When you own an accounting firm, you deal with other people’s money on a regular basis. This can lead to conflict if a client thinks you are negligent or that you have mishandled the account. While you cannot control your clients’ behavior, there are several ways you can minimize the chances of being sued for malpractice.
Practice the Basics
The more experience accountants have, the more confident they become with day-to-day tasks. This confidence, ironically, can lead to some basic mistakes that can cost clients money and put your firm at risk. It’s a good idea, therefore, to have checklists for every process your firm performs. This can serve as a great training tool for new hires but also as a helpful reminder for those who are more experienced.
Learn the Industry
Financial ethics and rules can differ according to industry. It’s hard to handle an account if you don’t have a basic understanding of how their business runs. As any finance expert witness can tell you, knowing your clients’ industry can help you navigate the particular eccentricities of their field. This can help you avoid mistakes or misunderstanding.
Set Clear Boundaries
When you are charging by billable hours, it can be confusing to clients who want a set price. During the consultation, be transparent about the services you are providing and exactly how the client will be billed. It is also a good idea to draft and engagement letter to put all the terms to which you agree in writing. That way, both you and the client have written proof of your agreement.
You likely hired the accountants at your firm because they are good at what they do. You can protect them and yourself from potential legal hassles by making these tips standard practices in the way your firm does business.