When you decide to disengage from a client, it is important to be clear on the process and implications this will have. Disengagement from a client usually involves ceasing to provide services to them, and this can have a variety of consequences including financial, legal, and ethical considerations. 

Financially, you must be clear on what will happen to any payments that have already been made and any outstanding invoices that remain unpaid. 

Legally, you must be aware of any obligations you have to the client, and the legal implications of breaking those obligations. 

Ethically, you must be aware of any professional codes of conduct you may have signed up for, and what consequences might arise from disengaging from a client. It is also important to be clear on the process of communication and notification that must be followed when disengaging from a client. 

You must be sure to provide the client with all the information they need to make an informed decision and to ensure that the disengagement process is handled in a professional and respectful manner. 

Leaving things unresolved can harm your reputation and can lead to legal or financial complications down the line. If you do decide to disengage, reach out and have an honest conversation with the client, outlining any remaining tasks that need completion, explaining why you must part ways, and offering referrals or recommendations for other professionals who may be better suited to meet their needs moving forward. 

Remember: how you handle disengagements can impact future business opportunities, so stay professional at all times!

This article can be used as a checklist as it summarises all the main actions you need to take to be able to disengage from a client in a professional manner.

Send a disengagement letter

When you decide to disengage from a client, it is important to do so in a professional and respectful manner. One of the best ways to ensure that your relationship ends on a positive note is to send a disengagement letter.

What is a disengagement letter? 

A disengagement letter is an official notification that you are closing your professional relationship with the client. It also serves as a formal agreement between you and the client that the services you provided have been completed and that all financial obligations have been fulfilled. 

The disengagement letter should be written in a professional manner, clearly stating the date that the services have been completed and the date that the relationship will end. It should also include any additional information that is relevant to the nature of the relationship, such as contact information for other professionals that may be of assistance to the client. 

Additionally, the letter should thank the client for their business and express your appreciation for the opportunity to work with them. Sending a disengagement letter is the very first thing you must do when you disengage from a client. Doing so will help to ensure that the relationship ends on a positive note and that both parties have a clear understanding of the agreement.

What should be included in the disengagement letter?

Here’s a quick checklist for drafting a letter of disengagement:

• Confirm why the accounting firm is ending the relationship
• Confirmation of the amount due or payable
• Confirmation of any retainer or payment of any advance fees
• A list of any  final responsibilities the accountant should handle
• Outline of all important deadlines that must be followed
• Any conditions upon which the firm may keep representing the client

An example of disengagement letter wording can be found in the previous blog.

Return all records of which the client is the legal owner

Once you have completed the first step in disengaging from a client, which is to notify the client of your intent to discontinue the relationship, the next step is to return all records of which the client is the legal owner. This includes any physical or electronic records, documents, correspondence, or other items related to the client that are in your possession. Make sure to provide a complete and up-to-date inventory of the records being returned and ensure that they are returned in a timely manner.

If you are returning physical records, make sure they are securely packaged, labeled, and shipped. If you are returning electronic records, make sure to provide a secure method for the client to access their data. If you have stored the records on an offsite server, make sure the client has the access credentials necessary to retrieve them.

Once the records have been returned, document the date and method of the return. This is important to ensure that the client has received the records and that all necessary steps have been taken to protect the client’s data.

By following these steps, you can ensure that you are properly and securely returning all records to the client and that the client is able to access any data that is rightfully theirs. This is an important step in properly disengaging from a client and maintaining a positive relationship.

Respond to any requests for clearance regarding the work you have done

When you disengage from a client, it is important to take the necessary steps to ensure both parties are clear on the terms of the disengagement. This includes responding to any requests for clearance regarding the work you have done for the client. 

If a new accountant requests clearance on the work you have done, you must provide the relevant documents and information that demonstrate the work was completed satisfactorily and in accordance with the standards of the accounting profession. You should also review the client’s accounting system and document any changes or updates you have made to it. 

Additionally, you might also need to provide a statement of assets and liabilities, any notes or documents you used for the project, and any other relevant information about the client’s financials. 

Lastly, you should provide a summary of the overall project, including any recommendations you made and how the client benefited from your work. By taking these steps, you can ensure the departing accountant is able to take over the project and the client is satisfied with the work you have done.

Keep your own client file

When you disengage from a client, it is important to keep your own client file for at least 7 years. This is an important part of your practice and can help protect your business from potential liability. It is important to properly document the entire professional relationship so that you have a record of the services you provided and any other relevant information.

Keeping a client file helps you to identify important documents such as contracts, invoices, and any other important communication. It is also important to store the client file securely and confidentially to ensure that all of the information is kept private. 

Additionally, having a well-organized client file can help you to easily access the information you need when you need it. Furthermore, keeping a file of your work with clients can help you to review your own performance and determine ways that you can improve. 

Keeping your own client file is an essential step in successfully disengaging from a client.