Every year on October 15, clients send this author’s firm information late into the afternoon, expecting the CPAs to finish their individual tax returns by the extension deadline. The staff has to scramble to finish up returns that could have been completed months earlier if not for the client’s procrastination. Everyone, from the administrative staff to tax preparers, complains about these clients, yet year after year management continues to let it slide. Not anymore; this is the last year the author’s firm will allow this to happen, and the following strategies will be deployed in the future to prevent the slackers from stressing out the firm at the last minute.
Who Is a Bad Client?
Why are these clients so bad for CPA firms? Because they provide undue stress and strain on the entire staff. Not only do CPAs and staff have to track down the client’s information, but the administrative team has to work on a tight deadline, often rushing—and that’s exactly when mistakes happen. Things fall through the cracks, no matter how good the tax return process is. These clients suck the energy out of a firm.
There is also the opportunity cost. Time spent rushing to finish someone’s tax return is time not spent working on a consulting or advisory project or getting new business and better clients for the firm.
It can be hard to let these clients go, especially for accountants who love to help people. But allowing them to procrastinate year after year does them a disservice. It’s impossible to plan for a client who is always a year late, and a firm can’t provide proactive advice to people who don’t care about their finances—which is exactly the message sent by chronic tardiness. They need to change their behavior, and the only way for them to do that is to shape up or ship out.
What is this author’s firm doing? For starters, instituting a 25% surcharge for any clients who do not provide all of their information to use by September 15, and a 50% surcharge for any clients who do not provide all their information to use by October 1. In addition, the firm gives no guarantee that returns based on information provided after these dates will be completed by October 15, and payment in full is required before work begins on the return. If this happens more than one year in a row, then the client will be fired. The hope is that this will force tardy clients to become more proactive; if it does not, they will have to find another firm.
It’s time to change firm practices so that CPAs can do more of the work they want to do with clients who value their services. Waiting on the same bad clients to change their bad behavior is futile. Acting now will free up time for firms to improve services, team morale, and firm culture.