351 The EASY Way to Fire Accounting Clients

Sat time of year. The leaves are changing, getting past the deadlines. You smell that in the air? Smells like burning. Smells like a bunch of clients getting fired. Or at least it should. And this is quite possibly the very worst part of running an accounting firm is being like, I really gotta fire that client. And then talking yourself into not firing that client, and then that client being on the list another year, keeping you from being able to have the time and the bandwidth to go out and find a better client. Genuinely, the speed at which you churn out non optimal clients impacts the speed at which you can bring in optimal clients. Because we end up too busy. We're at capacity. You got to do X, Y, Z. You got to manage the team. You got to build that system. You got to make that phone call instead of doing the thing that could bring in that next 1.5x client who will pay you more. But what if. What if there was, hmm? What if there's a better way to fire those clients, huh? Like through a partnership with a trusted firm? What if you worked super closely with that firm and there was actually greater fluidity and how we could move clients between firms so that we didn't feel guilty every time we had to, quote, unquote, fire a client. That's what we're talking about today. Come on in. It's big brain time. Okay, Big idea here, gang. Not so much an idea, not anything like that I'm sure somebody hasn't thought about before. But I am super convinced that greater fluidity of clients between firms will lead to better firms. For the reason that I just dug into. Because the rate at which you're willing to move clients on dictates the rate at which you get back the capacity to go after the better clients. The reason we don't go after better clients is because we're at capacity. And oftentimes we close those barn doors and we say, no, we're so good that we. We can't do any more work. Why would I need clients? Why would I market? I'm at capacity. Because everybody needs better clients. The solution to all of our pains are better clients who will pay more for the same work. And the only way we get that capacity back is by sending some of those old clients out to pasture. And that's hard. I get it. A bunch of reasons. Personal relationships. Maybe they were your very first clients. Maybe you've been hiring like heck to cover up and avoid the inevitable where you know that you have to get rid of them. But if you had a firm that you loved where you could, like, kind of reframe this conversation and be like, okay, these are C and D clients for me. But Timmy, Little Timmy, that just. He's got his firm going now, man. Little Timmy's the best. I see myself in little Timmy. Little Timmy's gonna be so successful one day, and I wanna see him succeed. What's the best thing? What's the ultimate gift I could give little Timmy? These stinkers at the bottom of my client list. Because my stinkers, they're. Little Timmy's A clients. They really are. Like, I say that jokingly, but. But they absolutely are. We are all in an. In an ecosystem, part of the same food chain where there's firms above you. I know you're the best, but there's firms out there above you whose C and D clients, they're like, we are so done with them. We are so above them. Their C and D clients would be, hell yeah, A, like, A plus clients for you. You know, the clients where you put a total YOLO price on the proposal and it's like the highest tier and you're like, well, they're never going to say. And then it comes through and you're like, what the Holy geez. You mean somebody's willing to pay this? Those people right now, they're somebody else's CMD clients. And if we had greater fluidity between firms, I think it benefits everybody. Or at least it accelerates the reinvention of your firm, which I think is what most of us need if we're in a place where we're not happy and feeling overworked. Ultimately, you solve that by building a better client roster. Means people have to go to make room for better people. And before that, for you to have the bandwidth to think about how to get those better people. So what's step one here? Step one is figuring out how to get those stinkers off your list. And that means step 1A is finding. Finding your little Timmy. It might be a little Timmy, might be a little Tommy, might be a little Tina. Because not every client you have will be a great fit for somebody else. But just to give you, like, some thoughts on how. What are tactful ways to approach this, Because I've been having some conversations about this where it's like, this could also be super scummy and people could just start soliciting other folks to, like, get their old, old hand me downs. And you don't want it to be that. I think if I am the giver of the clients, I see no problem. And Reaching out to somebody that I know to try to learn more about them, to see if these clients could be a fit for them. I think going the other way, going upstream, it feels a little more scummy. Feels like a little more of an ask. It feels like I'm soliciting them to say, like, hey, if you ever have any clients you need to get rid of, send them on down to me. That feels a little weird. So I wouldn't try to be that guy. But at literally every stage in my firm running and, like, from the moment you start your firm to the moment you're at capacity for the first time, and this may be at 10 grand in revenue, like, in the beginning, you're giving everything away, right? So it is a extremely small window of time where you shouldn't be firing clients. So. So virtually every firm except for the itty bitty is beginning, starting outside hustle firms should be actively firing clients. Probably not even just once a year, probably even more than that. And like, these clients ultimately can. Can be the quicksand that keeps us from developing as quickly as we'd like to because we're not willing to move through them. And this may sound, like, cavalier and savage, like, do you even build relationships with these people? What do you mean? I do, but I don't associate my personal relationships with these clients with my business relationship. I've fired all sorts of clients and, like, still maintain a personal relationship with them. There were people that I really liked. There were people that I didn't ultimately like what my business is trying to do. I. I don't want that to be framed, like, in a personal way with my client. Either we're a fit or we're not. Like, either I'm building a machine that's the best machine for them, or I'm not. And if I just. If I cut them loose with no plan, I wouldn't feel bad about that. If I can point at this other machine over here, little Timmy's machine, if I can say, like, hey, we're going in this direction, which isn't going to be great for you, but I absolutely love this other firm that is. Feels super suited for you, I've got no problem making that connection, honestly. And I, like, if it's me, I'm not even going to make that firm pay for it. Like, that's just. I don't know, maybe that's just me trying to give back. But if you get stuck on, like, well, I have to find the right person who will pay me for this book of Business. I think that totally misses the point because the biggest opportunity is for you, the bandwidth you just got back and now what you can do with it. So if it's me, man, like I wish I had the network then that I have now because I got a big old list of people in my head who I know are in different stages. I don't know that I know enough to say that they would be able to like handle my clients. Well, I can. I, I know that I like them and that I think they're probably in a stage where my C