Capstone Marketing Blog, Marketing

CPAs: Say No to New Clients

The 2013 PCPS CPA Firm Top Issues Survey indicates that CPA firms are focused on bringing in new clients. What better time of the year than tax season – when everyone is focused on their tax liability and financial state – to obtain new business?

Here is your challenge: Say “No” to new clients unless you have the following items in place.

1.  Client acceptance criteria. Our SevenKeys to Successful CPA Firm Management research indicates that the Leaders are five times more likely to fire clients that don’t fit their target than the Laggards. This is a powerful statistic since bad clients have an impact on your profits, productivity, and employee retention.

Imagine having to fire fewer clients because you are more selective in the new clients you accept? Criteria to consider include:

  • The reason why the business/person is looking for a new CPA firm
  • Annual revenue of the business
  • Services needed
  • Fee
  • Growth potential
  • Referral potential
  • Profitability/realization
  • Job risk/complexity
  • Timing of the work
  • Satisfaction/enjoyment working with clients in specific industries

Then, you need a process to review these criteria and decide whether or not to accept the new business. Depending upon the size of your CPA firm this could be led by your managing partner, partner-in-charge of marketing, chief operating officer, executive committee, or a separate task force.

2.  Capacity. With the 2013 tax season referred to as the “worst tax season ever” CPAs should move cautiously when accepting new business in the next couple of months. Be sure that your firm has the capacity for your current clients and only the most valuable new clients. You don’t want to jeopardize your service delivery, client satisfaction or employee morale by accepting questionable new business.

3.  Evaluation of tax season performance. When you review your CPA firm’s tax season statistics, e.g., gross revenue, net revenue, effective billing rates, and realization, track this information for the new clients obtained during tax season. This will provide a learning opportunity for everyone.

What are your thoughts? Let me know in the comments section below.

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