How to manage awkward conversations with clients: The guide for accountants and bookkeepers

We’ve all had those awkward moments with clients. You know the ones, where they refuse to pay for out-of-scope work or you’re chasing them for late payments… again! Things can get super uncomfortable really fast.

The reality is that awkward client conversations can be… well, awkward, and as our State of client engagement report shows, just about every accountant and bookkeeper in the United States, Australia, and the United Kingdom experiences these on a regular basis. But most don’t have an effective strategy for dealing with these situations. Thankfully though, with the right tools and communication practices you can navigate these moments and start making things a whole lot easier for you and your clients.

In this article, we’ll dive into the top awkward conversations that accountants and bookkeepers struggle with the most – including the situations the ‘State of client engagement’ reveals to be among the most challenging: dealing with changes in scope of work, chasing down late payments and explaining errors.

 

We’ll also offer actionable steps and tools so you can approach these conversations with confidence and clarity.

Let’s dive in.
 

First-time client meetings can feel awkward. You’ve never met your client before, so it can take a while to gather your bearings and get a ‘feel’ for what they’re like.

A little preparation can help your discussion with first-time clients go smoothly and your relationship start out on the right foot. Consider the following tips:

Do your research. Equip yourself with information about the prospect, so you ask the right questions and mitigate the risk of any awkward silences. Before hopping on a call, check out their website, LinkedIn profile, and other relevant resources. That way you’ll have a better idea of who you’re dealing with and you can structure the discussion accordingly.

Take the time to listen. Invest the time upfront to understand and clearly scope their requirements. This is one of the most important steps in the client relationship. Spending the time gathering information about the scope of work and understanding their challenges will help set you up for success. It will also allow you to present a proposal back to them that accurately reflects the challenges they’re aiming to solve.

Nail your talking points. Prepare what you’re going to say in advance. Write down the key points that you want to bring up during your meeting. This could help you feel more confident when you’re talking to your new client.

You had a great discovery call and the client is keen to hear more. So, you start the relationship on the right foot. You use an industry vetted proposal and engagement letter template to ensure your client experience is engaging and professional right from the start, and make it easy for them to sign your proposal online.

Everything seems to be going according to plan. You’ve sent your proposal, but then you don’t hear back from them for hours – and the hours turn into days. Now, you’re left with the awkward task of following up.

Understand that this situation is extremely common. Industry data shows that almost 80 percent of ‘leads’ require follow-up communications. Normalizing this task will make it a whole lot less awkward for you to deal with. So, how can you do that?

Set expectations. It’s a good idea to lay the groundwork during your initial meeting with the client. Ask them the best time and method to follow-up with them after you’ve sent your proposal, and use that as guidance.

Craft a solid follow-up message. In your follow-up communications, reiterate the key talking points discussed during your meeting. Also, give a clear call-to-action for the client, to make it easy for them to move forward.

Automate your follow-up process. You can easily do this with Ignition’s proposal reminders feature. You can set the number of days to wait before sending an automated reminder and you can also select the number of reminders to send out.

You may occasionally get messages or calls from people who you’re unable to help. Maybe they’re not a good fit for your business or you’re too busy with your existing work. While it may seem counterintuitive to turn down business, you would be doing them a disservice if you took on their work and then couldn’t meet their needs.

You can turn down prospects respectfully by doing the following:

Be direct. Let them know that as much as you would like to help them, you simply can’t take on the work. Be honest and direct. Perhaps you lack the bandwidth, whatever the case, communicate it clearly to the prospect.

Refer them to someone else. If you know an accountant or bookkeeper who may be able to help them, let them know. Share the provider’s contact details (with their permission) or send an introductory email to both parties.

 

Out-of-scope project requests are incredibly common for accountants and bookkeepers. Our ‘State of client engagement’ report shows that 90 percent of accountants and bookkeepers surveyed in the US (74 percent in the UK; and 95 percent in Australia) experience potentially awkward client situations of clients not being billed for out-of-scope work.

What’s truly problematic is that out-of-scope work or ‘scope creep' has significant financial implications for accounting and bookkeeping businesses. In the United States, firms are losing, on average each year, $76,636 (in the UK, on average £69,957 each year; and in Australia, on average $103,778 each year) in unrecovered out-of-scope work.

When managing increases in the scope of client work, 43 percent of accountants and bookkeepers surveyed in the US (33 percent in the UK; and 35 percent in Australia) admit they just absorb the increased time and costs themselves.
 

Changes in the scope of work can and often do happen. Making sure you can charge and get paid for work that goes out-of-scope (aka scope creep) can be the challenging part. The key to managing an out-of-scope request is having processes and solutions firmly in place, so you feel confident about renegotiating any additional work or pushing back on your client’s request, if you need to.

