Ep. 23 – How to fire PAIN IN THE A$$ CLIENTS and all about setting boundaries.

Jamie Gruol: Welcome to today’s edition of Diary of a Tax Practice Owner. I am back with Jessica. Say hi, Jess.

Jessica Smith: Hello everyone!

Jamie Gruol: spilling the tea. So Jess is here with us today. And what we want to talk about is PETA clients. Pain in the ass clients. You’ve got a couple of them.

And what we want to talk about today is the mindset behind firing them, why you may need to fire them. And Jessica has some great stories about clients that she has had to pink slip too, if you will. So Jess, before we jump in, I see you have a new t shirt on today. So why don’t you tell us what you have on today?

Jessica Smith: It says, I love tax evasion! And it’s like, it’s a little play on like the I love New York, but it says I love tax evasion. These are fun. I don’t know why these are so fun. People give me funny looks. It’s a good conversation piece, right? Like I don’t really love tax evasion, right?

But people always like, well, that’s an interesting shirt.

Jamie Gruol: And you’re also the girl that drives around in a car that has tax savvy, Jessica on

Right? As a license plate.

Jessica Smith: yes.

Jamie Gruol: This just carries on. I can only imagine what your closet looks like with all these t shirts hung up in all the fun events.

Jessica Smith: It’s always fun. Cause I’m like, what reaction am I going to spark today? Right? Like, cause it’s eye catching. It’s good conversation piece.

Jamie Gruol: when you’re walking down the grocery store aisle and there’s a, for lack of a better word, a smarmy gentleman who’s like, yeah, I like tax evasion too, right?

Jessica Smith: You okay?

Jamie Gruol: We need to talk can bring in all types that

Jessica Smith: Mmhmm.

Jamie Gruol: just let’s dive in. You and I were chatting before we kick this off. And one of the things that, I was sharing with you is that we have a lot of people that post into our community that in our free community or paid group.

Like, there’s a lot of mindset. stuff around firing PETA clients.

Jessica Smith: Mmhmm. Mmhmm.

Jamie Gruol: from the outsider’s view, not owning a tax practice myself, like I feel like I bring a different lens to the system, but I’m a business owner, right? Like I have some PETA clients that I’ve had to deal with in the past or, situations that I’ve had to deal with where it was literally me having to stand up for my values. my business, my way of thinking the life I want to have. And when I see people comment about their fear of letting go of PETA clients I’m so often taken aback because, how you let one person treat you is how you’re going to let everyone treat you. And. The saying goes where the one bad apple can ruin the whole basket. I would love to hear from your experience, like where you, like, how did you like work through that? So the firing of the client, I would also want to hear like the dirty details, don’t forget those. But like, how did you find yourself at the point where you needed to make that hard decision and then how did you work through it?

So spill the details to us.

Jessica Smith: Yeah. So, a lot of what I was experiencing myself, it was a lack of what I have referred to as just a mutual respect for the relationship, right? The kind of engagement that a tax prep or a tax resolution these are difficult processes in general. And They’re deadline sensitive.

You miss a deadline and the taxpayer gets harmed, right? There’s penalties. There’s interest. There’s other ramifications if a deadline isn’t met. And so I’ve tried over the years to improve that line of communication. Many people know, like, this is a mutually beneficial relationship.

We have to both participate. We have to both be mindful about these deadlines because, if you miss our deadlines, we can’t meet yours. And then you’re the one holding the bag and. In the past, I had a hard time enforcing that I always felt like, oh, well, if the client, if whenever the client gave me the paperwork, no matter how close that was to the deadline, it was my job to meet the deadline.

And it was more so that it was my responsibility to make sure the deadline was met versus the asking, like, the client to participate. And that is a very significant mindset shift because I learned that habit from so many other tax practitioners who operate that exact same way. We see this in like a lot of different groups that we’re in, where people are like, Oh my gosh, it’s 1159 on the deadline day and I’m submitting tax returns waiting for the acceptance.

