By Joe Woodard | Last Updated: August 13, 2020 minute read

How to Find and Serve Ideal Clients for Your Accounting Practice


I grew up sailing off the shores of Savannah GA, and as a sailing family, we were in a constant battle against barnacles. In case you haven’t heard of this little sea pest, a barnacle is a living creature that attaches itself to large objects like boats, docks, bridge supports…even whales. Then, they use this stable position to grab food – mostly microscopic – that happens to float by. Unfortunately, these bothersome little creatures also transform the streamlined, perfectly engineered hull of a sailboat to a momentum-killing source of drag. So, to maintain the best sailing speeds, boat owners must periodically hoist their boats out of the water and scrape off the barnacles.

Accounting firms have their own form of efficiency-killing “barnacles” like problematic employees, partner politics, antiquated workflows, outdated technology…the list goes and on and on. But, perhaps the largest, most tenacious and most pervasive barnacle we face is the unhealthy client relationship.

To keep your practice moving forward at peak speed, you must avoid entering client relationships that you believe will be toxic for your practice (daily chanting the mantra – “Not Every Client is a Good Client”), and you must proactively dismiss clients who drag down the practice. With the proper interview processes in place, it is manageable to avoid bringing toxic client relationships into the practice.

Consider the following when interviewing prospective clients:


Evaluate the Owner
  • Was the appointment process smooth? Administrative issues and scheduling hassles around the initial client interview speak to both the focus of the business owner and the level of respect the owner has for the role you will play in the business. Also, if the business owner is distracted during the meeting and/or allows himself/herself to be interrupted throughout the meeting, they are also showing a lack of respect for you and/or the role you will play in the business.
  • How intentional is the owner with the business? This one is key. If you seek a relationship with the client beyond bookkeeping and compliance, the owner must be focused on the development and growth of the business. Only then will they seek – and apply – your management advice.
  • How vulnerable is the owner during the process? I have learned over the years that arrogance is the mask insecurity wears. A meaningful relationship requires the business owner to be open and honest, and humble enough to accept advice.
  • How does the owner treat the company administrators? When you perform accounting services, the owner will see you and your associates as contracted administrators. How they treat their own admin employees reflects the way they will treat you and your team.


Evaluate the Company

The company doesn’t have to be in perfect working order for you to engage, but it must have core functional elements. In other words, if you are going to help shape the business as a trusted advisor, you must begin with moldable “clay.”

Before engaging the company, consider:

  • Is there a functional set of roles and responsibilities?
  • Are team leaders focused and competent?
  • Is there healthy respect for human resources – in compensation and culture?
  • Are there recent significant changes to the company? Its industry category? Its target market?
  • What is the culture of the company? Do employees feel excited/honored to work there? Do they take pride in the company’s products/services?
  • Is the business financially sound and if so, does the company pay professional vendors timely and compensate them fairly?

If these questions raise concerns, consider if you are in a position to work alongside the client to remedy the issues. You may need to engage in management advisory services before the client is a good fit for your accounting practice.


Evaluate the Compatibility of the Business to Your Practice

A healthy, thriving business with a coachable, respectful business owner may still not fit your profile of an ideal client – not if you set your standards on the ideal, not simply the functional/profitable.

As yourself if the prospective client…

  • Fits Your Area of Expertise (Industry and/or Service). Your ideal client profile should include very specific industry and service specializations. The best way to develop a practice that fits these specializations is by filtering clients at the “front door.” You can’t get a hamburger at Starbucks…and unlike many accounting professionals, they won’t stretch their brand and their capabilities just because you want something that isn’t on their menu!
  • Is Compatible with Your Preferred Technologies. As a tax preparer, for you to maintain standardization of process, the clients must be willing to use the solutions you prescribe. This includes your method of file delivery, but it also includes your hosting provider (e.g. Right Networks), your electronic signature solution, etc. for bookkeeping, holding the line on technology becomes more difficult – but even more important. If you are providing outsourced bookkeeping services it is critical for you to prescribe the general ledger solution, the accounts payable automation solution, the document parsing solution (e.g. Receipt Bank or Neat), and other elements of your technology stack. You can’t bring your own Keurig machine into a Starbucks and dictate they use it. And, as comical as that sounds, it is exactly what clients do when they dictate which technologies you can use in the performance of your client accounting services.
  • Has a Business’ Size and Level of Complexity that Fits My Process and Core Competencies. Simply put…is the client right-sized for the nature of your practice. Having the discipline to reject prospects that are too large – or refer out your larger, existing clients – may be the best way to preserve the profitability and manageability of your practice, especially if this large client would pull your firm’s partners away from strategic practice management and team leadership.


Finally, Fire When Necessary

Though client selection is key, firing clients (i.e. scraping the barnacles) is, unfortunately, a necessary part of the equation. Use the same criteria above to evaluate your existing clients and selectively terminate relationships that are unhealthy and/or unprofitable.

If you regularly terminate high drag client relationships, you will certainly see a measurable dip in revenues. However, you will not see a proportional drop in profitability. Hard decisions may ensue, like reducing the size of your professional teams, but if you are marketing aggressively and bringing in new clients with professional discernment, you can probably scrape your practice in this way each year while growing your teams and the overall size of your client base.

And, remember that employees can be barnacles as well. By reducing the number of problematic clients and by reassigning accounts to high performing employees, you may be able to scrape both the client and employee “barnacles” each time you lift your boat.

Keep your hull clean…and Happy Sailing!


Joe Woodard culminates his 20+ years of experience as a small business consultant and trainer of over 150,000 accountants, bookkeepers and other small business advisors to bring you this ground-breaking webinar series presenting practical ways for you to move into a Transformative Advisory role with your clients. Register here.


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