Potential new client looking for references

Do you have clients who act as references? A potential new client for bookkeeping/consulting work is asking if I can send references. I have never been asked this before and I don't have any clients I've ever asked to be a reference.

Wondering if this is usual practice and how to proceed.

It's probably rare, but not unreasonable. In my small practice it's only happened once or twice that I recall. Think of an existing client whose situation might be similar to the new one, and then just ask them if they mind talking to the new person, they probably won't.

It seems nowadays people rely more on social media (e.g. Yelp) reviews for this sort of thing, do you have any online reviews you could point them to?

Alternately, you could say none of your current clients wish to share their information (even the fact they are your client), and then explain what type of satisfaction guarantee you provide (for example, I don't require payment from my tax clients until they agree the return is complete and ready to sign).

Just like hiring any other professional our client's may require us to provide some references. I have cultivated about half a dozen clients over the years to provide reference if necessary. My understanding is that no tax details will be shared and the scope of the reference will be "quality of my work". I make it clear to potential clients that require a reference that I will first make contact with my client and if they are ok, then they can contact.

So far I have had one situation with an unreasonable prospect who wanted to see some tax returns of other attorney client to see my work. BTW this fellow was an attorney too. I told him can't do, go to HRB

I had this happen twice. First time I told the person to eff off. Treated me as if I'm interviewing for a job out of college. Questions like do you know accounting? Wanted to know the college I went to too. Small time client without a clue. Wasn't worth my time.

Second time I told the client I pride myself on client confidentiality and don't disclose names or services of my prior or current clients. Client signed my EL and is still with me.

Have I been asked? Yes. Am I prepared with references just in case? Yes, though to my knowledge none have actually spoken to the references. Tax clients are simple to obtain, but still not my focus--I want the 5 figure controllership contracts, and that is where they typically want references, particularly if they were not referred to you by an existing client.

I have very good relationships with my clients. Still, it is difficult to get clients to commit to being willing to speak with prospective clients, or to write testimonials. And yes, the scope of the reference is strictly concerning quality of my work and effectiveness with communication.

I WILL follow confidentiality requirements concerning sensitive information, but I am not going to take it so far as to not reveal client names or services provided. If one has to do that, I assume they are afraid of competition and/or have a big mouth in discussing sensitive information under the veil of confidentiality by not revealing client name, which is nonsense. I have nothing to hide, embrace competitiveness, and I certainly am not afraid of another firm swooping in and stealing my clients. Honestly, I live in a small area--not difficult to find out which CPA serves any given person or business. But if the prospective client wants to see anything I cannot release or disclose, not going to happen.

Actually, I think we ought to be asking them for references. Most of my clients come by referral. When I am contacted by a potential client---expecially one who gives me a sketchy answer when I ask how they heard about me---I am a bit leary. Very often these follks are forum shopping or trying to get free advice. They want to ask a lot of specific questions before signing an engagement letter. One even asked me to do a "trial projection" so they could see how I think (Seriously?) When I refuse to do this, they move on.

It is simple client due diligence and quality control. If you ask the proper questions with prospective clients, you can quickly catch on if they will be excellent, a headache, or an absolute nightmare you immediately turn away. There were warning signs with a client I took on last year, and I had to disengage earlier this year after I found evidence of fraud, could not obtain required documentation, client was not listening to my directives, etc., and then proceeded to try to turn the tables on me. I quickly gathered her documents and delivered to my lawyer, who prepared an affidavit she had to sign indicating she had received all documents and that I had disengaged from providing any additional services. My idiocy--like I said, the warning signs were present prior to engagement.

If they are leaving another firm, that is certainly a question I ask--"What prompted you to leave XYZ?" Given I am familiar with most of the local firms, I know very quickly whether their answers are true or if the real problem is actually the client.

As we all know the best source of clients is referrals from existing clients. It is also well known that people generally refer other people who are in a similar financial situation or social class. Long time back I learned not to ask for referrals from clients who I would consider PIA! Now and then I have to do a favor for a good client by preparing the returns or fixing a tax mess of an errant brother or other relative, but that just goes with the territory.

We all get those people who are just shopping around for the best price or the most refund. Generally speaking within 5 minutes of having a conversation you can pretty much judge which way it will go and make the appropriate decision.

Once I had the mother of an existing client dicker with me for 2 meetings over price. It was a complicated return so finally I told her that if she can find someone less than me she should go for it. She went to another CPA firm and was laughed off totally. She came back and apologized for being so difficult.

I am in practice for over 30 years and have had a situation only once were a potential new client asked for a reference. The potential client was a senior citizen and did speak directly to the client that I used as a reference.