Client relations are not always a comfortable part of a firm’s business for some accountants. At one end of the scale, if you steer wrong with your accounts receivable you can alienate a client. But on the other end of the scale if you’re too eager to please you can end up losing your firm money if clients get the idea that they can push you around when it comes to paying you their fees.
So here are some hints that should help you find the balance between keeping your clients happy and keeping your accounts receivables rolling in on time.
Have the right person on the job
If you’re big enough to have other people working on your collections, make sure you have someone who is good at such interactions doing the job. This is not a task for just anyone. It can potentially take just one bad conversation for you to not only lose a client, but for that client to spread their displeasure to other existing and potential clients, creating an avalanche of negativity towards your firm.
The added bonus with finding someone who is gifted at handling delicate conversations is that you can watch them work their magic in order to gain a better understanding of how to deal with such situations on your own.
Don’t set the problem aside
It may be tempting to see dues as being easily set aside, especially when your firm is flush. You might even be tempted to think that it will improve your overall client relations because it will make it seem like you’re easy-going and willing to help out clients who are down on their luck.
The problem with using your fees as the font of your willingness to help out is that what was considered a one-time act of generosity from your point of view may quickly become the expected from your clients. If that occurs you’ll be having awkward conversation every month instead of the one time when you could have nipped this all in the bud.
If you do have clients that are having a difficult time, find another way to help them out aside from giving them breaks on their dues. You could, for example, give them a free additional service that they haven’t used before that will help them get back on track. This has an added benefit in that, once they are doing better, they’ll credit that free service with being a big part of their new stability and will want to pay for it in the future.
Dig deeper into the numbers
The best way to avoid having difficult conversations about accounts receivable is to make sure your clients aren’t in a position where they need to ask for a break.
(Keep in mind that you may run across clients who are going to try to skate on fees no matter how well they are doing, just because they’re the type of people who are always looking for an angle. You’ll hopefully get your firm to the point where you can filter out these D-list troublemakers.)
You can help keep your clients stay financially healthy by paying attention to their numbers beyond the services they’ve asked for. When red flags start to pop up, you can swoop in like a hero to get their business back on track, which in turn keeps them in a position to pay you on time.
This is also a good move for your firm’s growth because even though it is additional work for you in the beginning of your relationship, you’re establishing yourself as a financial authority, and even a partner, in the welfare of your client’s business. The more of an authority you are, and the more red flags you help the client avoid, the more likely they are to come to you for future paid services.
Put a plan in place
Workflows are your friend when it comes to uncomfortable situations. You can have a set plan for when you initially ask for fee payments, for reminders about past-date fees, the conversations you’ll have on the phone if you have to call up a client that owes you, and so on.
Laying out these processes for your client to see when you first start your relationship can take the sting out of having to send them reminders or when you have to have phone conversations. They’ll recognize that it’s not personal, but rather that it’s your payment collection system at work, and that can help a great deal when it comes to diffusing the situation.