Breaking Bad News to Clients

Money is a hot-button topic for most people, but breaking bad news to accounting clients doesn't have to be an anxiety-ridden undertaking. From a large company to a family of four, no person or entity is immune to finance problems, which is why you should always be prepared for the worst-case scenario. Maintaining a professional, compassionate demeanor when breaking bad news puts clients at ease and reassures them of your ability to handle financial setbacks. After all, even individuals down on their luck need an accountant's expertise to help them navigate their uncertain financial future. So avoid losing your clients to another accounting firm by making a positive impression—even under pressure.

Whether you're informing a client about a small tax refund or a negative financial forecast, breaking bad news should be done in an appropriate setting. When finance problems can be easily rectified and won't disrupt a client's life, a simple phone call or e-mail may suffice. But if you're hesitating to pick up the phone or click the send button, it might indicate that the conversation needs to happen in person. The prospect of financial ruin or an IRS audit is not easy to digest, no matter the setting. Breaking bad news face to face, however, can alleviate some of the tension and confusion by enabling clients to draw strength from your confidence and support. Clients may interpret your absence as a lack of commitment, or even worse, as a sign of culpability, so in most cases, you'll want to avoid phone calls, text messages, voicemails, and e-mails unless absolutely necessary.

Because matters of taxes, financial reports, and analyses are complicated topics for the average layperson, both businesses and individuals consider accountants an indispensable expense. Unsurprisingly, when you're breaking bad news, you may encounter resistance from clients who don't understand how and why they're in this situation. Meeting in person, however, leaves very little room for doubt and denial. Breaking bad news face to face gives them the opportunity to pose questions and seek clarification without chasing you down. By being straightforward and honest and not delaying the conversation, you demonstrate integrity and increase your chances of retaining the client. Superior communication skills also have the added benefit of making you an appealing candidate for other finance jobs.

Keep in mind that clients may need to immediately approve a plan of action to mitigate the financial and even legal impact of underreported earnings or a high tax bill. The situation may require cutting back on expenses, filing for bankruptcy, and pursuing other costly measures that will affect your client's everyday life. Yet in the long run, helping a client devise a solution, however difficult that may be, is better than just giving bad news. Knowing that there's a way out may transform the client's attitude, turning despair into determination.

Breaking bad news can be emotionally trying for both parties. To make it easier for everyone, speak directly, speak with compassion, and speak about solutions. Show clients you're an accountant they can trust, and build a reputation for dependability to ensure long-term success in the competitive field of accounting.

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