Practice Management Small Business

When and How to Fire a Client

Written by Nellie Akalp

Should you ever let a client go? Sometimes, perhaps surprisingly, the answer is “Yes.” Accountants, of all people, know that time equals money. So how do you know when it’s time to cut a client off? And how can you get out of the relationship without burning your bridges or earning a bad name for yourself in the industry? In this article, I’ll explain common situations in which you may need to fire a client, plus tactful ways for letting the client go while still maintaining your business’s good reputation in the accounting industry.

The Customer Is not Always Right

Perhaps you’ve been putting up with a troublesome client for a while now because you’re worried about making ends meet. Or maybe the client has been with your accounting firm from the beginning, and you don’t want to offend them. However, their business takes more of your time than it’s worth. When worries about a client start keeping you up at night, it’s time to make a change before the situation affects your bottom line.

Here are some reasons you should consider firing a client:

  • Excuses, excuses. Does this client always have an excuse for late payment — or worse, for not being able to pay their invoices at all?
  • Time suck. Are other parts of your business, including other clients, suffering because a certain client takes too much of your time?
  • El Cheapo. Does the client constantly complain about your prices and threaten to take their business elsewhere?
  • Manners-deprived. If your client is rude to you and your employees, or just unpleasant to work with in general, it may be time to say good-bye.

Confronting a Client

It’s important to assess exactly why you want to fire a client and find a way to explain the reason without insulting them. Here are some common reasons and approaches you can take.

  1. If a client needs too much handholding, they probably came to your business for personal service and still expect you to handle everything yourself — even if your business has grown. Before you fire this client, try bringing in a trusted employee to help with the client’s business. As the client gets more comfortable with the employee, you might be able to eventually hand the client off to your employee and still keep their business. Emphasize that while you don’t have the bandwidth to work solely on their account, you’re still on their team. If the client still insists on only working with you, you need to be honest. Explain that your business is growing and you’re having a tough time giving the client the personal attention they deserve. In order not to burn any bridges, try suggesting another accountant (or several accountants) you know of to handle their account. That way, you’re not leaving the client in the lurch.
  1. If payment is the issue, talk to the client honestly about their financial situation and suggest ways they can get back on track. If the client agrees to pay in advance, set up a monthly retainer or create a payment plan that works for both of you — offer to keep working with them. However, if the client avoids your calls and doesn’t respond to emails or letters, you should stop doing business with them immediately and let them know your relationship is terminated. Make sure you keep all correspondence from the relationship so that if you decide to go after the money you’re owed, you have proof that payment is warranted.
  2. If your business has grown beyond the price range the client can afford, give the client plenty of notice that you’re going to start charging them more for your services. You may be able to negotiate performing fewer services for the same overall price. Or, if your new prices are too high, the client will leave on their own. Once again, it’s a nice gesture to recommend another, more affordable accounting business they can turn to.

Weathering the Storm

No matter how you fire a client, there may be some negative aftereffects. Be helpful and honest, and be ready to defend your reasons if another client hears about the parting. Tact and consideration go a long way to preserve your reputation so that you can take on new business without fearing a backlash.

Have you ever had to terminate a client? Share how you did it in the comments.


Save pagePDF pageEmail pagePrint page

About the author

Nellie Akalp

Nellie Akalp is a passionate entrepreneur, small business advocate, and mother of four. She is the CEO of CorpNet.com, a trusted resource for Business Incorporation, LLC Filings, and Corporate Compliance Services in all 50 states. Nellie and her team recently launched a partner program for accountants, bookkeepers, CPAs, and other professionals to help them streamline the business incorporation and compliance process for their clients. More info at: CorpNet.com/Partners.

Leave a Comment