Why clients leave cpa firms

Whether or not a client may be struggling financially, "CPAs should objectively assess whether the client is still the right fit for the firm and the service and that they still understand and accept their responsibilities," she said.

The months that follow busy season can be an ideal time to evaluate clients and make plans to part ways with the ones that are no longer a good fit. The first step is to take a close look at where your practice is, and where you want it to go, before getting ready to cull your lists, said Carl Peterson, CPA, CGMA, vice president—Small Firms with the Association of International Certified Professional Accountants' public accounting division.

Then take a look at your existing clients and assess whether your arrangements with them are working well. Some clients will be easy to identify as problematic see the sidebar, "Types of Clients to Trim". But don't overlook clients that have been with you for a while and are pleasant to deal with but whose needs aren't a fit with the firm.

Oftentimes, firms will have clients on their lists that they took when they were just starting out. But after they have grown, they find these clients can be roadblocks. After busy season ends, she pulls up three years of data and compares her time statements with what was billed, to spot unproductive relationships. For example, if she spent 10 hours on a client but was able to bill for only three, that might be a client she would choose to let go. Consider the nonfinancial aspects of a relationship with a client as well.

Keeping the relationship going isn't helping either of you, he said. The stress sparked by the pandemic over the last year makes the need to evaluate your clients even clearer, he said.

Another way to identify problem clients is to ask your staff. Administrative staff or less senior CPAs in firms who have more face - to - face contact with clients almost always have a good idea of where the problems are, Peterson said. Reach out to them and ask them what their experiences are. Once you've decided a client isn't a good fit, think about how to follow up. Not all problem clients will need to be let go. One initial step Fraim takes is to consider whether there's a way to work with clients to overcome the issues they are facing.

So, CPAs, to stay in businesses, must work on client retention and think on why they leave. CPAs take care for all the financial transactions for its clients — be it businesses and individuals, which is indeed very critical information. So, before choosing a CPA firm, clients go through some serious analyses to make their choice.

Even after such thoughtful choice, a good number of clients will not turn back to the existing CPA and switch to someone else. As the tax season for the year has arrived , it is high time that you looked into the reasons that make a client leave their CPA to ensure that you retain the current clients for the next season as well.

Top three reasons why clients leave their CPAs are:. Your newly hired staff must be carrying great potential, along with strong academic backing.

But that does not mean he is all set to work alone on the accounting needs of the clients. Certain practicalities of the accounting are to be learned under the guidance of experienced professionals without which statement generation and tax filing are only going to turn troublesome.

Accounting operations often require a direct interaction with the client and if a novice is attending them, the lack of facts and recent regulation updates will remain easy to spot. The client will take this as a representation of your business and the chances of them staying with you will diminish.

Make it a point to save your client a particular fee and be sure to take credit for it. Gerri Detweiler, head of market education for Nav, does free CPE-eligible webinars for accountants who are looking to understand business credit and financing so they can offer that expertise to clients.

She said the demand for more knowledge around how to help clients manage and build their business credit is huge. Apps like Skype can be used to bring you face-to-face with your client when you can't meet in person. But, ultimately, the best way to manage clients is to give them a system to use to engage with you that they can reasonably handle. That system could be a meeting scheduling app like Calendly or Doodle, which have free versions you can always test internally before rolling out to clients.

Rosen says a top-notch website is now a necessity when dealing with small business clients, not a luxury. Remember important dates like birthdays and anniversaries. How to deal with the other reasons clients leave Of course, there are always other reasons clients decide to part ways with their accounting team besides the value vs.

It is often difficult to know exactly why. For most firms, that's a true statement right now anyway. Freeing up capacity will allow you to commit to new clients and new work with confidence.

Some will say that they can't let clients go before the next billing and collection cycle. That should be considered, but if we wait too long, those same resisters will say they can't transition clients because it's too close to the new service cycle. By all means, listen to and address objections. But remember, you're in a difficult spot now.

A client reduction strategy isn't easy, but it is the fastest way to make space to implement other critical business model changes. And it is the most visible change you can make to demonstrate your commitment to improve the work life of your increasingly weary team members.

I hope you'll start work on it today. To comment on this article or to suggest an idea for another article, contact Jeff Drew, a JofA senior editor, at Jeff.

Drew aicpa-cima. Making the right moves now can help you mitigate any surprises heading into Worldwide leaders in public and management accounting. Toggle search Toggle navigation. Breaking News. Time has come for firms to cull clients By Jennifer Wilson. Your people are tired of feeling overwhelmed. They are worried that the turnover you're experiencing will make the next busy season worse than the last one.

And we haven't even hit the peak "quitting month" of November yet. If you're like many firms, you don't have the right headcount for your current client load, and you'll risk burning out your best and brightest if you don't make an immediate shift.