That’s crazy to me. That’s crazy to me that you take on the stress and responsibility. Of your client saying, Oh, well, I gave my paperwork before the deadline and really it’s like, just this like small little piece of this small little window of time to get things done. That has always been a big problem for me and my husband at one point said, you cannot be up at midnight.

Slinging tax returns for people. He’s like, this is unhealthy you’re staying up really late and then having to get up really early because people have this expectation that you’re just like waiting for them to give you stuff. That’s just, he’s like, that just doesn’t make any sense to me.

So that was just a really big mindset shift for me to. Finally say to myself, this isn’t healthy for either of us to be in this like constant state of emergency because of lack of proactiveness on usually the client’s part.

Jamie Gruol: Can I ask a personal question? How did situations also impact Jessica at home?

Jessica Smith: It was really rough because whenever I would have a client that would come to me very late with the expectation that I would get it done by, the, in many cases they’re looking at their deadline to file the return. It’s not my deadline, right? I’m just here to facilitate, hopefully, getting it done by that deadline.

But it’s not my job to make sure that deadline is met if you are not able to also meet me halfway. I mean, there were many times where it would really impact my mood because it’s, When you really start to peel the layers back of like what it means it just felt very disrespectful that my time was not of a saint, like my time with my family and my wellbeing and what I was hoping to get out of, owning my own business, the flexibility that I was trying to reach the clients who would come to me at the very last hour and still have this expectation that, Oh, well, you’re just going to get this done.

Cause I gave it to you. It felt like they didn’t view my time to be as valuable as theirs, right? Because they decided to provide what I needed on their own timeline, not the timeline that I had said I need it by to get this done smoothly, accurately, whatever. And it was really frustrating.

I did hold a lot of resentment especially with trying to work with those clients. Moving forward and in the future because every time now I’m like, are you guys, is this going to be normal? Am I always going to have you working until midnight because you couldn’t take the time? A day out of your life to make sure that I got this on time.

It just, I’m just always going to get it at the very last hour. And it really, it was very uncomfortable. And didn’t, it, I would say probably it would bleed over and it bled over into how I worked with other clients and how I interacted with them. It just soured. It soured a lot of the feeling about the work that I was doing.

Jamie Gruol: So I totally, I appreciate that because I think that whole basket analogy, right? That one apple, like you just, you start making these little concessions bit after bit, and it’s almost like you were also giving, The most parts of what you could give to your family, to your clients to help accommodate them and their needs.

Right? and I feel that because I did that in my business when I was getting started. And I think every business owner that’s getting started has to do a little bit of that, right? Like it’s the hustle phase of a business, but there was a point where you shifted and I would love to hear like, One of your, before we like jump into that, like point where you shifted, give us some dirty details.

Like tell us about a client that like you decided, like this is the point where I have to start standing up for me and my family and my needs and my business.

Jessica Smith: So I think one of the turning points for me at one point, I had like multiple channels of communication where clients would connect with me. So when you think about how overwhelming this could be, I had DMs on Instagram, DMs on Facebook, DMs on X. I had email, I had my business cell phone number.

My business, cell phone, text messaging, my client portal. So just with that alone that’s seven channel. I had to count them in seven channels. 

Jamie Gruol: Of channels.

Jessica Smith: yeah it’s seven different touch points to check to make sure I had all the information that I needed. And so, I recall at one point, and I have and this hasn’t been an isolated incident.

One thing that I am always very aware is, the type of work that I’m performing is a very, like, it’s an intimate process. I know everything about these people. I know when they get married, when they get divorced, when someone dies in their family, when they have a baby. Like, I know all of these things. I have all the information that I need to go steal a million identities and live somewhere.

Free of criminal prosecution, right? So you have to know a lot about your clients and understandably when you’re dealing with somebody’s money. There’s always an undertone of emotion and like it, there’s pain, right? Like partying, partying with your money is painful, right? So, so there’s that.

