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Dump Your D.U.M.B. Accounting Firm Clients 

By: Mike Milan | February 05, 2020

Up or out?! If you want to take advantage of entrepreneurial profit, you need to migrate your client base up the value chain of your firm’s services. The lower-end clients will become a drain on your resources and ultimately be less profitable. For this reason, it’s OK to let your lower-performing clients go. In my opinion, they're D.U.M.B. No, I'm not saying they are unintelligent, they just Don't Understand My Business. They don't "GET IT".


Define your ideal client persona per service offered: Not everyone needs everything you offer. Some people may be succession planning candidates, while others need audited financials for the bank. My suggestion is to build an “ideal client profile” for each service and then match your current clients to those services. 

  1.  The main point here is to identify who needs or gets the most benefit from each service you provide.
  2.  Focus on who might be the best buyer for your service. This means who is most likely to buy, who gets the most benefit, and who should be excluded. At this stage, you are identifying a persona, not an actual client. You will match the client with the persona in a later step. 
  3.  Part of your regular conversations with your clients should be identifying needs by using a needs assessment form. A good quality needs assessment will include a set of questions and financial facts that align with the services you offer


Bundle your services to create packages for your ideal client personas: Once you have a list of services with an associated ideal client persona, create a matrix of the mixture of services that your perfect client would purchase from you. 


  1.  This package of services should be ones that are both required for compliance and advisory. In a perfect world, every client would need every service and be able to afford it. That’s not the world we live in.So, your best bet is to build 3 to 5 packages of services that most clients can fit into. 
  2.  When pricing these packages, align the costs associated with your service with the package price. Be sure to account for the time it takes to complete each task and buffer the package with technology offerings that your firm pays for. For instance, if you pay a monthly subscription for a service for unlimited use, using it with more clients makes your cost per client cheaper.Bundling these services at a full per-client price gives you an opportunity to increase the profitability of the service package. 
  3.  If a person can’t fit into a package, the likelihood of that client being a challenging one that eats up your time will increase exponentially. Try to avoid taking on these types of clients. You want to put clients into efficiency buckets, where potions of your services are consumed.You should now have packages of services with an ideal client in mind. 


Migrate your client base up the value chain: In business, we tend to spend 90% of our time with 10% of our clients. Guess which 10%? The ones who are the most challenging and are the exceptions to our processes and procedures. 

  1.  In general, you are probably losing money with this customer, but you fear losing their business. Don’t. Clients need your help, but they don’t get the opportunity to change the way your business works. 
  2.  During this phase, you are going to offer your service packages to the client that is the best fit for the services. You will improve your cash flow by enrolling your clients in your efficient service offerings and reducing the amount of time it takes to maintain their account. 
  3.  They become part of your process that you can scale and replicate. Businesses that employ a successful migration strategy let go up to 10% of their low or unprofitable clients each year. 


 Tags: small business, accounting, advisory services, migration strategy, accountingweb, guide, how-to, cash flow mike, cash flow