Time to Cut Ties?
Source: AICPA CPA Insider
The following includes excerpts, reproduced with permission, from an article published by CAMICO Mutual Insurance Company.
A proactive attitude that treats disengaging as a practice management tool means, in part, putting into place a system that allows you to re-evaluate your client base on a regular basis, be it annually or semi-annually.
The following checklist of warning signs is intended to help you identify clients who are candidates for disengagement:
• Difficult, manipulative or uncooperative client behavior
• Unresolved client complaints about the service provided
• Client complaints about fees being too high
• Consistently delinquent payment
• Clients suffering business or personal hardships
• Personality conflicts between the client and the firm
• Unseemly, unethical or fraudulent activity
• Changes in the client's business
• Changes in your firm's partners, staff or goals
• Conflicts of interest
Dealing right away with problems might save the relationship and help you avoid disengagement, or it may confirm your thought that it is time to sever the relationship.
How to Disengage
When you decide to disengage, terminate the relationship professionally and formally, in writing. Your disengagement letter should always contain clear statements, a description of your work, and a list of any due dates or filings. While it might not be possible in urgent situations, try to provide ample lead time before a client's deadlines to better protect yourself.
Even the most proactive evaluation plans will sometimes be thwarted and there will be a need to disengage immediately due to a critical situation, such as the discovery of fraudulent activity. However, by using a procedure that enables you to regularly monitor your clients, you can better protect yourself and your business from having situations escalate into crises calling for disengagement.
For the complete article, read “Warning Signs That It May Be Time to Disengage.”
From AICPA CPA Insider, June 6, 2011, www.CPA2biz.com.