Top 3 potential client red flags

Spotting potential red flags when meeting new management accountancy clients isn't always easy. Business owners can be a bit concerned about giving away too much sensitive information about their business when they don't know you well. Here we discuss some traits and behaviours which are obvious red flags so you don't need to waste your time finding out more about the client!

Why is it important to spot red flags?

Management Accountancy clients are a lot harder work than statutory clients. There is a lot more legwork involved in understanding the specifics of each business so you can provide the best financial information to help them make strategic decisions.

Spotting red flags from the start of a potential client relationship means that you won't spend hours and hours heading down rabbit holes without any success in the future.

So what should I look out for?

Sometimes is just a gut feeling and, in my experience, nine times out of ten it's worth listening to your intuition. If you're still not sure, use these three pointers to avoid disaster:

1. "I didn't get on with my last bookkeeper (/accountant/VA...).

Really? Hmm, why was that then? Of course, sometimes personalities just don't fit, and maybe it will be different with you. But us accountants/bookkeepers are actually all quite similar, so if there was something that the previous one didn't like about this business owner, chances are you might end up feeling the same.

2. "I haven't looked at my accountancy software in years!"

Now, this one isn't necessarily a complete no go. But beware, there is likely a can of worms waiting for you inside said software. If you're anything like me then you'll have a grand old time tidying it all up (!) but, make sure you price accordingly!

3. "That's too expensive"

Run. Run now. You've spent a lot of time thinking about your prices and are gradually getting used to charging what you (and your services) are worth and then this numpty comes along and shoots your confidence right back down to the ground. Don't let them, have conviction and walk away. There will be other clients, I promise, who will value what you do and be willing to pay for it.

How should I let the client know?

Now, you don't want to be rude. And us accountants are not always very confrontational. So how do you let a potential client know that you don't want to work with them.

You could be honest, but in this case it's probably not the best thing to do.

"I'm not currently taking on new clients" is a good place to start. You could recommend some different options for them instead, that way you're still offering them some value and hopefully they won't be too upset!

It's not always easy finding new clients and it can be so tempting to just say yes to any that come your way but, trust me on this one, look out for the red flags!