I I’m always aware of that. And what’s difficult is sometimes people act very, they have a, an emotional reaction to our engagement. Now. The difficult thing is, if you are having an emotional reaction to something, contacting me within a very, like, short time frame, I’m talking like within 20 minutes, if you have contacted me in all seven of those channels, and again, this has not been an isolated incident for me, I have had at least on, on probably four different occasions, four different clients have done this and again it’s, They get the block, they get all of this and they get like a stern like, Hey, this is your warning.

We can’t do this. This is not professional. But if you are feeling so strongly about something that is going on with what we’re working on to where you can’t even wait for me to like respond within what would be a normal timeframe and you call me, you text me, you email me, you DM me on Facebook in the portal and you do all of those things within like.

back to back thinking that, Oh, well, she didn’t respond to me here. She’s going to respond to me there. That does not like, I look at that as that’s a very intense reaction. And it, it can be a little bit scary because I don’t know, I don’t know what, where that is coming from. And so on, on a couple of occasions, I’ve had to say to clients, like, We need to practice professional communication.

Like these are the business hours. These are the expectations for when we’re going to potentially connect again, or when you can expect a resolve from the team, we’re here to serve you, but we also like have lives and it’s extremely inappropriate and so stressful to to go to all these different places and have the same person like just angrily like typing, like, I need to get ahold of you and, I’m like, why?

Like, so you can’t log into your client portal. That is like an urgent, I must speak to you now. And like,

Jamie Gruol: Right.

Jessica Smith: you to have a demanding kind of reaction to me. And I don’t respond well to people who are demanding, especially because I, with every engagement, I tried very hard to maintain a level of decorum and professionalism.

But when you come at me, man, like. It’s like high school. I’m like, I’m gonna come back at you. Right? Like it’s just, it’s a lot. And so I, I’ve put in a lot of different boundaries for that. I, and I express this many times. I block a lot of people on a lot of different things. Like all of my clients, one of the things that we do is we add them to the phone contact list, but then I block them because I have to, I need their number in case I need to get ahold of them, but they cannot just freely contact me.

In ways that are going to be disruptive because I can’t just turn off the text messaging. I can’t just turn off the phone call. I mean, I can put on do not disturb. Right? But I shouldn’t have to have so many methods of like blocking people from reaching out to me. Like, I just, I need you to understand.

Hey, like, after 5 PM, I’m with my family before 9 AM. I’m with my family and. And within the normal boundaries of what like a business is going to work together with like, that’s when you can contact me. And some people respond very very emotionally to that boundary and go off, fly off the handles.

And if that’s the reaction I’m going to get to my saying, Hey, this is just not appropriate. I would like to find a better way for us to work through this concern that you have. Then I know I have to, like, let go of that client. I have to let them go. And I have had some clients who have acknowledged, you’re absolutely right, this was I overreacted.

That’s like, that’s salvageable, that I think is a good way to repair what could otherwise be like an uncomfortable situation. But yeah it’s just sometimes people act overly emotionally and they’re just, they just want any kind of acknowledgement and they don’t care what channel it is.

And yeah, I’ve gotten like seven or eight messages in all different channels from people before and it’s shocking to me. It’s so shocking.

Jamie Gruol: Well, it’s, I was listening to a book. So if you guys haven’t listened to Mel Robbins them, it is a fantastic new book. So it is, it’s like total mind bender about how we, this exact situation, right? Like let them. And one of the chapters, she talks about how she had this realization from somebody that shared this with her, but that all of us, are like people react like that, it’s literally their six year old, eight year old self throwing a temper tantrum.

Relate that through there and be like, I understand that this is frustrating. I understand that you find this urgent. However, just to your point, right? Like this is not a professional relationship that we’re having right now. This is not going to, like, I can’t stand for this. Like you literally have to give them the boundaries that you would give your six or eight year old

Jessica Smith: Yeah.

