The Grading Bullet
Got 10 minutes? That’s all it takes to sharpen your practice! In this episode of the Bissett Bullet podcast, Martin Bissett delivers two actionable insights to help you grow your firm without the overwhelm.
Have you ever been told to grade your clients A, B, C, and D, but never shown how?
In this episode of The Bissett Bullet, we demystify client grading once and for all. You've heard the advice—there is no system to make it work.
Part 1: Why Grading Matters
Grading your clients helps you prioritise where your time, energy, and resources go. It clarifies who you should grow, who you should retain, and who may no longer fit. It's not about someone else's formula—it's about building a simple system that works for you.
Part 2: A Simple, 5-Point Grading System
I walk you through a fast, practical way to grade clients using five criteria: fee, location, scope, people, and capacity. Hit all five? Grade A. Miss one? Grade B. Miss two or more? You get the idea. It's easy to apply and gives instant insight into your portfolio.
Want to grow your firm without being overwhelmed? Get daily, bite-sized, actionable advice that is easy to implement and budget-friendly. This is The Bissett Bullet with Martin Bissett.
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Ready to grow your firm with practical, no-nonsense advice? The Bissett Bullet podcast gives you bite-sized insights you can implement today.
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4impactdata is an AI-powered platform that helps firms move beyond historical reporting by delivering clear, actionable next steps for your advisory team so that you can provide more value to clients without the guesswork of dashboards. To book a conversation or demo, or to join the 10X Advisory Cohort with resources from Martin, along with 10% off your first year’s subscription, visit 4impactdata.com
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ProNation is a global community for accountants and bookkeepers that gives you peer-to-peer support, expert guidance, and proven strategies to run a more profitable, efficient, and impactful firm. Led by Will Farnell, Lucy Cohen, and Martin Bissett, it helps practices of all sizes grow with confidence and better serve their clients.
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In association with CPA Trendlines
Transcript
How many conferences have you been to where some speaker somewhere in the program says you need to grade your clients A's, B's, C's, and D's, and you think, great, but how?
Speaker A:You're gonna find out how in this edition of the Bissett Bull.
Speaker A:So welcome back.
Speaker A:Hope you've been enjoying the previous episodes.
Speaker A:This show is brought to you by a free agent, especially if you're in the UK and for impact data, especially if you're in the US and you're going to find out more about those later on in the show.
Speaker A:But for now, let's look at grading.
Speaker A:And if you're a regular viewer of this show, you will know we do this in two parts in 10 minutes.
Speaker A:So in the first part, the idea, the concept, the theory and so on.
Speaker A:And the second part, the reality, the practical solutions.
Speaker A:So here we go.
Speaker A:Why do so many speakers tell you, the accounting firm owner, to grade your clients?
Speaker A:Why do they want you to do that?
Speaker A:Well, typically for many, many years, certainly a lot longer than I've been around, and I've been around 27 of those in this profession, they have been speakers who have been working with accounting firms, who have been diagnosing issues within accounting firms and only to find out that the accounting firm is typically low in profitability comparative to other professional service firms.
Speaker A:And because the partners, the most expensive people in the practice, are spending their time on the least profitable work.
Speaker A:And there is no distinction made between whether we should work on this client or that client.
Speaker A:It's whatever the urgency is, wherever the need is in that day.
Speaker A:And yeah, things have become a lot more sophisticated in the mean in the intervening years.
Speaker A:But it's still the case that if I go into any high six figure, low seven figure firm and say, say show me your clients as they are graded A, B, C and D and what criteria you used for that.
Speaker A:Maybe 1 in 50.
Speaker A:I'm being kind.
Speaker A:I think maybe 1 in 100 firms could actually do that for me.
Speaker A:And most of us, we just get on with things.
Speaker A:We just do whatever's in front of us that day.
Speaker A:And hey, it hasn't served you too badly, has it?
Speaker A:It's done.
Speaker A:Okay, so why would you look to do this grading thing?
Speaker A:Well, because hopefully you're interested in evolution and progress and development.
Speaker A:And if you are, great, I got a solution for you.
Speaker A:And if you're not, you're watching this because, well, so let's take a look at why we grade.
Speaker A:We grade to create priority.
Speaker A:First of all, we grade also to suggest where Opportunity beyond our current scope of work exists in the greatest likelihood or the greatest probability of additional work being found.
Speaker A:When we look at capacity issues and looking at if we did have to lose clients and if we did have to get rid, then who, well, that would be again, a grading exercise to look at where our C's and D's are and see if they have a potential to become A's and B's.
Speaker A:And if they don't, should we continue to service them?
Speaker A:Should they be partner looked after?
Speaker A:Should they go to someone else?
Speaker A:So a lot of different decisions within an accounting firm at any given time can benefit from having a grading system on your clients.
Speaker A:Now because of this, it comes up in conferences every now and again.
Speaker A:Not as commonly as it used to because there are more urgent messages being put out in conferences these days.
Speaker A:Because this is a, are a discipline you can implement at any given time, really, but still relevant, still useful, and if you use it right, still profitable for you as well.
Speaker A:So when you are grading your clients, you can do A, B, C, D if you want, you can do gold, silver, bronze, worse if you want.
Speaker A:You can do it whatever you want it to be.
