Client turnover question/poll

I'm curious about what other's experience is with client turnover. Every year, we loose about 5% of clients. We're still a growing firm so have a fair number of clients that have only used our services for 1 to 2 years. The cause this year ranges from our location or appointment hours are not, or no longer convenient, moved/needs special service re. tax in new state .... On the other hand I have heard some accountants say that they have never lost a client. Most of my clients have come from other firms so ... turnover seems common. But it peaked my curiosity how an accountant would never loose a client. Please chime in with your own experience about this topic. How long have you had your firm? How much is your annual client turnover and what do you think are the causes. And if you've never had a client leave, why do you think that is?

5% Turnover is normal IMHO! If you never had any turnover they you probably can "walk on water"!

Just a quick recall of my loss between 2017 and 2018 tax season, most of the loss was due to people moving away. I had 2 clients who left me for a cheaper option. 1 did not like my working relationship. 2 died, and 1 I fired.

I always try to find out from non returning clients the reason. Most are candid, but then I have situations where my calls go unanswered.

In the past 4 years, I have lost maybe 5-6 clients, several of which were at my own choosing because I grew tired of their nonsense. Two left when I bought out my partner--I guess they felt I wronged her, even though she is not even doing their work these days. Fine with me, they were pains.

Overall, I have worked with most of my clients for 10-15 years and maintain them because of a very high and personal level of service. Growth is going to pose an issue in being able to maintain what my clients have come to expect (and what I like to offer), so at some point I will be hiring only truly exceptional staff and/or turning away new work. I have no desire to become one of the larger firms here with in excess of 1,000 tax clients, on top of other accounting engagements...they just cannot operate the way I like to operate.

5% to 10% turnover sounds reasonable. if you don't have turnover your prices may be too low. 15% to 20% turnover might be a cause for some concern. I have about 3 to 5 % turnover however I usually more than replace them with more new clients at better fees and better clients.

5% to 10% turnover sounds reasonable. if you don't have turnover your prices may be too low. 15% to 20% turnover might be a cause for some concern. I have about 3 to 5 % turnover however I usually more than replace them with more new clients at better fees and better clients.

During the 2018 Season, I was booked solid - and lost 10+ new clients I couldn't see. Now I'm charging more, and losing some clients because of 'Price' and that's fine with me. I tell em, "if you want to work with a CPA
during tax season, we're not cheap." I give them an initial price range $400-$775. Beware, many "new clients" are someone's else's - headaches. I have an antenna for "Cheapo's" - I price them high, $1,500+; and don't hear from them again.

I had a new prospect requesting I do their 1041 for a trust. At the initial meeting I looked over the accounting and it was horrible so I quoted $700 with a clause that if they can't deliver the info I need by end of March it will have to go on extension. He jumps up "swears" and then tells me that HRB will do it for less than $200 according to his friend. Wished him good luck and gave directions to the nearest HRB about a mile from my office!

Yes, the prospect we all would regret taking on as a client. It is sometimes helpful to tell a prospect the number of hours the IRS quotes in all their publication for keeping up with the law. Clients pay you for your knowledge and expertise. HRB is not cheap and will charge a lot more than $200 for a trust return.

My firm loses about 20% each year but we are in an area where we do a lot of military.

I think I lose a lot of local business to because of price and slow turnaround time around the deadlines.

We are almost always patient, caring, extremely responsive, and polite to our clients - and we still lose them at a pretty good clip.

When we lose one, I am always introspective and try to learn form any mistakes - but in most cases I'm able to brush it off without losing too much sleep.

If you are losing 5%, you must be doing great (or you are too cheap).

What is your average turn around time? I try to get a return ready for filing within a week if all information is received promptly. I also make it a point to ask folks who just drop off/e-mail their paperwork if they are in a rush and I can do a rush job for additional fee. Most people say just take your time! Also if there is a delay (we get bad weather here in NE), I call or e-mail status. I find most people are understanding if clear communication is established.

I am currently at about two weeks turnaround, mostly because I inevitably have to ask nearly every client for more information to properly complete their returns. I met with a new client on Saturday and picked up their info; told him 1-3 weeks since S-Corps and Partnerships are being given priority at the moment. Tomorrow, I have a meeting with another new client to go over some issues that exist on his books and gain an understanding of how information flows into his accounting. Another has been chasing down 529 plan info I need to confirm it can be deducted at state level for about a week now.

