Advice to CPAs with Struggling Clients: Don’t Be Too Nice

CPA firms have helped their clients get through the COVID-dominated spring and summer, but now that cooler weather is here and the possibility of a new infusion of stimulus money is a question mark at best, the possibility of more business failures is starting to look very real.

Tens of thousands of restaurants, bars, retailers and other small businesses have already closed, but those on life support may not make it through the months of cold weather that will curtail some of the activities that kept them going.

Al Fennell III, a vice president at Aon, which covers CPA firms and provides risk advisory services, says CPAs have an incredible desire to help their clients. He cautions, however, “Slow down and question what that help equals from a risk perspective.”

Fennell also offered a few dos and don’ts associated with handling clients who are fighting to keep their doors open.


  • Make Engagement Letters Crystal Clear – If anyone should know the state of a client’s finances, it’s their accountant, but constant communication is key. “A lot of the clients are laying off staff, which puts pressure on the CPAs. One of the things I make sure they consider is they should have an engagement letter that is providing a clear understanding of what their role is,” Fennell says.
  • Document Everything – In tough economic environments, all conversations and questions must be memorialized. Send an email summarizing the discussion and actions that were agreed upon, Fennell advises. “If something bad happens, the attorneys will want to know what the documentation is.”
  • Stay Ahead of Client Needs – Make sure a plan is in place with guidelines on when certain business decisions should be made: when to seek additional financing, when to put limits on what the business offers, when to close up shop, etc. Update the client engagement letter as needed. Communicate frequently.
  • Inform All Owners – When dealing with businesses with multiple owners and investors, make sure every one of them is privy to the information you’re providing and make sure they understand it fully.


  • Take On Too Much As a Way to Help When clients are under pressure, they may start leaning on their CPA to take on bookkeeping or other tasks. “They may end of falling into a role where they’re picking up management-type responsibilities,” Fennell says. “That’s a fine line they have to be very careful of.” If clients ask CPAs to answer questions or take on responsibilities that are outside of the scope of the agreement, the firm should politely let the client know.
  • Expect Relationships to Remain Unchanged With long-term, trusted engagements, interactions can be too casual, Fenell says. A short-on-details communication style that was never a problem in good times can backfire in bad times. “Under financial stress, relationships change dramatically,” Fennell says.
  • Assess and Reassess Risks – Lawsuits increase in financially depressed times. Ensure insurance coverage and data protections are adequate.
  • Take Your Eye Off Fees – Accountants can sometimes give in to their desire to help clients and overlook payment issues. The engagement letter should outline late payment policies. While some situations may call for giving a client additional time to pay, firms that are disciplined typically maintain strict procedures, Fennell says.

Fennell, who has been working with accountants for over 30 years, says that they’re exhausted. In addition to going above and beyond for their clients, helping with Payroll Protection Program applications and loan forgiveness, and dealing with an extended tax season, their own businesses are changing. Firms are pressured by the immediate switch to remote work, the need for heightened data security and a range of other transformations that were forced upon them.

However, accounting is a compliance-driven profession, so they are well suited to apply rules and regulations to themselves to keep their firms on solid ground. “They’re self-motivated,” Fennell says. “They live in a rules-based world.”