What to do when your client wants to leave

aat comment

The majority of the time, running an accountancy practice will be enjoyable and rewarding but now and again you may find that you lose a client or two, often for no apparent reason. Unfortunately that’s life and it will happen. The important thing is knowing exactly what to do when it does.

So here is a five point plan to help you cope when you do lose a client.


Don’t take it personally

You may find out about the loss of a client via a number of routes; a professional clearance letter from another accountant may arrive, the client may tell you, they may just stop paying you or they may just cease replying to your correspondence.

Whichever way you hear about the loss, don’t 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.

Act professionally

When you find out that a client is moving on, the best approach is to act professionally. Avoid getting into a heated debate with the client about their decision and whatever you do, do not tell them they are wrong even if you think this is the case.

If it isn’t obvious to you as to why they have decided to dispense with your services then do ask them, in a polite and non-confrontational way. You could start such a conversation by asking: “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?”.

As a goodwill gesture and to show there are no hard feelings about the client’s decision 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.

Professional Clearance letter

If your client has moved to another accountant then you may receive a professional clearance letter from the newly appointed accountant. Of course, it is not compulsory for them to send such a letter but qualified accountants with a Practising Certificate would usually be duty bound to issue one.

On receipt of the letter immediately acknowledge it and give timescales for when you will be able to respond to it. Of course trying to respond as quickly as possible is always the best approach; there is no point in having this hanging around on your to do list for longer than is necessary.

However before you do respond to it do make sure that you 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. Your files should support this with direct confirmation to you from the client to disclose, giving details of who the disclosure can be made to.

Finally, under no circumstances would it be appropriate to criticise the client in your response to the new accountant.  No matter what your relationship with the client may have been you will let yourself down if you actin  anything other than professionally in your response to the clearance letter.

Disengagement letter

Just as important as setting out your scope of work, obligations and terms of business at the start of an assignment, is making sure that you bring the appointment to a formal end so that all parties can be clear on their respective responsibilities once the relationship has terminated.

It is always useful to have a standard disengagement letter to hand which can be modified for the situation in hand. As a minimum the disengagement letter should state the date that your responsibilities cease and what happens to the client’s records.

Be specific about any pieces of work that you may have outstanding, for example if you perform payroll for the client 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

Of course, the loss of a client should not just be dismissed; the events leading up to the loss and any reasons given for the departure should be reviewed and reflected upon. Was there anything that could have been done differently to prevent the loss? What could you change to prevent this happening in the future?

Life is far from perfect and you cannot please all of the people all of the time; however we can all learn and improve no matter how long you may have been running your Accountancy Practice.

Having over 20 years of accounting and IT experience, in 2007 Elaine Clark (MAAT) gave up her blue chip past to launch CheapAccounting.co.uk. In 2009 Elaine capitalised on the rapid growth of the brand and developed the franchise arm of the business recruiting qualified accountants as franchisees to service the ever growing client base. 

Elaine Clark is the Managing Director of CheapAccounting.co.uk.

Related articles