Putting off awkward client conversations is costing UK accountants nearly £70k each year

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New research by Ignition uncovers the financial and human cost of avoiding or delaying awkward client situations in the professional services industry

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London, UK, August 23rd — According to 85 per cent of accountants and bookkeepers surveyed in a new report, unrecovered out of scope work is costing UK firms on average £69,957 each year. What’s more, by putting off awkward client conversations, a third (33%) say their mental health has suffered as a result. 

The new findings in the ‘2022 State of Client Engagement’ report from Ignition, the world’s first client engagement and commerce platform, shine a light on the financial and human cost to accounting and bookkeeping firms by avoiding or delaying awkward client conversations. Conducted by YouGov, the study interviewed 470 key decision makers in accounting and bookkeeping firms with 1-50 employees in the UK. 

“If you work in professional services, chances are you’ve experienced an awkward client situation,” said Emma Crawford-Falekaono, Managing Director, EMEA at Ignition. “Accountants and bookkeepers are putting off these awkward conversations as they’re worried about their clients' reaction or losing their business. What we now know is that this has the opposite effect, with detrimental impact to the firm and its people.”

Awkward client situations a mainstay in the professional services industry

Awkward client situations are more common than we think. Nine in ten (90%) UK accountants and bookkeepers have encountered an awkward client situation, naming the following as the most awkward:

• 62% having to chase clients for late payments
• 58% advising clients that the work they have requested is out of the agreed scope
• 45% finding errors in client proposals or engagement letters which have been sent manually

Avoiding or delaying awkward client conversations is the norm

In the UK, 74 per cent of accountants and bookkeepers said they have delayed or avoided having an awkward conversation with a client, including 54 per cent who said they were trying to improve or maintain the client relationship. According to respondents, the top barriers to having an awkward conversation are:

• 36% are concerned about the clients’ negative response or reaction
• 25% lack the confidence to confront the client
• 20% lack the skills need to negotiate with the client

More surprisingly, a third (33%) of accountants and bookkeepers have gone as far as to write-off all or part of an invoice to avoid having an awkward conversation with a client. When managing increases in the scope of client work, the same percentage admit they absorb the increased time and costs themselves which can quickly accelerate over multiple projects or clients.

Avoiding awkward client conversations incurs financial costs

By putting off awkward conversations, accountants and bookkeepers in the UK have traded short-term comfort for the long-term health of their firm. The top financial and business consequences include:

• 38% experienced a loss of potential income for the business
• 28% saw a negative impact to the quality of the work
• 25% faced cash flow pressures

On average, accountants and bookkeepers in the UK estimate that out-of-scope work that hasn’t been fully billed is costing their business £5,830 each month. That equates to nearly £70,000 each year. In addition:

• 85% experience late payments
• 28% of client invoices are paid after the due date on average
• On average, client invoices are 32 days overdue

Crawford-Falekaono adds, “In a high inflationary environment, where cash flow is a vital ingredient for business survival, firms can no longer afford to put off these client conversations or leave their outstanding payments to chance. The study also reveals it is contributing to a culture of overworking and burnout, which is concerning amid ongoing talent shortages in the UK.”

Avoiding awkward client conversations is taking toll on mental health

Of accountants and bookkeepers that avoided or delayed awkward client conversations, a third (33%) said it had a negative impact on their mental health and others in the practice. They also report:

• 35% loss of time with family and friends, and forgoing social events
• 30% low morale and 28% resentment among staff members
• 26% staff have quit and businesses have difficulty in retaining staff

To protect their firms, their people and their client relationships, professional services can better support their practices with tools that make awkward client situations easier to navigate.

You can read the full report here: ignitionapp.com/uk/state-of-client-engagement

Press contact: Luke Cuell, Ignition Global Marketing Communications and Public Relations Lead; +61 (0) 458626578