4 Steps for Developing and Implementing a Client Acceptance Policy

It’s not uncommon for a CPA to have one of those clients. Maybe there were warning signs from the beginning, but somehow, they seemed to fall below the radar. Now, you find yourself serving a client who complains about their bill, has asked you to do something unethical, is always late with their information, or is increasingly rude. Situations like these are unpleasant and can absolutely be avoided. In this post, you’ll learn 4 steps to developing a client acceptance policy, the characteristics to weigh when accepting clients, and important best practices for implementation.

  1. Identify Your Ideal Client

The first step for creating a client acceptance policy is understanding the types of clients you’d like to have. There isn’t necessarily one ideal client. Study your service lines and industry areas and create a set of criteria for each. Consider the following:

  • Annual revenue – for certain service lines and industry groups, annual revenue may be a factor in accepting a client due to internal resources or level of services required.
  • Potential services – your ideal client should utilize multiple services within your firm. Analyze the opportunity for expansion of services for each client.
  • Relationships – examine the relationships your potential client has with existing clients (family, friends, business associates), and referral sources (bankers and attorneys).
  • Risk level – what level of risk is the firm willing to accept? This can include risk associated with the prospects financial situation and their reputation.
  • Fees – start by outlining your fee structure. Does your firm set minimums for services, and if so, does the prospect meet those and are they willing to pay the appropriate fees assigned to the engagement?
  • Mindset – firms want to work with clients that value their services. The way a client treats your firm, their positive disposition and/or willingness to listen are often important factors in accepting new clients.
  • Other – other unique criteria may prove valuable to your firm. For example, business profitability or number of years in business (not a start-up). Determine your set of criteria and articulate them as best as possible.
  1. Create a Client Acceptance Matrix

Once you’ve established a clear outline of your ideal client(s), you can use it as a guide in developing your client acceptance matrix. Outline ideal characteristics within the matrix and rate each prospect accordingly. Examples of characteristics may include:

  • After reviewing the client materials, there is no evidence to show the prospect would be a high risk for the firm.
  • We are appropriately staffed to meet the needs of the prospect or can become staffed through temporary or permanent hires.
  • The proposed fees meet our established minimums, are adequate to achieve our desired realization, and meet the client’s needs.
  1. Designate who will be Involved in the Process

When working with firms on their client acceptance process, we find that creating a committee to approve clients can be helpful to ensure the appropriate parties are involved. The committee may include partners, managers, and firm administrators who can act as gatekeepers for the firm by ensuring criteria has been met before accepting a client.

  1. Promote and Educate the Policy Internally

Internal communication is a crucial step to the success of a client acceptance policy. Members of your firm need to understand the desired characteristics of your ideal client before creating their business development strategies.

  • Share your ideal client model and encourage activities that support those areas.
  • Outline the steps required when submitting a prospect for acceptance
  • Establish a schedule for committee meetings and expected turnaround time.

Achieving strategic growth begins with a blueprint of your firm’s ideal clients. Turning away those who don’t meet your criteria is hard to do. We promise this process will make for happier employees with higher realization (because they will be working with clients they enjoy!). Contact us for help in establishing a client acceptance policy for your firm.

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