Jamie Gruol: this is how I expect to be treated. And so if you can look at it that way, like for you tax preparers and our tax pros and anyone out there that’s had to deal with these situations, don’t just accept it. You can’t just let them treat you like that. Cause it’ll happen again and again, and it will get worse. It will get worse. But I just, I wanted to share that because when you can approach it from that direction and realize that you are literally having to step into a parenting relationship with this person at this moment, because they don’t have the emotional acuity to do it themselves. You have to sometimes call them on that.

And the good ones are going to say, Oh my gosh, you’re right. I’m so sorry for doing this. And I now understand like how we can work together more effectively. And I’m going to ask my questions sooner. I’m

Jessica Smith: Yeah.

Jamie Gruol: I mean, I’m going to get you my documents sooner. I’m going to, if I’m frustrated and I can’t do something, I’m going to say, Hey, this is happening, but I’m going to give you the time to respond in an appropriate manner. Those are the things that come out of a good relationship. But the ones, what I hear you saying is the bad ones don’t get better. So. would

Jessica Smith: Yeah.

Jamie Gruol: if you can share with us a couple of ways in which you have Exited someone

What is the process that you’ve gone through and share with the people so that they can see like when they bump into these situations, like they now know, okay, I can set the boundaries and I can communicate the boundaries.

Chat GPT also friends is a

Jessica Smith: Yes. Oh,

Jamie Gruol: emotionalness out of it. Like go and rage right to them, put it in chat GPT and say,

Jessica Smith: I do that.

Jamie Gruol: collaborative,

Jessica Smith: I do it.

Jamie Gruol: tone. Can you please help me hold the boundaries of this person that are still in a professional relationship. And let it rewrite and take the emotion out of it for you.

That is a game changer for me. And I know Jessica, you love that too.

Jessica Smith: I do.

Jamie Gruol: you can your therapist in that moment and help you fire them with dignity, if you will.

Jessica Smith: Exactly. So probably one of the better examples I can provide is this was a couple of years ago. I think it actually might have been closer to three years now. But I had on board a new client. It was a referral from from a friend and for all intents and purposes the. The engagement was fine.

There was no issue. Those of you who are familiar with my process about 3 or 4 years ago, I adopted a policy where I provide a communication agreement to my clients where, we’re both agreeing to what the related deadlines are going to be that we’re going to work together.

I typically give a deadline that I want them to deliver their documents to me in order to attempt to get a return done timely. We also reiterate like. What an extension means and doesn’t mean. And, when, what each other’s responsibilities are. And this is separate from my engagement letter.

Cause while I feel that this is something that could be included in an engagement letter, I wanted a simple, like one pager that, Oh, hopefully they’ll read this. Right. And so that policy has helped me pretty tremendously. And so in this situation, that was, I think the first year that I had dropped that, and this client had no issues.

With they, they signed the engage letter, they signed the communication agreement. They started to provide some stuff here and there, but they did not provide everything by my cutoff date. And one of the things that was very upsetting for them, and mind you, I worked on their file when they gave me some information, I worked on it super like, this was before I even had the boundary of like, I’m not going to work this many crazy hours.

So it was definitely a long time ago. I remember sending them. A video overview of like what I needed from them like at 2 30 in the morning Like I remember very distinctly like my mom was watching the kids for me overnight My husband’s out of town for work I was struggling because we were getting close to the deadline and I had a lot of clients that had just given me some Paperwork, so my mind was in like I gotta get through these and so I remember sending them a video like it was Super early in the morning and their response.

And I told them, because of the information that I had and how close we were to the deadline and how there was information missing that was going to materially impact what they would and would not owe. And they hadn’t responded to me that I told them that, we’re, that they I’m filing an extension for them and that when they can get this over to me, we can talk about that.

They blew up.

Jamie Gruol: Oh,

Jessica Smith: when I say like it was a very significant reaction, I remember reading the message and I was like, what in God’s green earth are you going off on? Like, it was so bizarre. So she was very upset because she said, I do not want an extension. You must file my return on time. Homegirl, you signed your communication agreement that said, I need your documents by this date, or I will file an extension for you.

