Top 5 Reasons Why Customers Leave Their Accounting Firm 

In the dynamic realm of accounting, retaining clients is paramount. Uncover the key reasons customers leave their accounting firms and explore strategic solutions for bolstering customer loyalty.

Whether you are a freelance accountant or running an accounting firm, retaining your current customers is just as important as acquiring new ones.  

The acquisition of a new customer can easily cost you 5 times more than working with a current customer and that is one of the reasons why giants like S&P Global, Deloitte, and EY spend millions of dollars to improve their customer retention rate. These companies use various strategies to understand the behavior of their customers to offer relevant and lucrative incentives.  

Like for every other business, customer retention plays a vital role for accounting firms and freelance accountants. It is a secure revenue stream that you can realize without having to invest heavily in marketing. To avoid losing customers, you must first understand why customers stop working with you in the first place. 

Why do customers leave their accounting firm?

Customers often depart due to price hikes, unmet needs, poor service, lack of responsiveness, and outdated technology. To retain clients, transparent communication on pricing, understanding evolving needs, providing quality service, personalized communication, and adopting modern technology are essential strategies.

Top 5 Reasons Why Customers Leave Their Accounting Firm

1. When You Increase the Pricing  

Price increase is one of the major reasons why customers start considering other accounting firms. That is because most small businesses have a fixed budget for outsourcing their accounting and tax services, and any price increase above their budget can demotivate them.  

Therefore, instead of an abrupt price increase, you should adopt a data-based and value proposition approach that your clients can relate to. Here is how you can do that: 

Check whether your competitors have increased the prices  

Thoroughly analyze the financial situation of your clients to see how much price increase they can afford  

Produce a story and communicate the increase with your clients. For example, you can cite the reason for the increase and add something like: “Our new prices will allow us to better serve you and our new customers.”  

You can also implement the increase in steps to see how it goes. To do that, you can either implement 50% of your planned increase on all services or increase the prices of selective services only. Also, tell them in advance about the price increase and give them the option to still purchase your services at the previous prices. When the customer is given a choice, it is always better.  

Additionally, you can communicate what value you can add to your services with the extra revenue. For example, if you plan to invest in digital tools that will make you more efficient: let them know. 

2. When You no Longer Address Their Needs  

While a business may initially hire you for bookkeeping services, things change as the business grows and the business would require other related services such as tax filing, advisory, and financing services. Even if you are doing a wonderful job — Managing the books, they would still look for alternative accounting firms or freelance accountants just to get everything done from a single place.  

Therefore, if you want to retain those clients, make sure you understand their needs and offer relevant services.  

One way to market your new services is to offer them a FREE trial of the services that they have not tried yet or offer those services at discounted prices. This will help you improve your customer retention rate.  

3. Lack of Good Service  

We all love to hire efficient professionals and your clients are no different. If you provide quality services, they will keep using them. However, the moment they feel a drop in the quality of your services, they will start looking for alternative service providers.  

Specifically, it is common for small accounting firms and freelance accountants to lose customers due to quality compromises. That is because they do not have the technical and human resources to deal with multiple clients as their business grows.  

Moreover, they risk missing important deadlines and specific requests from clients due to the increase in workload. To effectively manage multiple clients, you can use Automa8e — An all-in-one cloud accounting solution that can help solve the problem of workload by creating a system that automates accounting tasks.  

Our cloud solution is specifically helpful for accounting firms and freelance accountants to increase their productivity.  

From automating routine tasks such as bookkeeping and inventory management to automating things like taxation, Automa8e can significantly reduce the time, workforce, and effort involved in both routine and one-off accounting tasks. This helps you adopt a proactive approach and focus on serving your clients better.  

4. Lack of Responsiveness  

If responsiveness does not strike you as a solid reason for customer churn, you may be looking at it from a whole different spectrum. Specifically, lack of communication, the inability to respond to customers’ queries fast due to the large volume of daily workload, and not keeping your clients on board in various events can deteriorate your relationship with the client eventually.  

Many businesses complain about customer churn even though they have a regular mailing system.  

The reason is that it is not about how many emails you send each week. It is about how well you understand your client’s needs and how well you address those needs. Therefore, instead of solely relying on robotic emails, you should provide a customized customer support experience to your clients.  

Additionally, you should arrange 1-1 sessions with your clients to know more about their business activities and expansion plans. This will help you predict the services that they might need in the future.  

5. When You Are Not Keeping Up with Technology  

If you are still using old-school techniques and software to carry out tasks, it is about time you adopted a modern digital infrastructure.  

Clients hate to wait for days when they ask for updates about their cash flow and other financial matters. Therefore, every accounting firm and freelance accountant would benefit from having cloud-based accounting software. Automa8e is an all-in-one cloud solution that can generate real-time reports in no time, and you can access and forward to your clients anywhere by having an internet connection.  

Moreover, the data of your clients is securely stored in the cloud, which eradicates the risk of losing essential data. Therefore, you should invest in technology and digital tools that can speed up your work, provide more value to your clients, and adhere to their digital needs.  

Key Takeaways:

• Customer retention is crucial for accounting firms, offering a secure revenue stream.
• The top reasons for customers leaving accounting firms include price increases, unmet needs, poor service, lack of responsiveness, and outdated technology.
• Strategies to retain customers involve transparent communication on price changes, understanding and addressing evolving needs, providing quality service, personalized communication, and embracing modern technology.

In the competitive realm of accounting, retaining clients is paramount. Discover the top 5 reasons customers leave their accounting firms and how to combat them. From strategic pricing to addressing evolving needs and leveraging modern technology, learn the key insights for bolstering customer retention.

The ability to retain customers makes an organization stand out from the competition. Being in the competitive accounting and finance niche, you should work closely with your existing customers and provide them with a customized experience which might take a lot of time.  

 About Automa8e: 

Automa8e is an AI-powered accounting software and document management solution that empowers businesses in Singapore by delivering invaluable information and practical guides for a wide range of business functions and day-to-day operations. At Automa8e, our mission is to provide businesses with the knowledge and insights necessary to make intelligent decisions, enabling them to thrive and succeed. We are committed to sharing valuable information and aim to be the trusted partner that empowers businesses to achieve their goals through informed decision-making. With our comprehensive suite of tools and resources, we are dedicated to supporting businesses in Singapore on their path to success. Schedule a call now and discover how Automa8e can add value to your business.