Blog|5 min

Three Little-Known Reasons Why Businesses Stop Referring Their Accounting Firms (And How to Avoid Them)

Jeannie Ruesch, Director, Marketing

A colleague told me over lunch one day that he was unhappy with his accounting firm. His accountant made a huge mistake on his tax return – one that my friend (fortunately) caught and corrected. However, the error concerned him.

When I asked if he wanted a recommendation for other accountants, he shook his head.

“No, thanks. I’ll stick with mine. I just won’t refer her anymore.” 

For accounting firms, these words hit as harshly as getting fired.  

The referral pipeline

Referrals can represent a gold mine for accountants. Happy clients readily give their accounting firm’s information to family, friends, and colleagues. These people, grateful for a recommendation from someone they trust, then contact the firms as eager prospects. The cycle creates a lucrative source of business for firms – one that requires very few marketing dollars. This pipeline is often so prosperous that many firms don’t widely invest in other marketing or advertising initiatives.

If referrals dry up, however, firms can suffer from a steep decline in new business. With potentially unhappy clients, they can also lose existing business or chances to introduce them to new services.  

How can accounting firms prevent this from happening? First, they have to know the cause.

Data from the 2019 Accounting Firm Hire/Fire Index 

New survey results from reveal reasons why businesses stop referring their accounting firms. Through its April 2019 Accounting Firm Hire/Fire Index, surveyed 299 small and midsize business owners and leaders to ask them why they hire, fire, or do not refer their accounting firms.  

To see all the results for the 2019 Accounting Firm Hire/Fire Index survey, visit here for the report and infographic. The analysis of the findings accompanying the survey results includes advice from three leading accounting experts on how accounting firms can avoid losing clients.  

#1 Reason, as Listed by Survey Respondents: My accountant doesn’t go above and beyond for my company.

Businesses want to feel like their accountants are invested emotionally in their organizations. They want an accountant who is a true financial leader that guides them through the rigors of taxes, cash flow and more. Loyalty, enthusiasm, and going the extra mile trumps what they might view as “marginal interest” every time. Failing to display these attributes in any way leads to disappointment and dwindling referrals. 

Accounting firms may want to be involved at this level but struggle with a lack of staff members or resources which limits the time they can contribute to each client. Aaron Berson, CPA, CEO and co-founder of Fringe Advisory Co., recommends turning to technology to combat this challenge. 

“The best thing that you can do if you are in the weeds is to leverage more technology. When you rely more on technology, you get those lower-level, manual tasks off your plate. You’re going to free up your time and build your capacity,” comments Berson.  

#2 Reason, as Listed by Survey Respondents: My accountant doesn’t give strategic advice.

Imagine that you have a canoe and an oar and are told that Europe is your destination. However, there’s much more involved than dropping a boat in a body of water and paddling. Where do you start? How do you navigate? How do you get there in good health? You may find yourself stuck in a lake or setting foot on the entirely wrong continent.  

Companies know what their goals are (or have a good idea of them), but may lack the financial savvy to reach them. A growing number of them recognize the importance of an accountant’s advice to overcome challenges like launching new products, setting prices, opening new offices, reducing resources, and growing in general. The survey demonstrates that if an accountant doesn’t contribute on a strategic level, they will stop referring him or her.  

If a firm doubts its strategic contributions, expanding services to include client accounting services (CAS) can arm accountants with the data they need to enhance their advice. The transition also requires a change of perspective, according to Dixie McCurley, co-founder, and president of Trusted CFO Solutions. 

“We have to change from a historical mindset to a proactive, predictive mindset,” she suggests. “I think that we as accountants aren’t comfortable guessing. However, if you can see clearly that if your client had sold double the widgets in one area versus another, then you can tell them. You can explain it in ways that help them understand what the numbers mean, show them where they need to spend time in the future and create an action plan.” 

#3 Reason, as Listed by Survey Respondents: It takes more than one day for my accountant to respond to my communications.

How long is too long to wait? If you like keeping a robust referral network, one second past 24 hours. Polled companies said that if it takes more than one day for an accountant to respond to their outreach, they’ll stop referring them.  

Considering the impact finances have on businesses, taking any longer to acknowledge a query can lead to missed opportunities and lost revenue. Plus, slow communications can make companies doubt an accountant’s willingness to go “above and beyond” for their organizations.  

There are a variety of reasons that can result in slow response times, and most of them have nothing to do with an accountant firm willfully ignoring its clients. Messages can land in unmonitored email inboxes (for example an employee on vacation or who no longer works at the firm.) Staff members may think someone else is handling the request. The team may want to hold off on responding until they have a definitive answer for the client.  

Internal guidelines can help avoid the communications black hole, as well as a regular schedule for touching base.   

“Set expectations that team members respond to clients within a certain amount of time,” advises Christine Triantos, a partner at Anton Collins Mitchell. “Schedule regular face-to-face meetings or phone calls. If you’re not in front of them, you’re not building a consultative relationship, and it’s easy for them to disengage.” 

Learn more with the 2019 Accounting Firm Hire/Fire Index.

The 2019 Accounting Firm Hire/Fire Index explores why businesses hire, fire, and stop referring their firms. Download the special report that breaks down the survey results and includes advice from leading accounting experts. Short on time? Read the infographic that shows the top reasons companies leave firms. 

Survey methodology: The results are based on an April 2019 SurveyMonkey Audience quantitative study with a sample of 299 U.S. business owners and managers. It provides directional insight data only.