- Dealing with clients under financial stress will be a continuing challenge for CAs in 2021.
- CAs will need to think about dealings with clients who want to make payments over time, rather than upfront.
- As always, it pays to remain super-aware of your obligations under the Code of Ethics.
By Michelle Stevenson
Businesses will still be dealing with the pandemic’s economic fallout in 2021 and there will be challenges for CA ANZ members and their clients.
Kate Dixon and Rebecca Stickney, who head the CA ANZ professional conduct teams in Australia and New Zealand, say five key issues will demand particular attention:
- dealing with clients under financial stress
- managing conflicts where relationships are strained
- maintaining clear and professional communication
- adequately supervising staff
- managing your own workload and welfare.
1. Dealing with clients under financial stress
With businesses reeling from the economic fallout of COVID-19, some of your clients could be under financial pressure and be more fee-sensitive than in the past. You need to think about your dealings with clients who:
- want to make payments over time, rather than upfront and/or in full
- may be unable to pay all or some of their bills
- may be more likely to make complaints because they’re unhappy about fees.
The best way to deal with these sorts of issues is to have really clear engagement and billing practices.
“Review your letters of engagement and make sure they clearly set out the scope of the work, your fee structure, payment terms and what happens if bills are not paid or are in dispute,” says Stickney.
“Figure out the best mechanism for charging to make sure you do get the fees in the door. Should you move to monthly invoicing? Should you agree on a flat rate? And send detailed invoices in a timely way.
“Some clients are obviously going to be in really challenging financial or personal situations this year… Watch out that you’re not being asked to give advice in areas you don’t have expertise in, and be aware of any sort of restrictions on what you can do.
“Don’t be pushed into doing something inappropriate or misleading because you feel sorry for the client.
“Don’t be pushed into doing something inappropriate or misleading because you feel sorry for the client.”
“If you are going to allow payment over time, document the terms of the payment plan,” she advises.
“Depending on the size of the bill, you may want to seek some legal advice on how best to document the terms of any payment.”
If you are considering recovering fees from the client’s tax refunds, ensure you fully understand the Client Monies standards beforehand and have written authority to do so.
2. Managing conflicts where relationships are strained
A common situation is where a CA is acting for a partnership or a company with multiple directors – a husband and wife, for example.
“You might take instructions from only one of them, and that’s fine if it’s agreed and while everything’s going well. But it’s when those relationships deteriorate that you need to be particularly cautious,” says Dixon.
“You may be in a position of conflict as couples and businesses are splitting up or just having disputes. That may well happen in uncertain economic times.
“We often see members who recognise that they’re in a position of conflict way too late or, even if they do recognise it, they don’t take the appropriate steps to deal with it.”
As always, it pays to remain super-aware of your obligations under the Code of Ethics to ensure you’re responding to these situations appropriately.
3. Maintaining clear and professional communication
It’s absolutely crucial that you maintain clear communication – with clients, with staff, and with the public more broadly.
Make sure each client engagement letter is up to date and highly detailed so the client knows exactly what to expect. Even with long-standing clients, think about whether their engagement letter needs to be refreshed. This is particularly relevant where circumstances have changed.
Tone is also important. “Members have an obligation to act courteously and professionally even when their clients or others do not,” says Stickney.
4. Adequately supervising staff
As remote working becomes the norm, you must ensure staff are adequately supervised and supported, whether they’re working from home or in the office.
Staff should never be working in an area where they’re out of their depth, or signing off on work that hasn’t been properly reviewed.
“We had a recent case where an issue arose with the client’s work and the member said, ‘Dealing with that issue isn’t my job, it is someone else’s job.’
“Every time he received a communication, he handed it on to somebody else to deal with. However, he was the partner. And he did not check to see whether the issue was properly dealt with... The fact that he was busy is irrelevant,” says Dixon.
5. Managing your own workload and welfare
Finally, it’s important to be mindful of your own limits and capacity, not to mention your welfare and wellbeing. One way to manage your own workload is to stick with what you know.
“Don’t chase work where you are not across what you should be doing in it,” cautions Dixon. “Also, stress-test your quality control systems. We do have complaints where members don’t have good quality control – that’s when problems arise.”
“Don’t chase work where you are not across what you should be doing in it.”
Perhaps you let go of staff during COVID-19 and are taking on more work yourself. If that’s the case, be aware of how this may affect any timelines and take steps to manage this.
“It might be about communicating with clients about expected timeframes,” says Stickney. “Or it might be something pragmatic like contracting in some specific support or referring engagements.”
Call CAAG or check CA ANZ’s resources
The CA Advisory Group provides counselling and support for chartered accountants facing ethical dilemmas or weighing career decisions.
Local panels of experienced CAs offer guidance for fellow members and can provide counselling and support on a range of professional and ethical matters.
The CA Advisory Group service is free and all discussions are strictly confidential.
Call: 1300 137 322 (Australia) or 0800 4 69422 (New Zealand)
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