I do not feel I am too inexpensive, I stay very aware of market rates in my area. While I technically have hourly rates, that is not how I actually bill out. Rarely am I ever much cheaper than larger firms charging $250+ per hour, but I provide significantly more personalized level of service. My effective rate is as high as $500/hr. I am happy, clients do not complain, so I think I am in a good spot with current billing practices.

We have about a 2 week turnaround time as well. Most people will be missing a form or two when we meet.

We had a 2 week turnaround. High volume creeps in around 02/21 as we had 72 returns come in the 21/22. We’ll get stuck on those days and be around 3 weeks until we get through the deadline. The cutoff is 03/22 for extensions this year.

This year one of my 1065 clients is making me worry. She has not responded to my 2 e-mail reminders and her phone is always on voice mail. I am wondering if I should just file an extension, in case she is out of town/country?

What would you guys do?

This year one of my 1065 clients is making me worry. She has not responded to my 2 e-mail reminders and her phone is always on voice mail. I am wondering if I should just file an extension, in case she is out of town/country?

What would you guys do?

I file an extension for any flow-through entity I prepared the year before unless I’ve been informed they have a new CPA/preparer.

I can’t think of any harm done, and certainly there is upside.

I’m turning new clients down , as I’m worried I won’t complete unfinished returns of current clients. Also, I neeec to sleep more and spend time with my 7 year old son and wife. It is busy season , but my son will only be in 2nd grade once.
Also , the additional stress of accepting procrastinators and not sleeping enough isn’t worth the additional money.

One client / family that I enjoyed working with basically fired me. The spouse told me that husband left Google to begin work at a start up company. The start up , according to her , has CPAs that prepare their returns for employees. I was a little bit down, since that family paid well and they were pleasant people.

I think it’s important that going forward , after tax season, I need to be sure I reach out to clients during the year for planning. Too often , I prepare the return and do not speak with the client again until the following tax season. Not a great way to establish a relationship and provide value. I need to be more proactive

I wouldn't call that being fired, unless mistakes were made and the reason the client moved on was that they weren't happy with your work. I also will be losing a client next year. They're moving overseas and the company the HB works for pays a big CPA firm to do the tax prep for their overseas employees. The client will be losing out on what I call client care. Then again, they may be back because there won't be a personal relationship anymore and their tax questions will go unanswered ... They had that experience in the past with a big firm which Is how I got them as a client.

So far I lost one client. She believes her return is simple enough to do herself. I expect to see her next year. One long time favorite client passed away but I gained his daughter.

I am currently at about two weeks turnaround, mostly because I inevitably have to ask nearly every client for more information to properly complete their returns. I met with a new client on Saturday and picked up their info; told him 1-3 weeks since S-Corps and Partnerships are being given priority at the moment. Tomorrow, I have a meeting with another new client to go over some issues that exist on his books and gain an understanding of how information flows into his accounting. Another has been chasing down 529 plan info I need to confirm it can be deducted at state level for about a week now.

I do not feel I am too inexpensive, I stay very aware of market rates in my area. While I technically have hourly rates, that is not how I actually bill out. Rarely am I ever much cheaper than larger firms charging $250+ per hour, but I provide significantly more personalized level of service. My effective rate is as high as $500/hr. I am happy, clients do not complain, so I think I am in a good spot with current billing practices.

This is where I am...our average return is $600 to $800 and at times I think that is too cheap. Ive got plenty at $1,000 and higher but they take longer, are very detailed oriented and multi state (lawyers in big firms for example). We lose clients at about 5 percent or so due to marriage, moving, price etc. I have enough clients that have stayed with me forever that I don't question it any longer.

nice to see Southpark back in the mix here, always appreciate your wisdom from a business aspect of a tax practice. I'm a little confused by gnfr's post, you are turning away clients yet at the same time disappointed that one client left not due anything you did wrong...

I'm a little confused by gnfr's post, you are turning away clients yet at the same time disappointed that one client left not due anything you did wrong...

It feels better to fire someone than to be fired yourself.