Helping Clients Pivot after a Loss of Income

Accountants often become part therapists when helping a client through a financial crisis with their business.  Whether your clients are individuals or one of PA’s many small businesses, challenging events can significantly impact their income, and you, as a CPA or accountant and their trusted financial advisor, should be prepared to recommend options to get them back on stable footing.

A small business with limited contracts or a few major customers may be financially devastated if one is lost. Your client will want to find ways quickly to recover the lost income, but this can be challenging. As the company’s accountant, you can be instrumental in helping them brainstorm strategies to move forward and remain solvent during the transition. 

Review financial records to determine where the company can cut back expenses while its revenue is reduced. Cutting employees should not be a first option, since people’s lives depend on their jobs, but it might be necessary to consider temporary layoffs while the company works to recover revenue. 

Help the company’s leadership brainstorm alternative streams of income. There may be parallel products or services that the client can begin to offer. If the company reaches out to current or previous satisfied clients, they could discover additional ways that they can help them and expand their relationship. Help the leadership plan a broader service portfolio so that providing a variety of products or services will help limit the future financial impact of the loss of one contract or client. 

Job loss: Individuals who lose their jobs can panic, wondering how they will make ends meet. In an age of online resume submission, it can be very difficult to beat the algorithms and land an interview, let alone a new job. Be prepared to give your client a few suggestions or put them in contact with people who can help.

Encourage your client to join networking groups and find a good career counselor. Career counselors can be expensive, and your client may not feel like spending the money, but it’s almost essential in this market to have an advisor who has remained current with job search methods and can help your client revamp his or her resume, develop interview skills, and find the best job opportunities. Headhunters in your client’s field can also be valuable resources. Many headhunters are paid by the company when it hires a person, although some work for the job hunter directly.

If you have many clients who are individuals, connecting with several high-quality career counselors and head hunters to whom you can refer your clients when they are job-seeking will be valuable.

Divorce: Divorce is sadly a common event in many people’s lives. This can significantly impact your client’s financial position. Your client will need your help through the process of collecting and evaluating income and expenses for the purpose of dividing the household. Read more about how to navigate that situation in our news item titled How to Help a Client Who Is Divorcing.

While passing on the name of a career counselor is a simple courtesy you should be ready to offer your clients, more involved services should not be gratis. Your best strategy is to develop service packages. Being prepared with clear pricing and a list of services in the package could open up a new revenue stream for you, even as you’re helping your clients open their own new revenue streams. It’s a win-win.

Develop a package intended to help business clients explore new options and increase revenue. Any of your business clients may want to take advantage of such a package, not just those who lose a contract. Market it to all of them so that they know it is available and offer a free consultation (with a time limit of 15 or 30 minutes) to determine if it is right for them. Many of your business clients will probably want to take advantage of it at some point.

You may also want to develop a package to help divorcing individuals or couples. Divorce negotiation requires a very thorough review of the financial position of the family as well as calculations of future income, valuation of services rendered by an at-home spouse, possible need for forensic auditing, and more. Offering such a package could not only benefit your existing clients but could draw many more clients who will seek out your expertise.

If you need some suggestions on how to put some of these packages together or how to help a client through a specific challenge, reach out to our PSTAP membership community for advice. One of the benefits of being a member of PSTAP is the strong community of accountants and CPAs across Pennsylvania. If you’re not a member, join today at PSTAP.org/membership-information.