Tax Practice of the Future: 5 Steps to Achieving an Advisory Workflow

Practice Management tax professional with clients

No one likes paying taxes. However, I believe that taxpayers like surprises even less. There’s nothing worse than a client coming in and being stunned by the amount they owe. I’ve heard in response, “Was there anything we could have done?” and “When there was a big tax bill surprise, I felt it was my fault!” If I had only known the changes happening in these clients’ lives when it happened, I could have helped – maybe not reduce the actual tax in all cases, but at least help clients be aware and prepare for their coming tax bill.

About three years ago, we decided to change that awful feeling by becoming not just tax preparers, but proactive tax planners. We now help our clients see what impact their current year activity will have on the tax return that will be filed in April the following year. What a difference it makes for our clients! There are no surprises at tax time, and we can help them make decisions today to potentially reduce their tax burden in the future.

We encourage clients to let us know about major upcoming or current life events, including the birth of a child, purchasing a new home, a change in jobs, an upturn or downturn in their business, an inheritance, or other things that may affect their taxes or their finances. Knowing the impact of their decisions and life events keeps them – and us – informed of what they will owe and gives them time to make a change, such as increasing their estimated tax payments, filling out a new W-4 or creating a retirement account.

Here are the steps that can take you from a reactive tax preparation firm to a proactive tax planning and preparation firm.

  1. Decide: This may seem like a simple step, but until you decide to do this, nothing will happen.
  2. Learn the software: Intuit® ProConnect™ professional tax software (I use ProSeries®) integrate a built-in tool designed for tax planning. Take the time to use and understand it. Intuit offers free training on this topic! In addition, using QuickBooks® Online Accountant has made it easy and efficient to consistently have visibility into my small business clients’ operations and profits, which enables me to give more accurate tax estimates while instilling confidence in my clients.
  3. Get the word out. Once we learned of the ProSeries Tax Planner, we got excited. We called clients to let them know we now offered this service. Would they be interested? The answer often was, “YES! I didn’t know you even do this!” With the Tax Cuts and Jobs Act, now is the perfect time to get every client in your office ready for a tax planning session. Ensure your clients learn of the changes and what it means for their taxes from you – not a Facebook post or some ill-informed source. You are the expert. You can tell them how tax reform impacts them, demonstrating qualitative value as their trusted advisor.
  4. Offer tax planning/advisory work as an add-on when preparing the tax returns: Once the tax return is done, we offer the option of a planning session before the next year-end. We bundle the services, meaning if the client chooses to take advantage of the offer early, they benefit from a lower-cost package. This option includes phone calls throughout the year so we can answer questions they may have, which further enables our clients to leverage us as advisors. We were concerned clients would constantly call to ask anything and everything. Good news: they don’t!
  5. Schedule it on the calendar. Now is the time to start these planning sessions. In our office, we calculate an hour per session. It’s not a huge investment of time, but the dividends for your client-and your firm-s are significant.

How many other tax and accounting firms offer advising and tax planning services like ours? Not enough! When we started getting the word out,

The phone started ringing with new prospects. They knew one of our clients and heard we offer this service. Their “old” accountant never offered this advisory and tax planning approach. Would we do this for them?

The bonus we didn’t expect is we now have even stronger relationships with our clients. We know them more as people – not just as tax clients. We can share their successes, failures, good times and bad. We make a difference in their lives throughout the year, not only in tax season. The phrase “People don’t care how much you know until they know how much you care” is true!

We are excited to see more and more accountants becoming proactive planners and preparers. It’s happening because clients want it, and now you can offer it. Leave a comment below – I look forward to hearing how you implemented tax planning services into your firm and how it’s having a positive impact on your clients and you.

Editor’s note: Learn about the Tax Planner for Intuit® ProConnect™ Tax Online, Lacerte® and ProSeries® professional tax products.

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