Success Unfiltered Podcast

Setting Boundaries for CPAs: Knowing Where to Draw the Line with Clients

After working with accountants for the last year, I’ve come to notice a common thread among many of you…

You love to say YES to everything and you love to give away free information.

Alright, maybe “love” is the wrong word. Obligated might be a better fit. You feel obligated to say YES to everything and everyone, and you give away free information whenever anyone asks you.

But if you keep giving away free information (that you know no one will take action on), and you keep saying YES to the less than ideal clients, you’re going to get burnt out and become unhappy, quick! I’ve seen it happen.

I understand the struggle. I may not be an accountant, but I get messages everyday on Instagram and Facebook from people looking to work one-on-one with me.

Of course, I’m flattered. It makes me feel good that my social media influences people on a daily basis. However, I know that I cannot just say YES to anyone that comes my way. If I did, I would be flooded with less than ideal clients.

I know this sounds like a good problem, but if you’re working with people you don’t like and you have NO time to network and bring in your ideal clients, it’s a bad problem.

At the moment, the only clients that I am working one-on-one with are accountants, and even from there I have a specific niche within the accounting niche that I want to work with.

So, when someone messages me to ask how they can work with me, I thank them for reaching out and then direct them to the many free resources that I have available.

This is something you can do, too! Maybe it’s not free resources that you refer them to, but a peer who is better able to serve them.

In this blog post, I’m going to share some of the best ways you can set healthy boundaries that leave you feeling good and like you’re still able to help those prospects that come your way even if they’re not the right fit for you.

How to Set-Up Boundaries

Before you set any boundary, you must figure out who you are and who you want your clients to be.

If you just start setting boundaries without any forethought, you’ll end up right back in the same situation you are already in–taking on clients you don’t like and that eat up your time.

Once you’ve taken some time to determine who you want to serve, you can start setting boundaries so that only those individuals become your clients.

Heath Walters, a guest on The Abundant Accountant Podcast, shared that his clients must be a business making over $400K in revenue. He also prefers working with businesses that are involved with construction and financial planning, but doesn’t necessarily limit himself there.

Even though Heath may not limit himself to those two industries he did share that working with those industries are easy and enjoyable for him because he loves looking at the whole financial picture and really enjoys construction. He also has experience working in retail and has built homes in the past.

His experience in those two fields means he better understands the inner workings of those businesses, and will be better able to communicate with the clients.

By knowing what his speciality is and ensuring that he only brings in those clients, Heath’s firm has gone from servicing 400 clients of all different areas and incomes to just 40 clients, and the key here is that his revenue has not decreased.

Making the Shift

Heath is able to look back over the last three or four years and see that while everyone he worked with did love his work, they never really valued the effort he put in or what he and his team were able to do for them.

However, once he started putting up those boundaries on the clients they wanted to work with, they were able to start delivering THE BEST service to the remaining clients,  leaving both Heath’s firm and the clients happy!

You’re probably wondering how Heath made the shift, right?

Well, let me first say that this wasn’t an automatic, quick shift. This happened over the course of several years.

But the big thing that led Heath to make the shift was experience.

He and his team were dealing with deadlines that were tough. The team was feeling stressed out and overwhelmed, unsure of how they were going to get through each and every work day.

During tax season they would be running until midnight, trying to get through everything that was coming at them.

They couldn’t think, they couldn’t focus and deep down Heath knew they couldn’t continue on like this.

Today, things are different. They have 40 clients and even when each of those clients has five to seven tax returns to complete, they have enough time to spend with each client and also provide a lot of proactive planning work. But not only that, they have time to think, time to plan and time to reach out and speak with clients to learn more of what their needs are.

The daily grind is gone!

This might seem too good to be true, but I assure you, if you truly desire this, you can achieve it.

As I mentioned earlier, this wasn’t an immediate thing, Heath began the process of reducing their client load almost two years ago.

His first step was to breakout a group of about a hundred clients that were just coming to the firm for tax returns. Heath knew that these individuals would never own a business so they had no value to his firm. Heath took that list of clients and sold it off to another CPA firm who was interested in working with these individuals.

The firm that Heath sold the clients to thought Heath was crazy because it reduced some of his revenue, but what it also did was free up 25% of his workload, and he really only lost 10% of his income.

Now, they were able to start focusing on clients that ran a business and were bringing in higher paying clients to make up the difference in the revenue they lost.

Over the next two years, Heath started terminating relationships with another third of his clients that did not fit his ideal client avatar.

How to Say NO

Now, what happens if you’ve started only taking on ideal clients and you have family or friends referring clients to you that don’t fit what you’re looking for?