Speaker A:It's not so much following someone's prescription, it's more important that you actually do it your own way.
Speaker A:That tells you what you want to know and gives you the opportunity that you want to create through doing it.
Speaker A:So despite all that, many, many times a practice will come to me and say, yeah, okay, Martin, that's great, thank you for not pushing something on us.
Speaker A:We get to do it our own way.
Speaker A:That's wonderful, but could you tell us exactly what to do, please?
Speaker A:Well, I'll give you a guideline.
Speaker A:How about that?
Speaker A:I'll show you the simplest grading method I know and you might take a look at that and say, well, that's not the one we want to use, but it will give you a starting point to build the one that you want to use.
Speaker A:If that sounds good to you, let's do that.
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Speaker A:Right.
Speaker A:You ready for your grading system?
Speaker A:The easiest, simplest grading system you will ever find.
Speaker A:Yeah, here we go.
Speaker A:Five component parts to this.
Speaker A:When we are evaluating an existing client or a new potential client, no matter where that source comes from, it could be a referral, it could be one we're trying to proactively win.
Speaker A:Doesn't matter.
Speaker A:But whenever we're deciding whether they are an A, B, C, D or worse than that, then I have five criteria for you to use as a starting point, after which you can change that if you want to.
Speaker A:So number one is this piece of work, opportunity, new client, win, whatever.
Speaker A:Is that the right fee?
Speaker A:The sort of fee that's at the right level of profitability for you?
Speaker A:The sort of fee that's your current average fee or higher.
Speaker A:You know, is that a good fee or is it a bit of cheap work that we're thinking about taking down just to fill up somebody's time in the back office?
Speaker A:Is it a good fee?
Speaker A:That's question one, question two.
Speaker A:Location in the digital age doesn't really matter where your clients are these days.
Speaker A:But still a lot of practitioners have a preference for being able to look after a close knit conurbation of clients.
Speaker A:And so a lot of firms factor into their consideration.
Speaker A:Where is the client?
Speaker A:If I have to go and see them, how close to me are they?
Speaker A:So geography as number two, as number three, scope the sort of work that they're asking you to do, can you deliver this?
Speaker A:Is this in your wheelhouse?
Speaker A:Is this going to require you to get some help from some other firm?
Speaker A:Is this you blagging it?
Speaker A:British term there, blagging it.
Speaker A:Meaning you say you can do the work and you have no idea whether you can or not.
Speaker A:Okay, so is this scope of work easy or comfortable or realistic for your firm to deliver?
Speaker A:That's the third one.
Speaker A:Okay, so far, right.
Speaker A:Fourth one People.
Speaker A:Is this client the sort of people or person that you'd like to work with?
Speaker A:The people that don't complain about the fact that you charged for this and charged for that and charged for the other, that don't complain about the fact that you haven't answered their question within the first five minutes of them asking it, that sort of thing?
Speaker A:The people who might open doors for you elsewhere, who might give you testimonials or case studies, you know, good clients, fun clients, enjoyable clients, the right kind of people, that's number four.
Speaker A:And number five, the one that scares us all, capacity.
Speaker A:Do we have the capacity?
Speaker A:Okay, so an earlier one was scope.
Speaker A:Is this the, Am I technically able to deliver this?
Speaker A:This one is, have I got the room, the bandwidth to deliver this?
Speaker A:And that's your number five.
Speaker A:Okay, so in no particular order, because I don't remember which order I did them in, but here they are again.
Speaker A:Is it the right fee, the right people, the right geography, the right scope and the right capacity for you?
Speaker A:Can you handle all those things?
Speaker A:And if this piece of client work or this new client engagement scores all five of those, there is your grade A client.
Speaker A:It's got everything.
Speaker A:Now here comes a simple bit, even for the really simple bit.
Speaker A:Take away any one of those scope fee people, plastic, whatever you want, take away any one of those four out of five, it's a grade B.
Speaker A:If it's got two missing, it's a grade C.
Speaker A:You get the general idea here.
Speaker A:If it's got three missing, it's a grade D.
Speaker A:If it's got four out of the five you want missing, it's even worse, isn't it?
Speaker A:So those five criteria are the ones that I would use and the ones I see most commonly used, and the ones I advise firms to use, which is why I'm doing this right now.
Speaker A:It doesn't have to be those five, though.
Speaker A:You might have a more preferable five stage criteria, in which case replace it with yours, but keep the five, because then you know that missing any one goes down to a B, missing any two goes down to a C, and so on.
Speaker A:And there's a really simplistic time saving way of grading your clients quickly, accurately, and to give you an immediate look as to how your portfolio bears out.
Speaker A:What percentage are A's, what percentage of Bs, what percentage, what are Cs, what are Ds and what are worse?
Speaker A:And that hopefully will give you food for thoughts for what you choose to go after in terms of winning work and exactly what you say yes and no to when it comes in.
Speaker A:You got that?
Speaker A:Great.
Speaker A:In that case, I can leave you alone now.
Speaker A:So I will see you on the next Bullet.
Speaker A:Thank you very much for being with me on this one.
Speaker A:And thank you as always, to Free Agent and four Impact Data for making the show possible.
Speaker A:I'll see you next time.
Speaker A:Bye for now.
