Are Your Clients Right for You?
Source: CPA Trendlines
The following blog post by Jean Caragher is reproduced in its entirety with permission.
Not every prospect will be an appropriate client for your firm. Consider more than whether they are breathing when evaluating prospective clients, such as your fee, potential realization, the prospects' ability to pay, year-end, growth potential, risk, leads expected from the prospects and opportunities to cross-sell. By focusing on your best new client opportunities, your client retention tactics will also focus on your best clients.
In fact, client acceptance and client retention were the two very reasons why Norfolk, Va.-based CPA firm Wall, Einhorn & Chernitzer, P.C., formed its Revenue Enhancement Committee in 2007. The REC is still active today:
- Implementing client acceptance criteria.
- Strategizing pricing options for clients and new business prospects.
- Evaluating the lowest realization clients (largest write-offs) for each partner and manager, and brainstorming ideas to improve work efficiency and job profitability.
- Reviewing Client Evaluation Forms (and process) for use by managers to identify problem clients and solutions.
- Reviewing WIP adjustments.
The REC's efforts have resulted in improved realization. This is attributable to REC-initiated factors such as better pricing, more discussions with clients regarding preparation they can complete to make their work more efficient, more up-front discussions with clients about fees and better management of fees incurred while work is ongoing.
The benefits of the REC's efforts also include:
- More input from managers on client billing and about clients, in general.
- Many procedural features that improved WEC's own quality control.
- Identifying additional service opportunities that were communicated to clients, resulting in better client service and extra fees.
For the original post, read “How to Get Choosy with New Clients.”
From CPA Trendlines, http://cpatrendlines.com, May 21, 2011.