By Matt Patrick, CPA | Founder, Patrick Accounting.
How many times have you noticed a serious problem in a client’s business but stayed silent? Maybe you’ve watched a client make the same costly mistake month after month, all while still delivering their financials. When was the last time you told a client something they didn’t want to hear…but needed to?
If you’re like most accountants, you’ve convinced yourself that staying silent is professional courtesy when it’s actually professional negligence.
The gap between what your clients need to hear and what you’re willing to say could be costing them thousands. It’s also the difference between being an order-taker and being an advisor.
In this article, I’ll walk through six difficult, but essential, conversations every accountant must be prepared to have. I’ll show why avoiding them does more harm than good and how to speak the truth without destroying the relationship.
Why Accountants Avoid the Conversations That Matter
Here’s a common scenario:
- You see a restaurant client whose labor costs are running 15 points above industry standards.
- You notice a service business that’s been chronically underpricing their work for three years.
- You watch a retail client ignore their inventory problems month after month.
And you say nothing.
Why? Because it feels risky. You tell yourself:
- “It’s not my place to tell them how to run their business.”
- “They didn’t ask for my opinion.”
- “What if they get defensive and leave?”
- “I’m their accountant, not their business consultant.”
But here’s what you’re really saying: “I’d rather keep the client than risk making them uncomfortable by helping them.”
I totally get it. These conversations are hard. But when you avoid them, you’re watching your client slowly bleed money while you document the hemorrhaging in neatly formatted financial statements.
To be a truly valuable advisor, you have to care more about your clients’ success than their comfort.
The Real Cost of Being “Nice” Instead of Helpful
Years ago, a restaurant owner came to use after working with a tax preparer for a decade. During that time, no one had ever told him that his pricing was destroying his business.
We saw it immediately. His food costs were acceptable, but his pricing hadn’t changed in five years despite significant cost increases. He was essentially working harder every year to make less money.
In our first meeting, I asked him, “When was the last time you reviewed and adjusted your prices? You’re underpricing your menu by at least 15%. If you don’t fix it, it could put you out of business.”
He wasn’t angry. He was afraid. “My customers won’t allow me to.” I challenged this assumption and asked, are you sure or are you just afraid? After talking him through the math he said he would try and adjust a couple of items on his menu. He told me later, “I really appreciate you challenging me on this, I think I was just scared.” Now, he brings up every time he’s thinking about adjusting his prices again and is regularly looking at his food cost trends, which he never took the time to do before.
This restaurant owner lost years of profit because his previous accountant didn’t want to have an uncomfortable conversation.
Being nice isn’t the same as being helpful. Sometimes the kindest thing you can do for a client is tell them a truth they don’t want to hear.
Six Hard Conversations Every Advisory Accountant Must Have
If you’re serious about providing real advisory value to small business clients, these are the conversations you can’t avoid. Not all six will apply to every client, but at least one probably applies to every client you serve.
1. “Your pricing is too low, and it’s killing your business.”
This is the conversation I have most often with new clients, and it’s one of the hardest for business owners to hear.
They’ve convinced themselves that they can’t raise prices without losing customers. They’re competing on price because they don’t know how else to differentiate. And they’re working themselves to death for profit margins that wouldn’t sustain a lemonade stand.
What to say: “I’ve reviewed your pricing against your actual costs, and you’re underpricing by at least 10%-15%. At your current margins, one slow month or one unexpected expense could be a disaster.”
Why it matters: A 5% price increase can lead to 25%-50% more profit. You’re not helping clients by staying silent while they price themselves into poverty.
2. “Your family member or longtime employee is costing you money.”
This might be the most uncomfortable conversation on this list, but it’s also one of the most important.
We’ve all seen it. The owner’s sister-in-law doing inaccurate bookkeeping or the spouse letting invoices go unpaid because they hate confrontation.
What to say: “I know the person handling your bookkeeping is family, and I know they care about your success, but they’re making mistakes that are costing you money. Caring isn’t the same as competence, and this situation is holding your business back.”
Why it matters: Loyalty is admirable, but when it’s costing your client thousands of dollars a month, pointing it out is your job.
3. “You’re not looking at your financial reports.”
Month after month, you prepare detailed financial statements and send them to your client. And month after month, your client never opens them.
You can tell based on the questions they ask (or even better, don’t ask) and by the decisions they make that directly contradict what the numbers show. They have no idea whether last month was profitable.
What to say: “I’m spending significant time preparing financial reports that you’re not using to make decisions. Is it a lack of time, are you unsure what you should be looking at, or are you looking at something else? Let’s talk about it.”
Why it matters: You can’t advise someone who doesn’t look at the numbers. This conversation either opens the door to true advisory services or reveals that they’re not ready for it.
4. “Your technology investment doesn’t match your reality.”
Every industry has a “dream system” that business owners obsess over. For restaurants, it might be that new shiny POS, or some app their friend told them about. For contractors, it could be advanced job costing software. For service businesses, maybe it’s a comprehensive CRM.
The problem is, they’re still tracking time on paper while dreaming about enterprise software they’re not ready for.