If you’re anything like Heath, it will be a struggle to turn these people away. But in order to build an abundant accounting firm, you have to stick to the boundaries you’ve set for yourself and your team. Otherwise you’re going to find yourself right back in the same situation you were in before.

Telling a prospect a flat NO and that you’re unable to help them is hard. However, telling them you can’t help them and you know someone who can help changes everything.

You’re referring someone to a firm that is a better fit, so not only are you helping the prospect but you’re helping the other firm. This will build your sales karma. All accountants want more sales karma, trust me!

Allow Your Boundaries to Dictate Your Decisions

Once you’ve thought through your boundaries and you have everything in place, allow them to start making the decision on whether you take on a new client or not.

One of the other boundaries that Heath put into place for his firm was that they would not work with businesses that had four or more partners. Heath found that it became very difficult to get the partners to agree to anything when there were that many partners involved.

Instead of taking on clients that would be a struggle, Heath just said they wouldn’t work with businesses with that many partners. He allowed this boundary to dictate those decisions.

An opportunity did arise where a business with four partners approached Heath to work with his firm. However, during the initial meetings when Heath would present recommendations none of the partners would agree on whether it was the right thing to do.

One partner who was close to retirement wanted to save the money. Another who was young and interested in fancy toys had no interest in saving and just wanted to spend all the money.

Heath saw the forest for the trees. He knew that if he took this business on as a client the amount of energy that would be needed to convince anyone of anything wouldn’t be worth the money they would bring in.

Heath was willing to turn away between $25k-$40k in tax planning from this business client due to the fact they had four partners and about $18K a year in maintenance because the client went against his boundary.

Does that sound terrifying to you? Does the thought of turning away a huge client leave you feeling nauseous?

It shouldn’t! By turning away that client, Heath left his firm open to another real, IDEAL client to come their way.

Here’s What to Do to Guarantee You Work with Your Ideal Clients:

1. Work with clients that you like.

If a prospect comes your way and you just don’t feel like your personalities jive well, then they’re not ideal. Let them go! Refer them out to one of your peers who would be a better fit.

This is such a freeing position to be in.

If you actually think about the amount of time that you call someone and actually talk to them on the phone, liking the client is important. It actually lifts your spirits at work if you like who your clients are.

2. Determine the revenue level or industry that you want to work with.

Right now, Heath’s team will only take on clients that make $300k – $500K in revenue. When someone isn’t at that point but might be a good client down the road, Heath will give them a five or six tax plan strategy to lower their tax bills and then let them know that when they hit $300K to $500K they should call him back.

You might not want to be specific on the income and that’s okay. In that case, my advice would be to choose a specific niche that fits you and stick to clients in that arena only.

The Cons to Having Business Boundaries

When you accept a prospect that you don’t actually want to work with, you might bring in money but you’re losing time, which is eventually going to cost you down the road.

On the flipside of that con is the pro. If you have more time to work with ideal clients, you’re more efficient with your work, which means you’re more productive for other potential clients that might come in.

However, how do you not take on a client when you have payroll to meet, even if they’re not ideal?

This is literally the most challenging piece of setting boundaries.

Even with his solid boundaries in place, Heath and his firm still struggle with this. Heath has some clients in his book of business that have been there for a long period of time that don’t fit into his new boundaries (they’re making less than $400K in revenue).

Heath shared that he loses money maintaining these clients because they’re only paying a couple hundred dollars per month, but there has been so much time invested on these clients that it is difficult to let them go.

I share this with you because I want you to know that you are not alone. We may all be in different stages of business, but we all have similar struggles throughout. It just happens on different levels.

In Conclusion

As hard as it might be to create your boundaries and stick to them, it is 100% worth it.

There is a direct correlation between letting go of or not taking on a less than ideal client, and a more ideal referral coming to you after the fact.

It takes the courage to say NO to the wrong person, so that you can say YES to the right people.

What boundaries have you been struggling to set in your business? I’d love if you shared in the comments!

P.S. Do you feel like you give away too much information for free? Or you’re tired of inconsistent income after tax season is over? Or, you feel like you’re not being paid what you’re worth?

If you’re like many accountants you may feel like you’re on the cashflow rollercoaster!

There is a solution – a proven, time-tested way to get off that cashflow rollercoaster once and for all. You’ll be able to connect with high-level clients & business owners that you want; communicate your value, have a proven process that you can follow, collect higher fees with confidence and be paid what you’re worth so you can work less and make more money! Join our Abundant Accountants Masterclass today!