From XU Magazine, 
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How To Deliver Bad News To Your Clients

January 22, 2021

No client wants to hear bad news, and no Certified Public Accountant (CPA) firm wants to deliver it. But there’s an art to giving clients bad news in ways that help them understand the issues at play without being intimidated by them and presenting solutions at the same time that make clients feel empowered and equipped with a sense of direction.
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The wrong way to deliver bad news

The easiest way to kill a client’s motivation to turn things around is by allowing blame to creep into the analysis. Clients who feel as if the issues of management, financial literacy and cash flow are being presented as failings will either go on the defensive or shut off entirely, effectively cutting you off from delivering your message.

It is important to remember that even if a client has been the main hand in their own disorganization and business failings, they need to come away from any meetings with you feeling as though the problems are solvable and they have an opportunity to play a central role in solving them.

Effective, solution-based communication

Communication forms the other side of the coin – how to deliver bad news the right way.  

When it comes to poor cash flow management, CPAs have a responsibility to diagnose where the failings in the system are and create solutions that address each one appropriately. Often, this won’t be a case of analysis followed by one meeting with a client at the end to explain everything.

It will require co-ordination and co-operation between client and CPA throughout the process – be it in requesting certain datasets, asking questions about on-the-ground operations and getting the client involved in creating an accurate timeline of events and policies.

Priming a client to be a proactive party in finding the problems and creating the solutions creates smoother communication channels and keeps the focus on a positive outcome.

Empowerment through education

Part of delivering bad news is to educate clients on what each main facet of the breakdown means. Education in the delivery phase has several key benefits, starting with removing the intimidation factor of huge data sets or seemingly insurmountable cash flow issues like bottlenecks and scrambled bookkeeping.

A client who understands the problem is more likely to focus on the solution. Similarly, a client who understands the problem requires less step-by-step explanation the deeper into the cash flow breakdown you go, saving time and labor resources for where they’ll be needed most – creating a cash flow management structure to pull them out of their bad habits and push their business in the right direction.

Support Tools

CPAs shouldn’t be the only tool available to clients looking to break bad habits and manage their cash flow, simply the human element that facilitates short and long term solutions. Software like Dryrun offers valuable tools that CPAs can integrate into their clients’ cash flow management strategies, boasting streamlined tools like invoice and bill tracking, trajectory programs like auto-forecasting of future cash flow and great manual control and flexibility to allow clients to adapt to scaling needs.

Bad news doesn’t have to feel like a death blow. Delivered in the right way with the appropriate tools and a mind-set focused on solutions, clients can come out of even the tensest debriefs with direction and a growth strategy that prevents future jeopardy.

Why leave it there?

To learn more about DryRun

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