By Susan Muldowney

Bad news has been in high rotation since COVID 19 swept the globe in the early months of 2020. The economic impact of health-mandated shutdowns has led to redundancies, stand downs, pay cuts and business closures. It has made for some difficult discussions with staff and clients.

Is there ever a good way to deliver bad news?

Peter Knight FCA, founder of Sydney-based practice Knight Partners and Franchise Accounting & Tax, shares his advice.

1. Show some respect and compassion

New Zealanders dealt with a recession in 2008-2009 in the fallout from the global financial crisis, but Australians are facing their first recession since the early 1990s. Being in an economic crisis is new territory for a whole generation of accountants, many of whom have little experience in delivering bad news to their clients.

Knight says that for some business owners, losing their business is as devastating as losing a loved one, so you must deliver that news with respect and compassion.

“I was given some advice years ago that if you have to give a client bad news, give it as much respect as if you were attending a funeral,” he says. “Breathe, go slow and show empathy for their situation.”

Knight also suggests preparing notes to help you guide the conversation.

“You can become distracted if it gets emotional, so notes will help to keep you on track.”

“You can become distracted if it gets emotional, so notes will help to keep you on track.”

2. Don’t sugar-coat it

Knight also recommends getting straight to the point. “I had a client who was referred to me recently and it soon became clear that their business was past the point of [no] return,” he says. “There is no point in delaying the inevitable, so I recommended that the next time we met, we included a liquidator.

“Clients often know when there is bad news coming, so they just want you to get on with it.”

But you must ensure you have “exhausted all your options” before delivering the bad news, he adds. “You’d hate to find out there could have been an alternative you hadn’t thought of. Consider getting a colleague to run another set of eyes over the numbers.”

3. Remember that it’s not about you

Delivering bad news is tough, but it’s often part of the job, says Knight.

“Don’t tell the person that you’ve been losing sleep over it,” he says. “You’re not the one who is losing their job or their business. It’s not going to make them feel any better and it’s not about you. It’s likely to be an unpleasant conversation, but delaying it isn’t helping anyone.”

And as to your timing…

“Do it in the morning, so they have the day to digest it. And don’t do it on a Friday afternoon. That’s the best way to ruin a weekend.”

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