There are many reasons to sever the accounting/client relationship. Take a look at these reasons and think about whether this has happened in your practice.

1. The client takes up too much time. This is the number one reason we fire clients. Heard of the 80/20 rule in which you spend 80 percent of your time on the bottom 20 percent of your client base? These are the clients who are not adding to your bottom line, so your return on investment is very slim. It's better to get rid of the bottom 20 percent of your clients so you can focus on the remaining clients who will generate more revenue.

2. The client withholds information. If you find clients not being honest with a particular situation or withholding valuable information that enables you to do your work in the most ethical, legal manner possible, it's time to part ways. You cannot afford to damage your reputation with a client who has the potential to do harm to himself, and in turn, to your practice.

3. Clients do not want to be helped. As strange as this sounds, we've all had clients who did not want our professional assistance, no matter how simple or complex the situation may be. A client who does not want to be helped will never accept your advice and will not respect your intentions. It's time to find clients who will benefit from your professional experience and knowledge.

How to Fire a Client
Having to say "so long" to anyone isn't pleasant; think about the times you've had to let an employee go. Nevertheless, when it's time to cut the cord, you have to do it in the most professional way possible.

Looking at the three scenarios above, it's easy to see why you would want to fire a client, but one of the main traits we have as human beings is the "likeability" factor. For example, you may have a client who will literally give you the shirt off his back if you ask him for it, but is a lousy businessman and costs you time and money.

If this happens, you need to separate your personal feelings from your professional beliefs. After all, you may see the client in religious or social situations. Perhaps you belong to the same Rotary or Lion's Club. What are you going to say to the fired client the next time you see each other?

The best way to move on is to have a professional conversation with the client, explaining to him or her why you need to part ways. You must be prepared and provide concrete examples. Just as you document activities when you fire an employee, you need to do the same when you fire a client.

Be reasonable and explain in plain terms what the problem is. While it's most likely not going to be surprising to the client that there is a problem, no one wants to be faced with rejection, so the initial reaction may be more anger than anything else. If this happens, reassure the client that this is a completely private matter between the two you and should remain so. You will talk to anyone about this and you would appreciate it if the client would do the same.

Back to social media: what do you do if the client says something negative on LinkedIn, Twitter, Facebook or in a blog posting? You may very well have to call an attorney to get involved. However, watch your own temper. It would be unprofessional of you to lash back in retaliation. Take the high road; the best stance is to do nothing. It's better to let the client stumble over his or her words than to react to them.

If it escalates to the point that your colleagues and perhaps even your other clients are aware of the problem, it may be time to communicate via letter or e-mail to explain the situation. Still, don't reveal any information that can be used against you later on. Again, an attorney can guide you through this difficult situation.

There are multitudes of business matters each one of us is faced with, but we often forget the human side of the equation. Firing anyone isn't pleasant, but with planning, communications and calm demeanor, you're going to emerge positively from the situation.

Hugh Duffy MBA

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Hugh Duffy is co-founder and chief marketing officer for Build Your Firm, a leading practice development firm dedicated to the accounting industry.  Based in Madison, Conn., Build Your Firm works with small accounting firms providing accounting marketing, practice management and Web site development services. 

Prior to co-founding Build Your Firm in 2003, Hugh was a Vice President of Internet Marketing for Business & Legal Reports (BLR), a business-to-business publisher for small and medium sized businesses.  Prior to BLR, Hugh was a Director with a publicly traded global internet media company, 24/7 Real Media responsible for Business Development and Strategic Partnerships.  The foundation of Hugh’s marketing background is fourteen years of consumer packaged goods marketing with Schick, Nabisco, Clorox and Coca-Cola. 

Hugh has 25 years of marketing experience, an MBA degree in marketing from the University of Rochester and a B.S. in finance from the University of Maryland.  While at Maryland, Hugh was on a golf scholarship and his coach was Fred Funk, PGA Tour player.  Today, Hugh’s golf game suffers and he is content watching his two kids play college lacrosse.