lowest form of financial return.
With word-of-mouth referrals slowly giving way to internet-based reviews you risk negative internet reviews should you ignore such clients. On the other hand, given the heat generated on the price front by the unqualified lot masquerading as accountants, challenging clients are getting bolder and bolder by the day.
A classic example is IT contractors. As the 20th century drew to a close the number of ‘know all’ IT contractors and ‘one man band ltd’ companies blossomed. However, sensing revenue loss, HMRC countered with a press release (No IR35) in 1999 seeking to lift the corporate veil, and then followed it up with changes to the legislation.
The umbilical connection between contractors and the internet 24/7 means that IT contractors know everything about everything! So, typically their selection of an accountant follows the ancient tradition of a bride selecting the bridegroom from out of a range of suitors. Successful accountants will need to be Google-qualified and will be expected to pack a lot of free advice in to the quote. And yes, the quote must cover the cost of a few kilos of dividend vouchers as well!
Evidently highlighting the issues of challenging clients was a conversation where a client was heard fiercely arguing with an accountant that capital gains tax exemption of £50,000 (s.236B TCGA/92 - applicable to those giving up employment rights for shares) will apply to the gains made on normal sale of company shares! This explains how dangerous Google-knowledge can get!
So, how to deal with challenging clients? Here are a couple of suggestions:
Apply a premium: given that these clients can eat into the professional hours of an accountant, apply a premium to the rate you charge; anything from 1.5 times upwards the fee charged to normal clients
maintain a strict professional relationship and enforce the professional code of conduct without bringing any sort of friendly or emotional elements into the equation.