Every now and again you will find that a client wants to leave you and move to another accountant. Assuming that this is not a growing trend (if it is then you need to reflect on what is happening in your Accountancy practice) then the important thing is to know exactly what to do when this happens.
So here is a five point plan to help you cope when you do lose a client ….
When you find out that a client is moving on you must act professionally at all costs. Avoid getting into debates with the client about the whys and wherefores of their decision and never tell them they are wrong even if you think this is the case.
If it’s unclear as to why they have decided to dispense with your services then, in a polite and non-confrontational way, do ask them. Something like “I am really sorry to hear that I am losing you as a client. So that I can improve my services in the future may I ask what has prompted your decision. I really would appreciate any constructive feedback that you can give me. Thank you”
As a goodwill gesture and to show there are no hard feelings that the client is moving away do make sure that you wish them well for the future; if they later decide that the move wasn’t the right decision for them this will leave the door open for them to return.
Don’t take it personally
The news about the loss of a client may come from several routes; if they are paying you a recurring fee they may just stop paying you, a professional clearance letter from another accountant may arrive, the client may tell you, or they may just cease replying to your correspondence.
However you hear the news it is important not to take it personally. Part of the life of being a business owner is to take the rough with the smooth and losing clients sadly is just part of that rough. Put on a brave face and deal with the loss; there will be time to reflect later.
Professional Clearance letter
If your client has moved to another accountant then you should receive a professional clearance letter from the newly appointed accountant. It is not compulsory for the new accountant to send such a letter. However qualified accountants with a Practising Certificate would usually be duty bound to issue one.
When you receive the letter immediately acknowledge it giving timescales as to when you will be able to respond to the information needed. Try to respond as quickly as possible; there is no point in having this hanging around on your to do list for longer than is necessary.
Before you respond you must have authorisation from your client to disclose information to the new accountant. All too often the new accountant will tell you that they’ve been told by the client that you can disclose; that’s not good enough for your files which must support a direct confirmation to you from the client to disclose, giving details of who the disclosure can be made to.
No matter what your relationship with the client may have been, under no circumstances would it be appropriate to criticise the client in your response to the new accountant; you will let yourself down if you act anything other than professionally in your response to the clearance letter.
Remember to disengage
Just as you would have set out the scope of work, obligations and terms of business at the start of an assignment, it’s necessary to bring the relationship to a close by issuing a disengagement letter. That way all parties can be clear on their respective responsibilities following the termination of the relationship.
Have a standard disengagement letter to hand which can be modified for the particular circumstances. As a minimum the disengagement letter should state the date that your responsibilities cease and what happens to the client’s records.
Do be specific about any pieces of work that you may have outstanding; for example if you perform payroll for the client clearly state when you will perform the last payroll run.
It is also worth taking the opportunity to reiterate your Practice’s approach to confidentiality of client data and records as well as re-stating your limitation of liability which should have been specified in your engagement letter.
Reflect, learn and move on
The loss of any client should not just be dismissed; the events leading up to the loss and any reasons given for the departure should be reviewed. What lessons can be learnt? Was there anything that could have been done differently to prevent the loss? What could you change to prevent this happening in the future?