Welcome to Tax Season and by the way, You’re Fired!

In another lifetime I once interviewed the former head of a hotel chain whose properties were largely franchised. He was a no-nonsense Austrian with an uncompromising work ethic and an obsession with quality. And he had this simple rule for all those who operated under his brand. At the end of the year he would produce a ranking of all the properties in terms of cleanliness, service, guest feedback etc.

Those hotels that fell in the bottom 10 percent of the ranking would have their franchise rights to the brand immediately taken away and politely told to pursue other opportunities. The same held true for the top-level executives.

But to be fair, he applied the same criteria to himself. If his ranking fell below a certain pre-determined level, he would voluntarily resign.

I guess it comes as no surprise that he never had to exercise that drastic option. In fact, when he did resign it was only because one of the top global hotel chains offered him a “can’t refuse” post at nearly double his salary.

Which brings us to today’s related topic.

Even though we’re still a few months away from tax season, this is probably the time – or past time - for most firms to perform either a formal or impromptu ranking of their clients to determine which ones are worth keeping and which ones are probably more trouble than they’re worth going into 2014.

Over recent years, there’s literally been a paper mill of articles that outline and define client quality – the A, B, and C rated clients for example, or my favorite – an average client – which is accurately described as the midpoint where the worst of the best meets the best of the worst. And what to do with them.

But as you slowly prepare to get ready for tax season with to-do lists covering areas such as technology applications and staffing resources, your client list probably deserves a refresher look as well.

There can be a number of reasons to jettison a client, some of them painfully obvious – such as in a case where it frequently takes hiring someone like Duane the Bounty Hunter to collect your fee. Or, if you discover your client has kept more sets of books than Tony Soprano.

Agreed, those are pretty much no-brainers on the road to wishing them good luck in finding another CPA.

But other factors may be harder in reaching a final determination. What about someone who assumes he/she is the only client you need to devote attention to and treats both you and your staff like a deckhand on an unlicensed frigate?

What about someone, who no matter how much you go out of your way to satisfy – never is. Gee, I’m sure many of you have never encountered that type before.

It’s also highly doubtful those types of clients will go out of their way to give you a referral. And all of you who don’t think referrals are important please raise your hands.

Thought so.

In a shocking coincidence I received a notice from my accountant this week that his preparation fees will be going up for the 2014 season.

You can imagine my relief that the announcement of the price hike wasn’t accompanied by a brief note that read something like: “Thanks for your business over the past 17 years but I regret to inform you that….”

I guess I’m still an A client!