A RELATIONSHIP with a client has slowly gone south, and while not totally finished, it is certainly in intensive care.
For a couple of years now the client has been high maintenance. Although part of the monthly fee is on standing order we have built up a fairly sizeable debtor balance with them.
His business has never really taken off the ground despite it having a good local image and brand awareness. It’s a classic case of ‘fur coat and no knickers’.
Customers and passers-by will think it’s a successful growing business, but in reality it’s loss-making and being propped up by suppliers who are patiently giving extended credit terms to unwittingly keep the business afloat.
As with most things though, things always come back to bite you in the bum, and in this client’s case he has reached the end of the road. Suppliers are now taking their debt to the solicitors, who are in turn chasing hard.
As a firm we have gone the extra mile, put him in touch with clients who may have been willing to invest, set up meetings with finance houses, as well as look for potential suitors to sell to…Not to mention the extra work done and not charged for.
The blame game
Of course, now that things are starting to go sour suddenly we are to blame. Why do people have such short memories? In the past he has blamed the staff, and he has hired and fired accordingly.
There’s only so much you can take as an adviser, and at the end of the day the work needs to be profitable. In all honesty if we sat down and reviewed the WIP and the amounts billed we would be at a large loss.
The firm have been happy to support the business in the hope that things will turnaround but it’s pretty clear to us now that the business is never going to work. It’s not the staff’s fault, it’s not the banks fault, it’s not our fault.
It’s the client’s fault.
The Practitioner’s uncensored thoughts come from within their own practice – having left a regional firm in the heart of England
Paul Eagland speaks to Accountancy Age ahead of taking the reins as BDO managing partner in October
This is the latest office to open in Wilkins Kennedy’s south region, which now covers the whole of Kent
Carl Reader looks at how the changing nature of business is impacting independent practices
Big Four firm leverages power of blockchain technology to give customers a universal ‘digital identity’