Knowing how to deal with all of your clients’ needs, while protecting your own, is essential for a healthy working relationship that benefits you both.
Just as you need to deliver the service that you’ve promised, you need to also set clear expectations upfront to ensure your clients don’t have unreasonable demands about the delivery of that service. This should be established with your rules of engagement letter.
So, what can you do, if things go wrong and the business relationship starts to deteriorate?
These are some of the warning signs that might be indicating a breakdown:
- The client challenges your fee
- The client starts to challenge the quality of your work
- Unreasonable expectations with regards to deadlines
- A client expects you to answer their call/email, no matter what time of day or night
- They think that you will be doing some work that you have not agreed to
- They think you are taking too long to carry out a task/assignment
- Sometimes there might be a “personality clash”
Remedy the situation
The first stage is to make sure that you have a solid and reliable engagement letter. It is essential that you always issue an engagement letter before you undertake any work. It will establish what is expected and from who, such as:
- The nature of the work to be performed
- The amount of your fees and when they are payable
- Your obligations under the anti-money laundering rules
- When you can expect to receive information from the client
- When they can expect you to complete the work
- How and when they can make a complaint
This is a great starting point and will give both parties clarity, however, don’t just assume that the client has read and understood the letter. Go through it with them and explain anything that might be unclear to them.
In my experience a large proportion of misunderstandings can be resolved with reference to the engagement letter. In fact if things go badly wrong and a claim is made on your professional indemnity insurance, the engagement letter is the first thing that the insurer will want to see. In this worst-case scenario, where the client does want to make a claim, the insurer will work with you to help to guide you through the dispute process.
So what are some of the most common challenges you’ll experience with a difficult client?
The client challenges your fee
First, refer them to your engagement letter. Often, this alone will do the trick as there might be a delay in agreeing the fees and the actual work being performed. Also, sometimes the client will simply have forgotten what had been agreed to. If the disagreement is about how long you have taken and you are charging a higher fee, you need to explain why it took longer than usual.
The client thinks you’re taking too long
There may be times when something takes longer than usual, for reasons outside of your control, such as added complications, additional queries to solve, or maybe a seasonal increase in transactions. This will be a case of tactfully explaining to the client the reason why it is taking longer and making sure that you keep them updated at all times. Let the client know in advance if the work will take longer due to these complications and make them aware of what the additional costs will be.
The client challenges the quality of your work
A client will sometimes use this as an excuse to try to avoid paying your fee. You will need to question the client as to why they are dissatisfied, ask them for specific examples and try to work with them to rectify the dispute. It may be a case of them not understanding the nature of the task. In this case try to clarify as much as possible.
The client has unreasonable deadlines
This will sometimes happen with disorganised clients. They will habitually leave things to the last minute and still expect you to get the work done on time. In this case, again you should refer them to the engagement letter.
You should then tactfully point out that you might not be able to get the work done in time due to other work that preceded theirs.
Alternatively your client may be late because they have had some problems with their business, which meant they couldn’t access the required information in time. You will need to manage their expectations in this situation. If you can get it done, without affecting other clients, then you can try to do this. If not, be honest and tell them when you will get it completed.
The client expects 24/7 service
This is a bit of a judgement call. Some bookkeepers and accountants don’t mind this, however if you have specific hours of business, make sure that this is clear on your documentation and discussions with the client. You will also need to consider how you want to approach any “emergency” calls. Stipulate this in your initial conversation with the client and be clear about your business hours and emergency call procedure.
You have a “personality clash”
There will be occasions when you just don’t get on with each other for various reasons. Hopefully, this will be rare, however, if it does occur, it might be that you could try to modify your approach or behaviour, to make the business relationship work. If this is unsuccessful, you may need to consider not working together.
So, what do you do if we try some of the above, but to no avail and you really can’t agree a way forward?
On some occasions, when all else fails, the only alternative is to agree to part ways and walk away from the client/assignment. This should be done in a systematic and professional way. Here are some pointers:
At all times, you should avoid losing your temper or getting too emotional. Avoid trying to find someone to blame. Calmly explain why you have come to this decision and what any implications might be.
If possible try to suggest some alternative means of the client achieving what they need
Issue a dis-engagement letter
Similar to the engagement letter, a dis-engagement letter details the terms for parting company and it should include the following:
- Summary of the service(s) that will be terminated
- Current status – shows what is still outstanding and when
- Respective responsibilities
- Retention of records
- Any outstanding fees
- Confirmation that you have informed HMRC that you are no longer acting for the client (if applicable)
Agree to work with your successor
It is important and professional to work with your successor, for a smooth handover of information. Make sure you let them have any necessary information in as timely a manner as possible, to ensure that there is as little break of service as possible.
Whilst it is always unfortunate when a breakdown of a business relationship takes place, it is important to remember that this is all part of business life – these things happen. Don’t take it personally, be professional at all times and move on – concentrate on keeping all of your remaining clients happy.
Henry Cooper FMAAT was AAT's 32nd President.