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Client Experience

Managing client expectations for accountants

Thomson Reuters Tax & Accounting  

· 6 minute read

Thomson Reuters Tax & Accounting  

· 6 minute read

Client relationships, like any relationship in life, can at times be challenging. Miscommunication, unrealistic expectations, and personality differences are bound to surface on occasion, but establishing boundaries early on can help accountants avoid these problems and better manage client expectations. 

When both accounting clients and staff are on the same page, it helps strengthen client loyalty, drive profitability, and reduce stress. 

To help accountants better manage client expectations during tax season and beyond, this article will provide actionable insights and will explore such areas as why it is important, how to set realistic expectations, and how to approach difficult clients. 

Why is it important to manage client expectations?

Setting boundaries and managing client expectations as early on as possible is essential. Why? It avoids miscommunication and stress for both clients and staff down the line. Unfortunately, strained client relationships not only impact clients but can also hinder a firm’s job performance and profitability, and negatively impact staff morale. 

At the core of a strong relationship is good communication and transparency. The relationship accountants have with their clients is no different. As their most trusted advisor, maintaining transparency is critical, even when delivering unfavorable news like they owe more taxes than expected or a tax law just passed that will negatively impact their filing. In fact, clients will appreciate the transparency. 

People feel less anxious when they are kept informed and not caught off guard by surprises. Proactively communicating with clients can help ease their anxiety and preemptively answer any questions they may have. This, in turn, leads to less stress for staff and helps set the firm up for success. 

Managing client expectations: What to expect

Not every client relationship will be easy, so it is important to anticipate some pushback or difficulties. Knowing what to expect can help staff better navigate issues should they arise. 

First off, there are behaviors that are indicative of a tough client. Knowing the red flags to watch for can be helpful. Some common behaviors that can be associated with difficult clients include: 

  • They consistently try to get “something for nothing.” These are the clients who will seek services that extend beyond the scope of service, but they don’t want to pay extra for those services. 
  • They refuse to follow firm policies and procedures. These clients will look to make exceptions to your firm’s policies and procedures. This, however, can be a drain on staff time and resources. 
  • They don’t view you as a partner. The strongest client relationships develop when your clients view you as their partner and trusted advisor. Those clients who don’t are less likely to respect your professional advice and follow policies and procedures. 

Client classification

It may be helpful to classify clients. Client classification can be a way to identify those clients who should pay more for the extra attention and work they require. It can also be a way for firms to weed out tough clients and sever ties, if necessary. For example, firms may use a scale of 1 to 5 to rate clients (1 being the toughest clients) or grades A, B, C, and D. 

Questions to ask yourself: 

  • How much time does the client spend with the firm? 
  • How many services do they currently utilize? 
  • Do they pay the bills on time? 
  • Do they dispute or argue over fees? 
  • Does the firm make a good recovery on the fees? 
  • Can the firm add further value to their business? 

How do you set realistic expectations with accounting clients?

One of the most effective ways to set realistic expectations is to clearly define upfront both the scope of service and scope of the client relationship in an engagement letter. 

The scope of service: This clearly describes which services are included and which are not. Those services offered by the firm, but not included within the scope agreement, are out of scope. Those out-of-scope services are to be listed as additional fees. It is also critical to be clear about the payment schedule. 

The scope of the client relationship: This scope outlines how many meetings the firm has with the client each year, when those meetings take place, and what’s the best way to work together (i.e., portal, email, etc.). Also, don’t be afraid to let the client outline their expectations. Relationships are a two-way street, and when the expectations of both the firm and client are clearly understood, they are more likely to be followed. 

Unfortunately, clients will too often try to push the boundaries of the accountant/client relationship if the scope isn’t clearly defined upfront. This can be especially true during the busy tax season when client questions and concerns may be at their peak. When accountants find they are getting overloaded with work from a client, but are not being properly compensated, it is likely that a lack of client scope is to blame. 

Lack of client scope not only hinders a firm’s profitability and ability to provide good customer service, it also negatively impacts the work-life balance of staff. 

How should accountants communicate with clients?

Clearly defining how, and even when, accountants will communicate with clients is essential in helping to manage expectations.  

Clients may prefer to use email for communication, which may be fine when it does not contain sensitive client information. However, they should understand the importance of using a two-way, secure private portal when submitting sensitive information. 

What about personal cell phones? In today’s tech-driven society, it can be easy for professionals to feel as though they are “always on.” Therefore, discretion should be used when it comes to calls on the personal cell phone. To help avoid burnout, it is vital for professionals to prioritize their mental wellbeing and disconnect when not in the office. So personal cell phone calls may be overstepping a healthy work/life balance. 

How long should an accountant keep client records? 

It is critical that firms maintain a well-crafted, written document retention policy. This not only helps address any client questions and concerns, but also helps drive firm efficiencies and could assist the firm in the defense of a claim. 

As outlined by the AICPA, general document retention guidelines for client records include, but are not limited to: 

  • Tax returns and workpapers (including electronic filing authorizations and any such documentation to support virtual currency transactions) – 7 years 
  • Permanent files for current clients – Permanent 
  • Permanent files for former clients – 7 years 

It is also important to clearly explain how the firm handles clients’ confidential financial information to help alleviate their privacy concerns. Be sure to also consider the proper destruction of documents and communicate those methods with clients. 

Handling client priorities

Take action today to ensure your firm is establishing boundaries early on to better manage client expectations. 

For further guidance and advisory needs, turn to a trusted source like Thomson Reuters during tax season and beyond. Learn more about how other accountants handled clients’ priorities in 2023 with the Tax Professionals Survey Report. 

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