Here’s how to go about it:

Set clear expectations. Don't start work without a signed engagement so you and your clients are on the same page about the deliverables and value from day one. Your engagement letter is your first line of defense against scope creep. It needs to clearly and unequivocally outline the scope of work, spell out what the scope includes and what it doesn’t include.

Anticipate change. Make provisions for out-of-scope work in your proposal to set expectations upfront that it will incur additional costs.

Communicate regularly. Regularly review and address any changes in scope with your client early on. If the scope changes, send your client a new letter of engagement that clearly outlines the revised scope and costs.

Be respectful but firm. When your client makes a request that isn’t covered by their agreement, politely (but firmly) address it with them immediately and confirm it in writing with a review or new engagement letter. That way, you'll be able to bill the client for the additional work and won’t feel like you have to absorb the increased time and costs into your business at some point in the future.

Discussing your fees can be awkward, but it’s something every accountant or bookkeeper must power through. After all, you can’t get paid if you don’t bring it up.

The issue of pricing is typically brought up during the discovery call or perhaps via email, before the proposal is sent out. To set clear expectations early on:

Mention pricing on your website. Consider adding a pricing section or messaging on your website, indicating your starting fee or price range for your packages. This sets expectations with those interested in your services and helps to ensure you’re having conversations with people who are willing and able to pay your rates.

Discuss pricing early on in your client relationship. “It can be particularly awkward when doing an initial estimate of fees. With new clients coming in, you sometimes have no idea how long it will take, until you really get under their hood.” says Dan Osborne, Director of CATS Accountants in Australia.

“A new client might have an expectation that completing a tax return is worth $300, but really it’s around $3,000 of work. Having that awkward conversation upfront stops a much more awkward conversation in two months’ time, when you send them a bill for $3,000,” says Dan Osborne.

Be direct. Mention your pricing in a plain and neutral tone and resist the urge to over-explain or justify your fees.

“Be upfront, open and unapologetic in your approach,” says Emma Crawford-Falekaono, Head of Accounting (EMEA) at Ignition. “Find your own communication style – some advisors find directly linking pricing to the outcomes and value a good way to ease the awkwardness. Some prefer to approach this with the confidence of having had these conversations multiple times before.”

Give your clients greater choice. When you’re preparing your proposal, provide a range of pricing options so clients can choose the one that suits their needs. They can then enter their payment details and sign your proposal – all in one place. This has the added benefit of helping to streamline your sales process.

The ‘late payments’ conversation is one of the most challenging client conversations you can have. Our ‘State of client engagement’ research shows that in the US, 94 percent of accountants and bookkeepers (95 percent in Australia; and 90 percent in the UK) say they experience awkward situations of chasing clients late payments

 

Marie Greene, Founder & CEO of Connected Accounting LLC in the United States, explains how having to continually chase clients down for payments not only cost her business time and money, but strained her client relationships and led to awkward conversations.

“The client gets more frustrated. Instead of remembering that time we saved them $5,000 or stopped them overspending in a business area, clients only know you as that annoying phone call chasing up late payments. So when they see your name coming up on their cell, they don't want to pick up,” she says.
 

The best way to avoid late payments is to automate payment collection from the moment your proposal is signed to minimize the chances of late or non-payments. Set up a billing and payments process using a platform such as Ignition that collects payment details upfront when clients sign your proposal. That way your client will be charged automatically at the right time, which means less awkward conversations for you and less work for them.

Since implementing an automated payment solution like Ignition, Marie Greene says, “We have zero accounts receivables, literally none. I used to have to go chase people – close to our annual calendar year end, I would have to call everyone and say, ‘you haven’t paid us’.”

If you’re billing on completion, finding it difficult to know how much a job is worth until you start work, or have clients that simply resist automated payments, it can result in tardy invoice payment further down the track. If that’s the case, try these pointers:
 

Make it easy to pay online. Consider using an online payment link on your invoices so all the client needs to do is add a payment method and pay online in a few clicks.

Automate invoice reminders. Put your invoice reminders on autopilot. This helps you sidestep the awkwardness because you’re not personally sending the reminder – your system is doing it for you, which virtually eliminates feelings of discomfort.

Be cordial. If you’re unable to automate your invoicing process, send a quick and light message gently reminding the client about the invoice. Keep things friendly and assume that the bill has fallen through the cracks. This post contains a template you could use in this situation.

Increasing your rates is necessary, especially as the cost of doing business continues to rise. But discussing money with clients can feel uncomfortable.

