How to part ways with a client: a playbook for accounting firms

Best answer. Walking away a week before a lodgment deadline leaves the client exposed to penalties and leaves you with a decision you would have to defend. Settle which jobs you will complete before you pick the date.

Not the best move. With a week to go and nothing started, the client may well miss the deadline, and the timing of your exit would be hard to justify to them or to the Tax Practitioners Board.

Reasonable, but not the best. This protects the client, but an open-ended promise means the relationship never really ends. List the open jobs and choose which ones you will finish.

Best answer. With no terms to follow, the open work and what is owed are the best guide to a fair end date. Updating your standard letter afterwards makes the next exit easier.

Reasonable, but not the best. Changing your standard letter now does not change what this client signed, so waiting gains little and drags out a relationship you have decided to end.

Not the best move. Claiming a term that is not there is misleading, and anything you put in writing will be read against the letter the client actually signed.

Not the best move. Tax practitioners generally cannot keep a client's own records, such as source documents and ATO letters, as leverage for unpaid fees. Those go back promptly whatever is owed.

Best answer. Settling the figure before you speak to the client means you are not making money decisions mid-conversation, and the letter confirming the exit can state the fees clearly.

Not the best move. The letter confirming the end of the engagement should cover fees, so you need the figure before you write it.

Best answer. Hearing it from you, followed by the details in writing, comes across as a decision made with respect. A letter that arrives with no warning reads like being sacked.

Not the best move. That signals a discussion, so the client will expect to negotiate. You have already decided, so tell them plainly.

Reasonable, but not the best. You do need it in writing, but a letter out of the blue feels like a sacking and invites an angry reply. Call first, then write.

Not the best move. Whether the problem could be fixed was for you to decide before the call. Reopening it now leaves both of you unsure where you stand.

Best answer. By the time you call, the decision is made. Restating it calmly, with the practical next steps, keeps the call from turning into a negotiation.

Not the best move. Going through each incident invites an argument about every one. If the reason is their behaviour, saying the relationship is not working is enough.

Best answer. Since 1 July 2026 many Australian accounting firms have anti-money laundering (AML/CTF) reporting duties, with a suspicious matter report to AUSTRAC generally due within three business days. Ending the relationship does not end that duty, so plan the exit with it in mind.

Not the best move. Telling the client risks tipping them off, which can be an offence under anti-money laundering law. Talk to your AML lead first.

Not the best move. Stopping abruptly with no plausible explanation can itself alert the client that a report may have been made. Get AML advice before you call.

Not the best move. An outline with placeholders is not checked legal wording, and this letter may be relied on later if there is a dispute.

Best answer. A template outline gives you a structure, not legal wording. Your professional body or professional indemnity (PI) insurer can spot wording that creates risk before it reaches the client.

Not the best move. The letter records a decision you have already made. It should be checked for risk, not negotiated with the client.

Best answer. If a deadline is missed months later, this letter shows whose job it was. Listing the next lodgment and payment dates you know of makes the handover clear.

Not the best move. Leaving deadlines out makes it harder to show later that the client knew what they now had to do themselves.

Not the best move. An informal promise blurs who is responsible and could leave you answerable for a deadline missed after you have stopped acting.

Not the best move. Ordinary post leaves no record of delivery, so you could not show the client received it.

Not the best move. Speed is not the aim. A text is a poor record of a formal letter, and you still need proof of sending and a copy on file.

Best answer. The letter only protects you if you can show it was sent and what it said. Registered post or an email with a delivery receipt, plus a filed copy, gives you that record.

Best answer. The Tax Practitioners Board says source documents and ATO correspondence are likely to belong to the client and generally cannot be held back for unpaid fees. Chase the fees separately.

Not the best move. Using a client's own records as leverage is what the Tax Practitioners Board's guidance warns against. Tax practitioners usually have no general right to hold them.

Reasonable, but not the best. Returning too much does the client no harm, but your working papers are generally yours to keep. Anything in between depends on your engagement letter and may need legal advice.

Not the best move. Delaying the reply to pressure the client mixes two separate issues and can leave them without the information their new adviser needs. UK guidance says outstanding fees are no reason to ignore an enquiry.

Best answer. APES 110, the ethics code for Australian accountants, expects you to answer a proposed new accountant honestly and clearly, but only with the client's permission.

Not the best move. You need the client's permission before discussing their affairs with anyone, including their new accountant.

Not the best move. Ending the engagement does not end your record-keeping duty, and deleting the file could leave you unable to show what you did.

Best answer. The Tax Practitioners Board's rules (section 30 of the Code Determination) require you to keep records of the tax agent services you provided, including to former clients, for at least five years.

Not the best move. Handing over your only copy leaves you without the records you must keep, and without evidence if questions come up later.

Not the best move. Lodging does not remove the client from your list. Until you remove them, ATO letters and contact can keep coming to you.

Not the best move. Your letter goes to the client, not the ATO. The ATO keeps you linked to the client until you remove them yourself.

Best answer. Lodging a final return does not end the link. The ATO's order is: remove your contact details from the client's records, use Remove client in Online services for agents, then remove your details from the Australian Business Register.

Not the best move. The history is not what they need, and spreading it can cause trouble if it gets back to the client. Give them the date, the jobs and who handles the handover.

Best answer. Your team answers the phone and finishes the remaining work, so they need the practical details and a simple line to use, such as "We're no longer acting for them after [date]."

Not the best move. The team answers the client's calls and does the work still in progress. Without the details they may take on new work or give mixed messages.

Not the best move. Three of the same is a pattern. Ignoring it means the next client like this will end the same way.

Not the best move. A pause does not change why the wrong clients came in. When you start again, the same problem returns unless your intake changes.

Best answer. A reason that keeps coming back is a pattern, not bad luck. It usually starts at intake: how you screen new clients, set the scope and agree the fee.