Like it says signing this, you can like, you consent. To an extension being filed and this is where I think people get like a little worked up over Is i’m really good at contracts. I love contracts if there’s one thing I didn’t in law school Well was write freaking contracts. Okay, so I knew that communication agreement had to, it’s legally binding, but it had to include some of the other verbiage that I knew would come up in a conflict.

And so when you’re talking about filing an extension, ’cause some people have very strong opinions about extensions. My communication agreement says, I, you are, by signing this form, you are consenting to my firm filing an extension for you. And she was like. She was very upset, but I couldn’t file the return anyway, cause there was a lot of missing information.

So we were at an impasse, right? Like it was not just like, Oh, well, I’m going to file it because you said so. The return had to be done accurately and appropriately and it was a pretty material, it was a pretty material dollar amount that we were talking about that we were trying to figure out.

So she responded very emotionally and honestly, I just I took the day, I went through all the correspondence. I took all the date and timestamps. I took, I like, I took that agreement, I took everything and I said, I understand you’re frustrated. Here’s what you agreed to. Here are the dates that these items were provided to me.

Two weeks after my cutoff, like, you were aware and you agreed to all these things. So, I think it’s probably a good idea that you go to someone else. And because I’ve already done all the work, you are not entitled to a refund. She left without, and I say without issue because I didn’t get, like, an angry letter.

From her that I didn’t, that I didn’t do my job or whatever. But I mean, again I responded to her with all of what I would have responded to if I were in like a legal conflict with somebody sticking to the facts, sticking to the time period the things that each of us agreed to do, the responsibilities of each of the parties.

I’m like, you breached the contract,

Jamie Gruol: Right,

Jessica Smith: the contract. So I don’t have an obligation to fulfill the contract. If you breached it. And it was just very matter of fact. And that one was really hard only because it was a referral from a really close friend. And my friend felt so terrible. She was like, I’m so sorry.

I’d never expected that from them. But yeah, it was just a really strong reaction to, again, her lack of planning. She did not plan appropriately. So I got the information very late, two weeks after my cutoff trying to get the return done, like as quickly as possible, but she also wasn’t responding to me.

And her reaction was extremely over the top. And very demanding. And I was like, yeah, we’re not going to do this. This is, it didn’t feel safe for me at that point to, to continue. Cause she was not going to respond in a rational manner to, to what I was trying to accomplish. And I don’t have tons of those experiences anymore because I do a better job at vetting my clients.

And I do have stronger.

better communicated boundaries, right? Like I, I think that a lot of things that we struggle with any relationship, whether that be with our clients, with our kids, with our spouses, it comes down to communication. And I’ve been learning new ways to improve that, to minimize like. But crazy from coming out, it still happens, but it’s a lot, it’s a lot fewer and far between.

Jamie Gruol: I love that. So I want to wrap up our conversation here about how technology and Taxdome specifically has allowed you to do this. Like, I look back at Jessica that I met in You are a very different person

Done a lot of work yourself on, on yourself, on running a business, on improving your systems. But I’m curious how you think having a tool like Taxdome that allowed for that improved communication. That allowed you to create the infrastructure to make sure that those PETA clients aren’t coming in number one, but also if they do come in, do exactly what you did. It’s the metadata. It’s the audit trails.

It’s Signatures. It’s the ability to communicate clearly to your clients through technology that has really. allowed you to step into this new role of Jessica, the firm owner that is peaceful with the clients that she serves. Right. So I’m curious, like your thoughts, your kind of reflection on that.

Jessica Smith: So I definitely think that if there’s any, if there’s two things that you can do to like get you into a spot where you’re comfortable enforcing boundaries, it’s systems and it’s mentorship because you, if you’ve never run a business before or you’ve never been on like the customer service end.

It’s so easy to react in a manner that is going to bypass what would be deemed professional. So having a strong mentor to tell me that this kind of behavior would not be acceptable, and here’s how you deal with it was hugely important. But then also getting the guidance on how can I roll this into The actual systems process, and so having an appropriate method for how the documents get received, how they’re received and catalogued, how we have these other agreements that we present people so that we are properly and effectively communicating everybody’s expectations.

