Increasing revenue/lowering expenses - this year's plan

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#1
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Hi all, wanted to see what your feedback/ideas may be this season for increasing revenue and decreasing expenses. Here are mine 1.) This year i started reaching out to EVERY single client with a personalized email in January which included their personal proforma tax checklist to help guide them in gethering their tax info and providing it back to me in a clean and organized manner. In the past i only did a checklist for larger clients, however i find these checklists to really minimize back and forth correspondence such as "did you have any day care expenses, you didn't include it, are we missing this 1099 or that 1099, etc. My retention rate is usually very good (about 90 to 95%) however i am hoping this proactiveness will increase retention even more. A client not lost is a client gained. Plus by having each client complete their checklist i will be able to complete their taxes even more efficiently to free up more time to promote business during tax season 2.) More proactive on linkedin. Really trying to make a connection with each and every client and/or mutial friend of a client. 3.) In the past i did not necessarily agree with this but i am going to try it this year which is reach out to all clients i have lost over the years, lets say i lost 20 clients over 15 years, thats 300 clients, and just send a very brief text message "hey, we worked together in the past, if you are once again in need of a tax pro...." out of 300 even if i can get a 3% return would be close to 10 new clients. 4.) In the past 3 years especially, many clients are switching to having their taxes done without an in person meeting. I would say its gone from 50% to now 70/75% is strictly email. I believe i can get that number to 80/85% this year with the balance of 15% in person meetings being for clients who still make a lot of sense for a face to face meeting due to complexity and/or they strongly prefer an in person meeting. Based on these facts i have closed my full time year round office of 4 years and will return to working from home practically full time and will now meet clients who insist on in person meeting at a virtual office space where i rent out a small office or conference room on an as needed/hourly basis. 5.) Any person i give my business to, i.e. mechanic, contractor, barber, etc i will give them my business card. This was a tip i learned from a seminar. Why wouldn't someone you give your business to at least consider giving their business to you? 6.) As some of you know i was going to switch to a much less expensive software but after careful consideration i decided it was too risky to do this now and be hung up on a learning curve right before tax season especially with closing full time office might be taking on too much change in one season. 7.) Clients who want a 2018 projection to know how the new tax law will affect them i will charge a flat fee of lets say $125. I figure even if 20 clients want this projection its still $2,500 increase revenue. Every bit helps. I look forward to your feedback and/or your ideas on making this a more profitable tax season. Best wishes to all for a successful and stress free tax season.
 

#2
ATSMAN  
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Do you try to find out why a client is leaving you? If yes what were the major reasons?

I am not currently planning on charging any extra fees to do one projection for 2018 post TCJA. However I know I have some very demanding clients that will ask me to run the projections half a dozen different ways and for them there will be an hourly charge for the extra work.

I too would be interested to find out, how many members on this board will charge extra to do those projections.
 

#3
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I will ask each client whether they want me to do a projection for 2018. In particular, I will strongly suggest to those clients where the 20% deduction may come into play that a projection be done now and revisited in October or November.

I will charge for time I spend doing any projection. I'd obviously apprise the client they will be billed ahead of time and let them make that decision whether they want it done.

To me, tax planning should be billed at a premium rate, as that can often save the client a fair amount of money, and doing a projection for 2018 would be part of that planning effort.
 

#4
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Any thoughts on why there is such minimal discussion on these boards regarding how we can build and grow our tax practices and how to increase overall business?
 

#5
makbo  
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Because it's a highly individualized business, unless you are in a larger firm. What works for one practitioner in one market will most likely not work for another somewhere else. Plus, not everyone is trying to grow.

Further, I think this forum mainly attracts discussions about tax law, representation, and return preparation. Sure, most here are also in business, but that's not why they came here in the first place.
 

#6
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wkstaxprep wrote:Any thoughts on why there is such minimal discussion on these boards regarding how we can build and grow our tax practices and how to increase overall business?


In addition to what makbo said, I'd add that it seems to me that a strong portion of this board is very confident in who they are as a professional and what their practice is. We have developed our unique selling proposition (USP), defined our target market, and we cater to it. What we need more than anything else is someone to bounce ideas off of.

Also, some of us might wish to keep some things private or secret on a completely open, internet-searchable forum.

wkstaxprep wrote:feedback/ideas may be this season for increasing revenue and decreasing expenses.


Sounds like you have some good ideas already.

(1) Your retention rate is extremely good, but depending on the size of your firm it might be borderline too high. Some turnover of clients is important.

(3) Whether this is a good idea is probably dependent on the reason(s) you lost those clients in the first place.

(7) This will depend on your USP, of course. I draw a distinction between tax estimates and tax planning. If I run a tax estimate as a part of the tax return preparation engagement, it takes just a couple minutes and the service fits neatly in to my USP so I don't charge separately for it. If there is actual tax planning to do, or if the client wants me to run a lot of different scenarios, then I bill. In addition, you should be speaking/meeting with all of your business clients after October 15th (as Taxalmanacer also pointed out). Midyear QuickBooks clean-up with an eye toward doing another projection near year-end saves time in January/February and delivers real value to the client that they will appreciate and pay for.
 

#7
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Thank you for great feedback. Regarding your thought that most tax pros on here are comfortable and dont need/want to discuss increasing client base, i understand your point yet at the same time i cant imagine the top tier businesses in any industry not discussing pricing and new target customers on a continuing basis. On a side note what are your thoughts on attending small networking groups during tax season when tax pros are in many people's mind to increase potential business relationships?
 

#8
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Makbo and I gave multiple possible reasons for this; it's not just one...

As for small networking groups, it's going to depend entirely on what your practice is. Different marketing groups would be better or worse for you based on your USP.
 

#9
smtcpa  
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I think the ideas are good. Personally I am more interested in this idea of a personalized checklist for each client. Seems like a great idea, but a lot of work. Not saying the extra work is not worth it in terms of efficiency and personalized attention. Do you have a sample? Is this in addition to a standard checklist/organizer?
 

#10
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The checklist is done on excel and actually saves time in the long run and i am doing them now before i get busy. Example, The checklist is basically 3 columns. First column is wages, second column is 2016 figures filled in by me from 2016 tax return and 3rd column is 2017 left blank for client to fill in the amount for 2017. The first column has for example W2 con edison, next line might be schedule c gross income, next 10 lines might have all schedule c expenses listed such as supplies, travel, advertising, office rent, next line might be day care expenses, then mortgage interest, you get the picture hopefully. Then at bottom of page i have a signature line where client signs acknowledging the figures they have provided are truthful and accurate. These signed checklists are also good backup to have in client files. There is never any confusion where a client tells me they gave me a form or expense that i omitted from their return. It also makes the whole process very smooth. I would say the average checklist takes me 5 to 7 minutes but saves me a good 20 minutes in prep time and reduce tax season stress immensely. I know most tax softwares have proforma organizers which you referenced for clients to fill out but i feel doing these one page user friendly checklists are very much appreciated by clients versus a 20 page proforma where most of the pages wont apply to each client.
 

#11
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Some tax software has a checklist similar to that as an organizer option. UltraTax is one; I use it and my clients prefer that.

The last time I used Prosystem fx was in 2004, and the organizer back then was so daunting it is burned into my retina (perhaps hyperbole). Have they at least attempted to make it easier for clients?
 

#12
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missingdonut wrote:The last time I used Prosystem fx was in 2004, and the organizer back then was so daunting it is burned into my retina (perhaps hyperbole). Have they at least attempted to make it easier for clients?


No...emphatically, no.
~Captcook
 


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