If you’ve been a freelance remote accountant for long, it’s probably already happened. You’ve got two clients, Client A and Client B, that are both in the same industry. Client A finds out you’re working for Client B and unleashes the fury on you: “How dare you help our competitors?”
And the response you want to give them, the honest answer, is: “Because I have to make a living.” But Client A doesn’t want to hear it.
So you’re left with two options. Fire Client B out of the blue to satisfy Client A, knowing that Client A now no longer trusts you and may be looking to replace you no matter what you do. Or fire Client A and enrage them even more, risking that they will slander your name all over the industry in retaliation.
Neither option is desirable and both hurt your wallet and your business. So the best course of action is to avoid conflicts of interest as a freelance remote accountant in the first place. But how do you do that?
We talked with two industry experts to shed some light on the issue. Representing the legal and liability side is Bill Thompson, president, CPA Mutual. And for the perspective of someone who started as a freelance remote accountant and grew his practice into a proper accounting firm, we have Nick Pasquarosa, founder and CEO, Bookkeeper360. Read on for advice on how they say you can best avoid conflicts of interest.
Having a concrete conflict of interest policy in place that you review with a business before taking it on as a client can help prevent issues from occurring later.
“Accountants should include in their engagements a non-disclosure agreement (NDA) which gives the client the peace of mind that their information will not be shared with competitors,” Pasquarosa said.
You can actually use the potential threat of a conflict of interest as an advantage here. When onboarding new clients, let them know that conflicts of interest are extremely common for freelance accountants. If they’d like to avoid such an issue, they’ll have to pay you a higher rate that includes an “exclusivity fee.”
In conjunction with hammering out your own approach, you’ll also need to keep yourself abreast of the client’s own policies on conflicts of interest and non-disclosure.
“Follow your clients’ conflict of interest rules and regs,” Thompson said. “You don’t want to be perceived as using info that you acquire from one client and giving it to another.”
As your business grows, keeping existing clients informed of your new client dealings can further help you ward off a dust-up. Depending on the size of the client and the nature of your relationship, it might be smarter to ask them for permission than for forgiveness.
“Before engaging with new clients that you may identify as a competitor of an existing client, it may be best practice to disclose this information,” Pasquarosa said.
Be careful how you advertise yourself
As a freelance remote accountant, successfully marketing yourself and your services is critical to landing new clients and expanding your business.
Social media will likely be a key avenue for you. But keep in mind, social media is the high school cafeteria of marketing channels–information travels quickly, and there are no secrets.
“Be careful sharing information about who your clients are, especially on social media,” Thompson said.
That’s not to say you should keep your client list entirely private, however. Showing your client list to a potential new customer could be pivotal to landing them, as it demonstrates your level of experience and sophistication.
So while you don’t want to brag about whose books you’re doing to anyone who’ll listen, you may still want to share that information on a limited basis. Many freelancers do this by password-protecting all or parts of their portfolio sites. This way you can hide your client list behind a password that you only give out to potential new clients if and when you determine they need to see it.
While you’ll need to be careful about broadcasting your actual client list, advertising that you specialize in a particular industry is fine–and probably a smart move.
“You can certainly put on your resume or your advertising materials that you specialize in industry X,” Thompson said. “We work with some CPA firms that specialize in auto dealers and they’ll take on both the Chevy and Ford dealers in town. That’s just part of the business.”
Accept that some degree of conflict of interest is unavoidable
As Thompson said, conflict of interest is “part of the business.” No matter how much you do to avoid it, it’s going to happen. And that’s OK. Other freelance remote accountants have survived it, and so can you.
One of the reasons conflicts of interest are so common is that most freelancers naturally develop a specialty. They’ll land one client in an industry, word travels, and other clients in that same industry want to work with them as well.
The players in that space are limited, so eventually someone talks to someone and finds out his competitors are using the same accountant that he is.
“The problem is a lot of these accountants, especially independent contractors, will wind up specializing in a niche,” Thompson said. “Let’s say their specialty is franchises. They’ll do McDonald’s, and they may have such a great reputation that Burger King will want them too. That happens all the time.”
Find more freelance remote accounting work through Accountingfly
We hope these tips help you avoid conflicts of interest as you build your career as a freelance remote accountant–and mitigate the fallout when they do.
If you’re looking to grow your client list, check out the jobs listed on Accountingfly. You can use the “Filter by Job Type” menu on the bottom right of the screen to only see contract and/or part-time jobs. Accountingfly is 100% free for job seekers, so you’ve got nothing to lose.