Accountants vs. Unhappy Clients: Who’s Right?

Too often, people find themselves unhappy with the work of their accountants. Whether it’s not understanding their company’s cash flow or feeling a tax bill is too high, clients wonder whether it’s time to move on to a new firm. But is the accountant the problem, or is it something else altogether? Below are some suggestions on what may be going on in your relationship with your accountant.

Translating the language of tax

As an investment advisor, I often end up being an “interpreter” between accountants who only speak in tax language and their clients who don’t. Due to this language barrier, frustration is common on both ends, with clients complaining of high fees and poor service while accountants blame their customers for unrealistic expectations. There is often an element of truth to both of those narratives, and sometimes the contentions between the numbers people and their clients stem from a bad fit. Let’s break down some potential frustration factors to help bridge the difference between everyday people and their accounting professionals.

Good accountant. Bad businessman

Not every certified public accountant (CPA) is brilliant, but earning that designation is no walk in the park. Most CPAs are smart and talented people, so unless a client has unusually complex needs, numerical incompetence is probably not the reason why client is unsatisfied. If an accountant couldn’t handle the average tax return, he/she probably wouldn’t have passed the exams nor built up a large and successful practice.

But just because someone is competent in the field of taxes and auditing, doesn’t mean they know how to run a business. Excellent accountants who open their own shops often struggle to manage the multiple aspects of operating a firm smoothly, which requires management skills beyond what is taught in school. Shortcomings in these logistical matters often grow as a professional’s client base does, and many customers of accountants may share these frustrations. If this is the case, then despite extensive knowledge, this CPA had better hire an efficient business manager to bring some order to his/her operations. Otherwise, they will begin seeing an erosion in client bases, and the loss of the excellent reputations enjoyed when they ran a smaller practice.

The sloppy culprit

However, it is also common that clients are the root cause of their problems. Accountants are not bookkeepers—it’s not their job to track expenses or sift through jumbles of invoices. You can’t expect to drop off a shoebox of papers in March and receive a well-analyzed tax return, financial reports, and a modest bill a few weeks later. A client with poor records is the headache case who will be moved to the bottom of the accountant’s pile. Eventually, an associate will try to do the neglected bookkeeping retroactively, usually at an expense far surpassing what a bookkeeper would have charged. At the last minute, the CPA will work with what they’ve got to file a reasonably defensible tax return. Out of time and without reliable data entry, some tax deductions will likely be missed, and there is almost no chance for actionable planning for the future. The disorganized client will be disgruntled but should look in the mirror for the culprit.

No free lunches here

Even if the books are in perfect order, clients may have unrealistic expectations about what their money buys. Most professionals expect to make $200–$500 an hour. This fee may sound like a fortune to some, but after subtracting overhead, unbillable hours, student loans, and taxes, it’s not nearly as much as it seems. While a young couple’s tax return may require little effort, accountants put much thought and time into complex returns, identifying all the potential credits and deductions to hold down tax bills. (If someone is paying lots of taxes, it’s probably because their business is making money, not because an accountant isn’t trying hard enough.)

Realistically, most accountants would be very happy to spend more time with each client, but often even substantial corporate clients don’t want to pay up. One CPA told me that someone kvetched about the $75 charged to produce a financial document required for a multi-million dollar real estate closing! Perhaps you aren’t getting sufficient advice because you’re reluctant to compensate for it.

Needs to be a shidduch

All that being said, it’s not always someone’s fault. You may have just outgrown the firm you’ve been with or require one that specializes in your industry. Many accountants develop niches, focusing mainly on real estate, health care, e-commerce, nonprofits, etc., or prefer clients of specific income levels and complexity. Perhaps your CPA has been biding his time, waiting to ask you to switch to another firm! Instead of fuming, you should schedule a meeting with your accountant where you can talk candidly. Not every client and accountant are a good shidduch, and a “get” may indeed be in order.

Want to dig deeper?

Try these related articles

Supercharge Your Real Estate Investing With Smart Tax Planning

Understanding Taxes On Gifts

Saving Your Earned Income Tax Credit

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