Right? You can’t just be like, oh, I thought it was an unspoken rule that you knew your documents were due on this date. You have to tell them like and it’s silly. Yes many times And so it’s definitely not something that you’re going to like learn overnight and it’s going to be extremely uncomfortable, especially if you already don’t have A backbone and can’t be and you’re not confrontational Because you have to be confrontational like you can be confrontational and not be disrespectful because You Sometimes like you have to grab the bull by the horns and be like, Hey, we are not going to react.

We’re not going to, we’re not going to do this. We are not going to be disrespectful to each other and derail all the hard work that we put together. But also again, protecting your peace. And being able to say, this is not a behavior that I find to be acceptable, and therefore, I am choosing not to work with you anymore, hey, we are just not a good fit.

We don’t vibe well. That’s also really hard. But it was, but once I learned, To not be a professional tolerator

Jamie Gruol: Ooh.

Jessica Smith: behavior that helped me tremendously because now I could see myself that it wasn’t just disrespect to me anymore. It was disrespectful to my team, disrespectful to my family. Like everyone was impacted by the negative Nancy’s coming in and wanting to, again, Take control of what they, where they thought things were supposed to go.

So I think those are super important. Tax dome has been really helpful for me. I mean, I think their audit trail is really good. In, in similar conflicts, with there’s no perfect tax firm. If you work with a number of people, you’re going to get people who are going to have problems.

And, if I’ve worked in this system long enough to know how to leverage it for me, to know that, identifying when somebody signs something and then comparing that to when somebody delivered something to me and be able to say, hey, You signed this on this date and agreed to it and it said I needed this by that date But you delivered it two weeks later.

So you’re out of what you agree to do

that’s a very that’s a very powerful Like tool to have in your back pocket is that? You can take the emotion out of it and you can fight it with facts and allow people to understand like, hey, this is just the reality of the situation.

You agreed to this. Unfortunately, you didn’t meet it. You were told if you didn’t meet it, this would be said consequence. So now we’re dealing with the consequence of what, what you didn’t complete.

Jamie Gruol: I love that. That’s so good. So good. Thank you. I hope if you’re listening to this, you are finding the empowerment to create boundaries in your business. I want to just add to the little anecdote that when we have these types of situations and we start filtering out those clients that are not a fit that are really bumping up against our values, taking our piece

our family, impacting our team negatively, You start identifying who is an ideal fit. Don’t just let these people go, but really look at who they were, how they got in if there were warning signs at the beginning so that you can start using those things as filters for bringing new clients in to replace them. There are so many people out there. So being afraid of letting go of a PETA client because there’s no one else to replace them, you are signing yourself up for a world of hurt.

for a long period of time. There are so many people out there needing services today. So if you’re somebody who’s like feeling that like scarcity of like, if I let them go, there won’t be anyone else. I promise you there’s 10 more ideal clients out there for you. You have to make the decision that I am of worth to have clients that treat me with respect that see this as a professional relationship. And this is what a professional relationship means to me. If you can’t define what professional relationship means to you, you need to do some work there.

Jessica and I are always glad to be your mentors in that.

Jessica Smith: Yes.

Jamie Gruol: a lot of people transition the way they think from not enough to, oh my gosh, I am worthy.

There’s so much goodness. And here’s how I can bring in high paying, high value clients. We want to, we would love to be your mentors in that. But Jess, I want to say thank you for sharing this today. We hope that you will join us again for another episode of Diary of a Tax Practice Owner, where we get to share with you the stories of people, the journeys of tax practice owners, and the, how they got from people Not having a system to not having an idea, not having the self worth to really valuing themselves and really creating a practice they love.

That’s what we love sharing with you. So we’ll see you again soon.

Jessica Smith: Bye.

Jamie Gruol: Bye.