and D clients would be their A clients. And so if that's me, what I probably do is I probably put a couple messages out and be like, hey, just letting you know, like I'm, I'm getting rid of some clients and I remembered that you mentioned this or that or I saw you say this or that. Maybe you've seen them talking online, maybe you've chatted with them in person or on a zoom or something like that. But I'd send them a message along those lines and just be like, I'm moving these clients along. They could potentially be, be a fit for you. I just wanted to ask at this stage if you want them to pay for those clients, like be as upfront with that as possible. Don't go through this whole process and then at the end say tada, I'm going to charge you this. Because the total a hole version of this is the one that's just shopping their clients around trying to find whoever will pay them the most, send them to the right home, like this is ultimately going to benefit you more than anybody else because you know how to have the bandwidth to go get better work. I'm going to feel best if I'm sending it to the firm where I truly believe like my clients will have the most success. That's not mutually exclusive with them giving me money for them. Like that doesn't mean that you can't have both of those things. But the going too far the other end is just shopping those clients around. Like I wouldn't do that because I do actually care about those clients. But I'm going to send probably a few of those messages and then next step's probably going to be chatting with them a little more to get an understanding of like what are your services right now? What is your normal client makeup? Would these actually be a good fit for you? If my process for doing tax returns or doing month end closes is abcd, how similar is that going to be to their process for abcd and it doesn't have to match exactly. But if they're doing something completely different, if they're like, we're only interested in tax planning clients, but for me these are just a bunch of one year tax prep. Or if their bookkeeping practice is like, we, we only work with folks who like, we're doing monthly kind of CFO services for, and you're just kind of doing like quarterly bookkeeping. Like, you got to make sure that those things can line up and it's actually a good fit. And then you ship them off, you send them packing. But doesn't have to be mean like that. I think the whole framing of like firing I think makes it feel maybe more dramatic than it needs to. Ultimately, folks don't want to have to go shop for an accountant. And, and a glowing recommendation from you is probably the best recommendation they could get. Because nobody's as intimately aware of their needs as you are doesn't mean that a hundred percent of them will go to that next provider. And that's fine. The main thing is I'm getting them off of my client list and I can still sleep at night. That's my goal. Now in the course of like sending those messages and having some conversations with people, I'm going to find folks that, oh, after all, like, they actually weren't a fit. Or I may find a couple that are, or I may get a lead down the road where it's like, you're not great for me. But I remember that one thing that other person said, you would be great for them. That's totally a connection worth making. And then when you send those clients off, it's, it's worth having a feedback loop there. Like if, if you can, it would be really valuable to know like, did those people have a good experience, how smooth was the transition so that the next time you move clients along, like, you have even greater faith in that firm. Honestly, just having five or 10 of those conversations completely changes your outlook on renewal season. Because as soon as you go down that client list, you have like a couple here that we're definitely going to fire. But then every year you have a growing list that are like, yeah, these ones almost certainly aren't where we're headed, but I'm probably going to hang on to them for now. Like kind of those fringe ones, right? But then when you get into the next year, what happens? You get more new work than you're expecting, you underestimate your capacity, and you're right back in square one. And you're like running hard as heck, like again. And you're like, is there ever any version of this scenario where I have some free time where I have the bandwidth to like go out and do new stuff and talk to new people and try to find more valuable customers? And it's not until you more drastically reduce that list that you'll actually have that bandwidth. Because we will perpetually underestimate the capacity that we have. And I think a better relationship here with another firm is what solves for those maybes. Those maybes that probably should be. Yes, let's, let's move them along now as you are meeting people online and folks are getting more connected in communities and, and firms are talking to each other more than ever before and going to conferences, this, I mean there's a whole bunch of benefits to making these connections. But if this leads to you more aggressively being able to move those clients along so that you can get into the work that you want to be doing more of, double down on your A clients and find more A clients that makes like all of those investments pay off. Going to conferences, like hanging out in communities, man, like that is. There is. There's no bigger thing for your firm than building a better client roster. And if just knowing some other firms that you could trust and refer things to where you're now giving them a clients for them, like we're trading the pain and the fear of letting a client down when with instead the feel good of dropping an A client in another accountant's lap. That's pretty nice. Now there's still a degree of letting that person down that's hard, but it's much, much less than if you just fire them and leave them to go figure it out for themselves. There's also like smart ways to do this where like you do a video with that other person and they can see the good vibes and like they get that as you're delivering the news and you still, you still need to have like an actual conversation with the client on the other side. But there's a way that this medicine can go down that is, that is much, much smoother than just firing someone. But I just think like, I'm so convicted that greater fluidity between all of the firms that are talking to each other and hanging out now will lead to just better outcomes for everyone, faster growth into a clients of all types. I mean, if there was a firm that would feed you a clients right now, wouldn't you be stoked? Of course you would. That's why you need to be getting rid of your C and D clients. Same rationale. The more we can do that the more we're going to help everybody else out. Just seems like a no brainer to me. Your renewal season is going to make your next year and I know renewals are scary for so many reasons and we're probably already fearing having those conversations. This is a great way to make it better to seek out those referral relationships and pay it forward in many ways while like not leaving those clients in alerts. Right? You got any tips on how to like find those people or or where you've found good referral relationships in the past? Drop a note down in the comments. Don't drop a note saying I'm looking for clients. I don't want that vibe here. But if you got any wisdom on how you have found those folks that you can refer clients to, would love to hear that because the more we do this the more it helps out everybody. Right? That's all I got today. Thank you for coming and hanging.