What to say: “I know you’re excited about this system, but I’m concerned you’re not ready for it. We need to put basic systems and processes in place first. After that, we can talk about upgrading.”
Why it matters: Watching a client waste $20,000 on software they can’t effectively use is unfortunate…and preventable.
5. “You need to cut labor, even if it’s uncomfortable.”
Restaurant clients struggle with this constantly, but it applies across industries. They’re overstaffed because they’re afraid of being short-staffed. So, they resist cutting hours, even when sales don’t support the team size.
Meanwhile, their labor percentage climbs to unsustainable levels, and profit disappears.
What to say: “Your labor costs are 30% more than what we would expect to see. Why is that? I know you’re worried about service quality, but if you don’t get labor under control, you won’t have a business to staff. We need to talk about right-sizing your team.”
Why it matters: Labor is often the second-largest expense, and if it’s out of control, nothing else matters.
6. “Your processes are broken (and have been for years).”
“This is just how we’ve always done it.”
Nothing makes my skin crawl more than this statement, and unfortunately a lot of small business owners think this way.
What worked when the business had $500K in revenue doesn’t scale at $2 million. What was manageable with three employees becomes chaos with 15. But too many clients cling to outdated processes longer than they should.
You see it all the time:
- Payroll that takes 12 hours/week when it should take 30 minutes
- Inventory systems so broken that thousands walk out the door each month.
- AR processes so disorganized that clients are essentially giving interest-free loans to their customers
What to say: “I need to show you something in your numbers. Your cash collection cycle over the past 6 months has moved from X to Y. Or walk me through your routine as it relates to invoicing, collections, and follow-up. I think your process may be broken, and it’s costing you. What worked when you were smaller is breaking down now.”
Why it matters: Inefficient processes compound over time. What costs $10,000 this year could cost $50,000 in a few. The sooner you help fix it, the more you protect their bottom line.
How to Have Hard Client Conversations Without Burning Bridges
Knowing what to say is one thing. How you say it is what keeps clients listening.
- Lead with concern, not authority. Don’t position yourself as “the expert” telling them what they’re doing wrong. Be the partner who cares about their success.
“I’m seeing something concerning, and I care too much to stay quiet.” - Use data, not judgment. Hard conversations go better when they’re grounded in objective numbers rather than subjective criticism.
“Your profit margin is 8%, and the industry standard is 15%-20%. Let’s dig into why.” - Ask before telling. Clients often already know the truth but just haven’t admitted it. Questions can be less threatening than declarations.
“What’s kept you from raising prices, even as costs increased?” - Offer solutions, not just problems. Never walk into a hard conversation without a path forward.
“This isn’t working, but here’s what we can do about it.” - Do it privately. These conversations require a private, respectful setting. Pick up the phone or schedule an in-person meeting.
What Changes When You Start Speaking Up
Here’s what happens when you start having the hard conversations:
- Some clients leave. Usually, it’s the ones who only wanted an order-taker anyway. Let them go.
- Most clients respect you more. Business owners have plenty of people who tell them what they want to hear. You’ll differentiate yourself by telling them what they need to hear.
- Your value becomes obvious. These conversations are the difference between a $200/month bookkeeper and a $2,000/month advisor.
- You sleep better. It’s deeply satisfying to know you’re actually helping and not just watching clients struggle.
- Your practice becomes more profitable. Clients who see value pay accordingly. Those who don’t, move on.
One client told me years later, “You were the first person who cared enough to tell me the truth. You saved my business.”
That’s what advisory really looks like. It’s not always comfortable, but it’s always worth it.
A Practical First Step
If you’re thinking, “I need to do this,” here’s how to start:
- Pick one client with a clear problem and a solid relationship.
- Choose one conversation that would have the biggest impact.
- Schedule a call. Don’t squeeze it into another meeting. Make it intentional.
- Prepare your opening. Write down how you’ll start the conversation and practice the first 30 seconds.
- Have the conversation. See what happens. Learn and repeat.
The first one is the hardest. By the tenth one, you’ll wonder why you ever avoided them in the first place.
The Advisory Work That Actually Matters
In 20+ years of running an accounting firm, I’ve held on to this one simple principle: Tell clients what they need to hear, not what they want to hear. It hasn’t always been comfortable. I’ve worried about losing clients, and I’ve second-guessed my approach.
But I know for certain that by telling our clients the truth, we’ve given them the best opportunity to thrive. The hard conversations are where real advisory work begins. Everything else (bookkeeping, tax returns, financial statements) is just foundational. The conversations are where you actually change outcomes.
Your clients don’t need another order-taker. They need someone brave enough to speak up. Because sometimes, that’s exactly what will save their business.
Recommended Articles
====
Matt Patrick, CPA, is the founder of Patrick Accounting, a Memphis-based firm specializing in small business accounting, tax, and advisory services. Since 2003, Matt has been helping small business owners get “one step better: through practical, incremental improvements that compound into major transformation. The firm also hosts the “One Step Better Business Podcast,” where Matt shares insights on building thriving small businesses. Connect with Matt on LinkedIn or visit patrickaccounting.com.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Tags: Advisory, Firm Management, Small Business
