A high-profile, regional sports club ends up £50,000 in debt. But no one involved with its financial management is prepared to be frank about what has gone wrong. The club’s board appoints a new finance director, who instantly digs into the errors that led to the debt. As a result, half the board members resign. Had the previous finance director been more willing to confront the problems head on, the boardroom mess could have been averted.

A founder of an award-winning accountancy firm runs into trouble. While the firm has distinguished itself in the market and won acclaim from its peers, the founder hates difficult conversations and stubbornly hides behind her emails. When something is amiss, she won’t answer the phone or meet clients face to face. As a result, she loses clients and even friends. Eventually, her unwillingness to engage lands her with a threat of legal action.

These are examples of scenarios where a difficult conversation would be necessary. Here’s another: a small family business run by a group of siblings requires tax advice. One is highly connected and books an adviser for what she thinks will be a quick, one-hour chat. The adviser looks at the details and says: “This is actually quite a complex matter. You can’t get this wrong, or it could cost you up to £5,000.” Straight away, the siblings listen up and rally round to resolve the issue.

“The sibling who contacts the tax adviser in the above scenario is me,” says Accountants’ Growth Club Founder and keynote speaker Heather Townsend. “So, I know what it’s like to be right in the middle of this stuff.”

In Townsend’s assessment, having difficult conversations with clients is intrinsic to being a role model and leader in the accounting profession. It is a critical part of an accountant’s commitment to high ethical standards. No responsible accountant who takes pride in customer care should avoid it.

Classic triggers

Difficult conversations have a number of typical triggers, the first being the thorny issue of fees, Townsend explains. For example, an accountant may charge a fixed fee for an audit while billing by time on other tasks and the client complains about overruns.

The worst issue is when you don’t even talk about money in the first place, she says. “One of the biggest skills in this profession is being able to talk about money in a prompt and proactive manner. And that particularly applies when you start to see yourself going outside scope.”

Other triggers include:

1. Surprises

“For some reason, lots of clients think that accountants work for HMRC,” Townsend says. “So, they’ll take issue with the unexpected size of a tax bill, and you say: ‘But you earned extra money, didn’t you?’ And they say, ‘Well, yes…’ But somehow, it’s still your fault. It’s important to help clients realise that they must take ownership of their tax affairs.”

2. Timings

“Let’s say that, as a client, I know that I must do my PAYE run on the 20th of the month,” Townsend says. “My accountant knows that the drop deadline is the 22nd – but also knows that, in my head, it’s the 20th. The accountant comes from an industry where you pay bills at the last possible moment. But I just want to sleep at night. That can be quite tense.”

3. Junior staff

“Some clients may be very critical or condescending about your juniors while speaking to you. Or, in a worst-case scenario, one of your juniors will get it in the neck from a client who’s complaining about something that isn’t even their fault. Unless the client is hugely apologetic, a really good firm would be prepared to sack them.”

4. Mistakes or oversights by a previous accountant or auditor

“For example,” Townsend says, “you have to call the client and say, ‘Sorry about this – but I’ve got some bad news. The previous auditor didn’t pick up this error in their schedules. We’re now going to have to file a declaration, and your audit’s not going to look like it did last year.’ Now, that’s not the fault of anyone in the room. But it’s a conversation that needs to be had.”

Willing to flex

For Townsend, preparing for difficult conversations stems from a refusal to hide from problems. The sooner you have the conversation, the sooner you can resolve the issue. “It’s like pulling a plaster off,” she says. “It’s always going to hurt. But you must take charge and be proactive. If the client’s chasing you, then you’re being reactive and are automatically on the back foot.”

Once you have pinned the client down, Townsend advises: “Don’t back the bear into a corner, because it can only come out fighting. In other words, don’t go in with an accusatory tone, assuming they’ve been ignoring you. Go for, ‘We’ve tried to get hold of you five times for the information we need for your tax return, have our messages been getting through?’ That gives the bear a chance to walk out of the corner.”

Next is empathy. You may be sorely tempted to tell the client off for being poorly organised and may well be justified in doing so. But open criticism, Townsend says, may make matters worse. “Instead, try: ‘Well, this is a tough one. No one wants to be here. I really relate to what you’re feeling right now. How best can we move forward?’”

Empathy is particularly important when working with SME owners, Townsend notes, because as many as one in 10 – perhaps more – are neurodiverse. “We’re talking ADHD, autism, dyslexia and dyscalculia, all of which provide challenges with processing information. Part of our mindset as accountants is that we must be willing to flex to ensure our clients properly understand us.” 

That means varying the delivery of information and asking clients what formats they prefer, such as bullet points, long-form explanations, or a phone call backed up in writing. “That’s really important.”

Ultimately, it’s important that you tackle difficult conversations head on. Otherwise, like in our example above, you could end up facing a much bigger problem down the line.