It’s been a hard push the past few months.
There’s one day left to go in a jam packed tax season. You’ve made plenty of cash to last for a while. You’re exhausted, and you’re just ready for it to all be over.
Sure, you’ll have some extensions to work on. But it’ll be the life of leisure after this week, right?
For most tax professionals, that statement couldn’t be further from the truth.
Now, if you’ve configured your life in such a manner that you can live on your tax season revenue for the remainder of the year, then I applaud you.
For most tax pros, however, it couldn’t be farther from the truth. The stark reality for most of our colleagues is that tax season is the time when you have enough money to finally catch up on bills, pay your own taxes, pay off the Christmas credit cards, catch up on the mortgage they were two months behind on, pay the kid’s next tuition bill, and on, and on.
Even though we make good money during tax season, it’s not that hard for it to suddenly all vanish, and then we’re struggling again for the rest of the year.
Here’s how you break out of that boom and bust cycle: Have multiple revenue sources within your practice to even out the peaks and valleys of seasonal business. Specifically, I suggest having three solid revenue sources within any practice, and my favorite happens to be IRS collections representation.
There are a number of issues impacting all professional service providers, including CPAs, attorneys, and EAs alike. Consider the following info from the legal world, while bearing in mind that similar trends exist in the accounting space:
- Smaller Pie – As the New York Times recently pointed out, “Legal forms are now available online and require training well below a lawyer’s to fill them out.” In other words, the Internet is decreasing the public’s reliance on attorneys for simple matters. The same phenomenon has been see for CPAs and EAs with the rise of QuickBooks, consumer tax software, and IRS Free File.
- More Mouths to Feed – The number of attorneys continues to grow: We saw 6,694 new attorneys passing the bar last year in California alone. Worse, a lot of the larger firms are laying off, and when those layed off attorneys can’t find work, they start their own practices, creating more competition. Business schools have been pumping out larger numbers of accounting graduates for the past decade, swelling the CPA ranks as well.
- Shallower Pie – People can’t afford to pay as much as before. The recent economic downturn has caused the demand for legal and accounting services to drop. According to US News and World Report, demand for legal services in the US contracted nine percent during the recession. While I couldn’t find any similar data for accounting services, we’re all aware that the used of paid tax preparers has been slowly declining each year for nearly a decade (although I have predicted that we’ll see a reversal of this trend when 2015 numbers come out).
The question quickly becomes: How do you stay ahead under these conditions?
It’s a well known fact that there are only three ways to increase revenue:
- Raise your fees.
- Get more clients.
- Do more business with existing clients.
Here’s the beauty of offering tax controversy representation: It’s an elegant way to implement all three at the same time.
Collections and audit representation yield high fees for the amount of work involved. It is a simple and elegant way for you to significantly increase your per hour rate.
Offering this service gives you something new to offer your existing clients. The first thing that any tax professional should do on April 16, 2015 is look through all your 2014 client returns and look for clients that had a liability that you’re not sure they can afford to pay. Then call them, and see if they need help with the issue.
Taxpayer representation is, in my mind, one of the most awesome ways to make money year round. But out of that comes all these new people that suddenly know, like, and trust you, because you solved their problem with the IRS. In fact, these people should be singing your praises from the rooftops.
That leads to two conclusions. First, you’d better be asking them for referrals. If you’re not, you’re flushing money down the toilet. Second, you should be doing their tax returns, and even their books, from now until the day you retire. These clients are gold, and will stick with you forever.
Offering IRS problem resolution is the best way I know of to make good money year round, grow your tax prep and accounting business, and eliminate the seasonal nature of being a tax professional. But how to get started?
Of course, I offer my own tax training courses to help you get started in this lucrative market niche. However, I fully recognize the fact that many people prefer to learn in a live format, with real people around. Learning via printed words or online video isn’t the easiest thing, and for some people that just doesn’t work. I totally get that: I did most of my undergraduate general education classes online, and it wasn’t easy.
If you’re the type of person that prefers to learn in person, you now have the perfect opportunity to do so. You’re invited to join me in Atlanta on May 5 and 6 for the Tax Resolution Leadership Conference. At this one of a kind event, you’ll immerse yourself for two days in the process of growing your business. At this conference, you’ll join your professional colleagues in learning the latest tax resolution marketing strategies and efficient practice management systems.