It doesn’t have to be awkward. This is how you can approach communicating your new pricing:

Give ample notice. Don’t wait until the last minute to inform your clients about your price increase. According to Rebecca Mihalic, Head of Accounting (APAC) at Ignition, “the conversation should happen well enough in advance of the change to minimize client pushback and having price rises ‘sprung on them last minute’.”

Emma Crawford-Falekaono echoes this. “Timing is everything. The earlier you have these awkward conversations to set expectations, the better. Be clear and concise in your conversation to get your point across and align expectations. If you put off these conversations or kick the can down the road, it tends to have a snowball effect.”

Focus on the value you deliver. When you’re raising your prices, take the opportunity to communicate the value you provide. Don’t be afraid to talk about what you’ve helped your clients to achieve, and go into detail about all the tasks you perform for the client.

There may come a time when you have to deliver unpleasant news to the client. Maybe it’s a higher-than-anticipated tax bill or new government guidelines that don’t favor their business. No one likes to hear bad news, but here’s how to remove some of the discomfort from the situation.

Do it ASAP. “Conversations with clients are generally only awkward if you are delivering bad or unexpected information,” says Rebecca Mihalic.

She adds that, “the best approach is to have the conversation early and honestly. Don't delay the conversation, as it will only make things worse. Getting on the front foot gives everyone time to digest and respond to the information without additional time pressure that would usually increase the chance of a poor client response”.

Communicate an action plan. Come up with a plan for what the client can do to alleviate the circumstances. Can they sign up for a tax payment plan? Are there changes they need to make in their business? Propose a solution and go from there.

 

Everyone makes mistakes. In fact, our ‘State of client engagement’ report shows that many accounting and bookkeeping firms are starting out on the wrong foot with clients. Forty three percent in the US (50 percent in Australia; and 25 percent in the UK) encounter the awkward client situation of sending clients proposals or engagement with errors multiple times in a month.

Own up to it. If you’ve made a mistake, own up to it straight away and apologize to the client. Covering up things can have disastrous consequences both for your firm and your clients. For instance, failing to inform a client that there’s a pricing error in your proposal could lead to you having to honor the quote, should they accept it. This in turn, can harm your business relationship before it’s even had a chance to get started.

Come up with next steps. Tell the client what you’re doing to remedy the situation. If it’s a proposal error, then it's a matter of amending the document and sending it to the client for review.

Have systems in place. As with most issues, the best ‘cure’ is prevention. If you're still relying on Word docs and PDFs to create your proposals and engagement letters, and duplicating existing proposals, it's easier to make mistakes. You're more likely to miss things or forget to add services.

Using a client engagement and proposal software solution that allows you to automate the tasks of sending these documents and build custom templates can save you time and minimize mistakes.

Using industry vetted proposal templates can also help eliminate any mistakes in proposals. As our research shows, it’s certainly worth automating these tasks to ensure that your documents are sent out error-free. As Emma Crawford-Falekaono puts it, “Using a platform like Ignition allows you to make corrections and issue accurate proposals efficiently, whilst decreasing the chances of a mistake happening again”.

Ending a client relationship isn’t easy, as Chris Brown, Managing Director of Brown & Co, in the United Kingdom explains:

“Previously, we worked with a sole trader who promised my team documents were ‘in the post’ or ‘already sent’. For two years, our team strived to continue to service the client, but the tension points only increased. Unfortunately, when the client accused our team of not doing any work, we had to retire the account and make a big write-off.”

This is a common occurrence at many accounting firms. According to new Ignition research, when awkward client situations arise, 31 percent of accountants in the UK address them with clients, but then just absorb the increased time and costs themselves.

If you find yourself in a situation where you need to fire a client, first check your letter of engagement to ensure you’re adhering to terms detailed within it.

Be transparent but respectful. As with all difficult work conversations, the best approach is to be honest while still being tactful. In the case of firing a client, it obviously doesn’t help to use the words, ‘you’re fired’. Instead, be diplomatic and let them know why circumstances have changed or why you’re not the best fit for their business needs.

Refer them to someone else. If it makes sense to do so, refer the client to another provider. Just like with turning down new clients, it’s best to send the provider’s info with their permission or to craft an introductory email.

 

While life is full of awkward moments, the client relationship doesn’t have to be. Many firms today are still holding on to manual processes, disjointed business systems and the mindset ‘it’s always been done this way’. This can lead to business complexity, ambiguity and a lack of transparency with clients. Clarity and confidence is critical for the health of the client relationship, firm and its people.

During our upcoming ‘State of client engagement’ webinar you’ll learn how to handle difficult work conversations with clients, so you can move forward with confidence. With the right tools and information, you can get on the same page as your clients right from the start and face these awkward client situations head-on, to spark lasting client relationships.