Disengaging from a client properly
What a firm should do when it resigns or a client ends the appointment: the reason, access to the books, unbilled work, files and the next firm.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
Relationships with clients end for ordinary reasons more often than dramatic ones. The business is sold, the owner retires, a larger firm offers a fixed fee, or the firm decides it can no longer serve a client who pays six months late. Whatever the reason, the way the relationship ends is what both sides remember, and it is also when most disputes about fees, documents and responsibility for missed deadlines begin.
A clean disengagement has a short list of steps: a clear end with a stated reason, access handled in the right order, unbilled work settled, files kept for the right period, and a professional answer to whoever comes next. This article goes through them for a firm using Achekam.
Ending the appointment with a reason
Either side can end the appointment in Achekam: the business that appointed the firm, or the firm itself. When an appointment is ended, Achekam asks for a reason, keeps it on the record and shows it to the other side.
Write that reason as if the client's lawyer will read it, because the client will. "Engagement ended at the client's request following the sale of the business" or "The firm has resigned; outstanding fees and the scope of future work could not be agreed" are factual and complete. Avoid opinion and avoid anything confidential to a third party.
Before ending the appointment, send the client a letter that says:
- the date the firm stops acting;
- which work is complete, which is not, and what the firm will and will not finish;
- any deadlines falling due soon, such as tax returns, payroll submissions or annual returns, so that responsibility for them is clear;
- the fees outstanding and the basis for any final invoice;
- which original documents are being returned.
For audits, a resignation or removal of the auditor carries its own formal steps under company law in each country; follow them as well as this list.
Access ends; the books stay with the client
When the appointment ends, the firm loses access to the client's books and the business keeps them. That is the right outcome; the books are the client's records. It also means the order of steps matters.
Before ending the appointment, finish or hand over anything that needs access: final journals agreed with the client, the last month's reconciliation, and exports of anything the firm must keep for its own working papers. Once the appointment is ended, the firm cannot go back in to collect what it forgot.
The client's duty to keep its records does not move to the firm when the firm leaves. In South Africa, for example, section 24 of the Companies Act sets out which records a company must keep, in what form, and for how long. Remind the client in the disengagement letter that its records remain its responsibility.
Achekam has no managed handover pack between an outgoing and an incoming firm. A business changes accountant by ending one appointment and inviting the new firm, which then works in the same books. Anything the new firm needs from the old one, beyond the books themselves, travels as correspondence. How this looks from the business's side is described in changing accountants: the books stay with you.
Billing or writing off unbilled work
Most disengagements leave some unbilled time. Deal with it before the relationship goes quiet, because a final invoice sent months later is the hardest to collect.
In Achekam's WIP Register, a partner, manager or administrator can write unbilled time up, down or off with a reason, and bill it into a client invoice, so the same hours cannot be billed twice. Write-downs above the firm's threshold, 10% by default, and every write-off wait for approval by another partner.
Decide deliberately. Time spent on work the client will benefit from, such as a completed tax return, should usually be billed. Time spent on work the client will not receive, or on internal handover, is often better written off with a clear reason than argued over.
Files to keep, and for how long
The firm's own records about the client do not end with the appointment. Working papers, correspondence, engagement letters and the evidence behind any report the firm signed must be kept for the period the firm's professional rules and the law require.
Achekam's Document Centre keeps a folder per client, with versions, tags, and archive and restore with a reason. Archive the client's folder rather than deleting anything, and return original documents the client lent the firm, keeping copies where the firm needs them as evidence.
Disposal later is governed. Achekam disposes of a governed record only after its retention period has ended and no legal hold applies, with three different people requesting, reviewing and approving the disposal. The disposal certificate keeps proof of what was disposed of, not the content. If the disengagement is contentious, or a claim is possible, put a legal hold on the client's records so nothing is disposed of while the risk remains.
| Item | What to do |
|---|---|
| Client's books in Achekam | Stay with the client; finish what needs access first |
| Client's original documents | Return them, keeping copies the firm needs |
| Firm's working papers and correspondence | Keep for the required period |
| Unbilled time | Bill or write off with a reason, approved where required |
| Records at risk of a dispute | Place a legal hold |
Answering the next firm's clearance request
Sooner or later the incoming accountant will write asking whether there is any professional reason not to accept the appointment. Answer promptly once the client has given permission to discuss its affairs, and answer factually: disagreements, concerns about integrity and outstanding fees, if any, stated without embellishment. If the firm resigned for a professional reason, the next firm needs to know it. The same exchange from the incoming side is covered in asking the previous accountant for clearance.
A worked example
A retail client sells its business and asks the firm to stop after the final management accounts. The manager posts the last month's journals with the client's agreement, exports the firm's working papers, and sends the disengagement letter listing the VAT return due the following month as the buyer's responsibility. Unbilled time for the handover meeting is written off with a reason; the final month's bookkeeping is billed. The appointment is then ended in Achekam with a factual reason, the client folder is archived, and the clearance letter from the buyer's accountant is answered within the week.
Plan the exit at the start
Put the disengagement terms in the engagement letter itself: notice periods, how outstanding fees are settled, and what the firm will hand over. When a relationship ends, the letter then tells both sides what happens next.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
