Delivering Bad News to a Client: An Accountant’s Guide

There are several scenarios whereby you will have to deliver bad news to a client. Whether that's because you cannot meet a deadline, you lack the bandwidth to help with their tax planning, or the tax authorities disagree with their position. The truth is, when it comes to accounting, bad news is unavoidable. So, it's vital that you learn how to deliver it in a constructive (and non-confrontational) way.

Throughout this article, we will discuss the best ways to approach delivering bad news to a client (whilst also offering some preventative tips during the process).

1. Arrange a meeting

First things first, set up a meeting. You do not want to be delivering bad news over email - it’s impersonal and can easily cause conflict. So, either arrange a zoom call or (preferably) a face-to-face meeting. That way, you can avoid being misinterpreted over email.

2. Address the issue as soon as possible

a woman with a phone to represent delivering bad news to a clientNo one enjoys delivering bad news to a client. But unfortunately, it has to be done. So stop delaying the inevitable and start addressing issues immediately. Otherwise, you’re only exacerbating the problem!

The sooner you address the problem, the quicker you can resolve it. So rather than waiting until the very last moment to deliver the bad news, try and get ahead of the problem by diagnosing it early on! Not only will this minimise the amount of damage done, but it will also show your client that you’re a proactive (not reactive) individual.


3. Don’t start pointing the finger

Placing the blame on your client (or vice versa) will not remedy the situation - it will simply damage your rapport. So do your best to remove blame from the equation.

Instead, approach the problem as a team. Pitch ideas, discuss implementation and work on finding a solution that suits both parties. Not only will it make solving the issue so much easier, but it will also promote collaboration and communication. Both of which are essential to an effective working relationship.

With that said, if you have knowingly made a mistake, hold yourself accountable and admit to it. Even if your client is frustrated or upset, we all know that human error is inevitable. So try not to worry too much - at the very least, they will value your honesty.

Read: Managing difficult client conversations: 6 proven strategies

4. Educate your client

two women conversing to represent delivering bad news to a clientWhen delivering bad news to a client, part of your job is to educate them on what went wrong. Now, this part of the process can go one of two ways. Either you can start assigning blame (refer to our previous point), or you can empower your client through education.

But what exactly does that mean?

Often mistakes are made from sheer misunderstanding. So it's your job to remedy that.

Now, your client probably isn't an accounting expert, so you might want to refrain from diving too deep into data analytics. Instead, focus on relaying the information in a way that is both accessible and understandable to your client.

If they can understand how the problem arose, they can better resolve it. What's more, they will be able to prevent similar mistakes in the future!

5. Offer a solution

Not every problem has a simple answer. However, there is always something you can do. So, instead of simply delivering bad news to a client, try to offer a solution at the same time. Even if it's just a temporary fix - something is always better than nothing!

(For example, if their net income is too high, suggest redistributing that money into increasing payroll, offering bonuses or buying additional equipment.)

Whilst you may not have a magic wand, you can always make some adjustments to help alleviate the issue.

6. Use technology to your advantage

mobile phoneOur final suggestion is more of a preventative measure. After all, you don't want to deliver bad news to a client every other week.

If you haven't done so already, try to encourage your clients to download a cash-flow app. It will allow them to closely monitor their accounts, track their performance and adapt their business strategy accordingly. Not only will this help to empower and educate them, but it will also make your life much easier.

So save yourself some time and start using technology to your advantage!


Every solution starts with effective communication

Whilst we cannot predict our client's reactions, there are several steps we can take to soften the blow of receiving bad news. So remember, be compassionate (not confrontational), offer adjustments (no matter how big or small) and empower your clients with education.

If you apply these three principles, we're confident you will be able to solve your client's problems quickly, efficiently and without the risk of damaging your relationships.


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