Tax & Accounting Blog

It’s Not You, It’s Us: How to Spot a Problem Client

Accounting Firms, Business Practices July 3, 2013

Any business is good business, right? Well, maybe. What about those difficult clients that drain resources, destroy morale, and eat into profits? Here are five classic types of toxic clients. If you recognize the warning signs, it may be time to sever ties.

  • The nickel-and-dimer. Anyone who questions your rates repeatedly or complains about them doesn’t value your expertise. Odds are, you’ll never win him over; his real goal is to obtain unrealistic discounts or free services.
  • The time-monopolizer. This client expects you to be on call for him 24/7. He drags meetings out past allotted cut-off times and gets agitated if his calls and emails aren’t returned immediately.
  • The time-waster. Chronically disorganized, he reschedules meetings and conference calls at the last minute, joins them late, or forgets about them altogether. He fails to produce materials on time and drags his feet on approvals. Most likely, he expects you make up for his missed deadlines with overnight turnarounds.
  • The browbeater. Anyone who is abusive, condescending, or excessively critical in person, on the phone, or in emails can wreak havoc on your team’s spirit. Even if you do manage to please him, the emotional toll on your staff may well outweigh the profits.
  • The fly-by-nighter. If a client’s business seems shady or unstable, or if his line of work violates your principles, you’ll never feel comfortable working with him. You may end up doing unpaid work, and, worse, you may find yourself implicated in any legal trouble he encounters.

If you decide to end a relationship with a client, first discuss it with your staff and ideally, your legal advisors. Then explain politely that your organization feels that his needs would be better served elsewhere. Avoid criticizing him. Follow up by sending a letter reiterating that the relationship is severed. Retain all client documents.

Have you ever fired a client? How did you handle it, and is there anything you would have done differently? Share your thoughts with us.