WHY YOU NEED
TO TURN AWAY
10% OF NEW
CLIENTS
HOW TO FOCUS ON
THE RIGHT CLIENTS FOR
YOUR FIRM’S
LONGTERM SUCCESS
INTRODUCTION
There’s a wealth of information available to help small businesses
choose the right accountant. But there is little out there for
accountants looking to choose the right clients for their practice.
Having the right clients in your portfolio is crucial. Whether they’re
good or bad has a direct impact on the value of your business and
your own quality of life. And the reality is that around 10% of the
potential clients that walk in through the door will be the bad kind –
the ones you should be looking to lose, come year-end.
In this eBook, we’ll uncover:
The impact clients have on the effectiveness of your firm –
and its value as a business.
What specific effects a ‘bad client’ can actually have on your
team and your business.
How to take a more selective approach when choosing your
clients.
Signs to look for when profiling and selecting new clients –
and how to spot the diamonds among the coal.
In short, we’ll show you how you can be smarter in your client
selection process. And how this secures a better outlook for the
value of your firm in the long-term and your own future peace of
mind.
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1.
WHY WORKING WITH THE RIGHT
CLIENTS IMPACTS ON THE VALUE OF
YOUR FIRM
You might be thinking ‘But surely any client is a good client, no?’.
The realistic answer is that some businesses will be a dream to
work for, and others will be a drain on your time and resources and
(ultimately) end up costing you money.
And if the time-intensive clients start to outweigh the good clients,
that has a direct impact on the value of your firm. If the practice is
constantly firefighting, chasing up late work and dealing with
unnecessary client queries, that can undermine your brand and
have a negative impact on bringing in the good clients.
So how do good clients increase the value of your firm?
CLEAR PROCESSES CREATE VALUE
The more streamlined and organised you are as a firm, the more it’s
value increases. It instills confidence in any prospective buyer that
the company can function effectively without your involvement.
Make sure your processes are clear, well-defined and as
streamlined as possible.
Define exactly what’s expected of the client, and what you’ll
deliver as a firm.
Detail all of this in your engagement letter and get the client to
review and sign this off.
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ONBOARD YOUR WAY TO A CONSISTENT REVENUE
STREAM
Engaged, informed clients appreciate the service your processes
provide, increasing their likelihood of sticking with your firm. And a
study from Bain & Company found that increasing client retention by
5% can boost profits by 25% to 95%.
Have a detailed onboarding process for new clients.
Educate clients in the basics of how their accounts will work.
Give hands-on training so they’re using their financial systems
effectively.
APPLY A ‘CLIENT ACCEPTANCE POLICY’
One proactive way to sort the good from the bad is to have a
client acceptance policy in place.
Cornerstone Group, a cloud-based bookkeeping practice from
Sydney, Australia, have done just this. Their CEO, Tim Hoopman,
has even gone as far as putting a 20% financial penalty in place
for clients that aren’t yet in the cloud, to cover the extra work
needed to get clients’ data into their cloud systems.
By defining the conditions they need a new client to meet, they’ve
managed to filter and select the clients that are most likely to
support the long-term profitability and growth of the firm – and
who share the forwarding-thinking mindset of a cloud practice.
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2.
WHAT MAKES A BAD CLIENT?
Bad clients can be incredibly disruptive for your firm. In an ideal
world, it’s best to avoid them in the first place. But if you’ve
already taken a client on, how do you spot if they’re good client,
or one to lose at the first opportunity?
?
You can never be 100% sure if a business owner will turn out to
be a keeper, or one to avoid, but here’s our short list of the four
key warning signs to look out for.
?
?
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?
THE ABSENTEE
What they do:
Make it very difficult to get in touch.
Don’t respond to your requests for
information.
Don’t pay your invoices on time.
The impact for your firm:
Unanswered questions when you can’t
make contact halt the process.
Time wasted chasing up important
documents.
THE SLOW LEARNER
What they do:
Misunderstand the valuable information
you provide them.
Never remember what you’ve previously
explained.
The impact for your firm:
Time spent explaining everything in
great detail - multiple times…
A big hole in your monthly cash flow.
THE HANDHOLDER
What they do:
Won’t fully adopt any new technology
or tools.
Resists your efforts to help them
become efficient.
The impact for your firm:
Poor integration with your in-house
systems and processes.
More time spent training them in the
most basic work.
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THE PENNY PINCHER
What they do:
Don’t fully appreciate the value you
deliver.
Overly concerned about pricing and
resisting every additional service.
The impact for your firm:
They avoid time talking to you and you
never have valuable conversations
An ongoing battle around your pricing
and fees.
No chance to build a more valuable
relationship.
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THE CONCLUSION  YOU’RE WASTING TIME
ON THE WRONG CLIENTS
All of these four client types are detrimental to your business. And
they all result in significant amounts of wasted time and energy –
not to mention frayed tempers.
So, when you see the warning signs, be prepared to lose these
problem clients. And, in doing so, free up time and resources to
focus on the clients that are worth your time.
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3.
HOW TO SPOT A GOOD CLIENT
The ‘right client’ will be different for every firm. But there are some
key signs to keep your eyes open for when you’re testing out a
prospect, or reviewing your existing client base.
It’s also really important to meet clients in person before you take
them on – or at least speak to them on the phone or over Skype etc.
It’s the only sure-fire way to judge if a working relationship will be
beneficial for both of you.
Here are five important signs that you’ve found a good client.
Personality – It may seem obvious, but you’ve got to like the
personality of your client. You’ll be working closely together,
so a good personal relationship will be a huge bonus.
Flexible – They’re prepared to adopt your way of doing
things (your processes) and to go through your training
processes to learn more.
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Tech-savvy – If you’re a cloud practice, you need clients
who can keep up. Apps like Receipt Bank, GoCardless or
Crunchboards can save so much time and effort – make
sure they’re open to learning. Positive signs to look for
include:
Using a smartphone to manage their business
Familiarity with other cloud services like banking and
data storage
An up-to-date, professional website that shows they
value online presence
Appreciate value – They grasp the benefits of your
value-added services (whether it’s performance analysis, or
strategic business planning) and are prepared to pay a higher
fee that reflects the value you deliver.
Decisive and aware – They know what they want from the
working relationship. And they know precisely where your
industry knowledge, or niche specialism, can help them
overcome their own challenges and build an effective
partnership with your firm.
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CONCLUSION
YOUR FIRM DESERVES THE RIGHT CLIENTS
Client selection is essential for the future prosperity of your firm.
Being picky about who you work with may seem
counter-intuitive, but having the right clients in your portfolio
really does pay off big time in the long run.
Understand the impact – Make sure you know exactly
how and why the wrong clients can drag you down. Your
bottom line is more important than accommodating
intransigent clients.
Be client aware – Always be on the look out for the
warning signs, and lose the worst 10% of your clients.
Make the right choice – Good clients are the foundation
of a strong practice. Know what makes a client great,
and focus your energies on the winners.
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Talk to a member of our team to find out how Receipt Bank can
help you build a more valuable practice with the right clients
REQUEST A CALLBACK
Email us at partners@receipt-bank.com
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