Best Practices for Acquiring Clients

By Mike Shost, CPA, CGMA, President & Director - Shost & Company, P.C., CPA’s

October 27, 2017

best practices for acquiring clients


As an owner in a firm for the past 30 years, I have learned many lessons – some of them the hard way. One big lesson I learned is in regard to taking on clients. Agreeing to accept a client who is out of your reach (due to capacity, scope of work, complexity, or a host of other reasons) for the sole reason of adding business is almost always a bad idea. My experience has led me to understand fully the cost and risks associated with this practice. 

“Ideal” client communication

Over the years, I have finely tuned the picture of my perfect client. Our firm focuses approximately 50% on accounting/QuickBooks services for small businesses and the other 50% on tax compliance/planning services for those businesses. In our monthly firm meeting, I remind the staff that the firm is always looking for new business and I provide a clear picture of what that client will look like (i.e., businesses with ongoing monthly accounting needs and that need tax preparation and planning services). A Form 1040-only client or a publicly traded company does not fit the model of the firm.

Steps of client acceptance

When a potential client calls or emails us and is interested in learning more about becoming a client, several processes happen:

Initial communication

Normally, there is a phone call with my assistant that starts the fact gathering on the potential client.  She asks questions about what kind of services the potential client is interested in, and requests information such as financial statements, prior year tax returns, and any other pertinent information to help “pre-qualify” the potential client as a good fit for the firm. An in-person meeting, if possible, is also scheduled.


This step is much easier than it used to be. There is a great deal of information available on a business just by “googling” the business. For example, in preparation of a recent client meeting, I learned about a pending lawsuit settlement by doing this. Also, information is gathered from the company website to help us understand the business better. Another important step for me is to check the State Comptroller website to ensure that the business is in good standing. And if I am familiar with the prior CPA, I might consider giving him or her a call to see what kind of information he or she can provide.


This meeting is about the potential client finding out about my firm and what we can offer, but it is also very much about discovering information about the business to determine if we would be a good “match." It is vital to ask direct, hard questions.

Another topic to address head on is billing. I have a current client who loves to tell this story: We were in our initial meeting and discussed how the business was delinquent with several years of tax returns and that they had just gone through bankruptcy. I asked him how he could afford to pay my bills for these services if all this was happening. Thankfully, we were able to help them get out of the bad situation, and he is still a client, but at the time, I was most concerned about whether we were going to get paid for the services. 

Another helpful tip is to be honest about your firm’s skills and abilities. Even if by doing so, it means that you may need to refer the work elsewhere, it is not in the best interest of your firm to make promises that you know you cannot deliver.

Evaluate information and identify red flags

The time to evaluate the information to decide whether to pursue the engagement is after you have reviewed the materials and held a meeting. Red flags for me are:

  • Is the business not current with the state or with tax return filings?
  • Does the individual have a healthy respect toward the IRS?
  • Has the business been jumping around between CPA firms?
  • Is there any indication of over-aggressiveness towards bending the rules or hinting at fraud?

Client acceptance procedures are most important at the beginning, but the evaluation of clients is an ongoing process. It is a good time now to evaluate your client list and disengage with those clients where circumstances have changed, or if you have tried and failed to take steps to improve the relationship. The Tax Section has a client termination checklist to help guide practitioners through the process of removing clients from their database, archiving files, and improving client communications as well as a sample client termination letter.