How To Stop Working For Free

Are you working for free?

Do you ever work for free?

No? Are you sure about that?

Most tax professionals I know do, at various points in time, work for free. Most of the time, they call this free work “good customer service”. But what they don’t understand is that working for free erodes the value that your client perceives from working with you, and can spawn some very unhealthy client behavior.

Let’s take a look at a typical 1040 client. Let’s call her Janet.

Janet calls you out of the blue about 4 times per year to ask that “…one quick question, it should only take two minutes.” Unfortunately, Janet’s single quick questions always turn into 30 minute conversations. Also, the human brain requires time to re-engage to a productive task. So, if you were intently focused on putting together your new marketing campaign, but you chose to accept Janet’s call, then you actually just lost about an hour of productive time.

So that’s four hours per year right there, for one client.

Let’s not forget that Janet is buying a house, and needs you to fax copies of her last two 1040’s to a mortgage broker. And let’s not forget that CP-2000 that showed up in the mail because she forgot to give you that K-1 with $20 of income on it. So we’re now at about six hours of extra time on Janet’s behalf.

Six hours that you provided at no charge because you thought it was “good customer service”.

How many Janet’s do you have in your business?

And here’s the thing about people in general: It’s human nature to take a kilometer when given a centimeter.

(Yes, cliches work in metric, also.)

We all do it. I do it. You do it. Children do it. Poor people do it. Wealthy people do it. Americans, Russians, Chileans, Martians… We all do it, even though it’s mostly subconscious.

Here’s the problem: When you give clients too much rope, it’s YOU they’re hanging with it.

Yes, you need to provide good customer service. But good customer service does NOT equal free work. If you think it does, go try it with your doctor and see how far you get (“Hi, could I speak to Dr. Smith for two minutes, I just have one quick question…”).

I don’t know what your hourly rate is. I use $175 per hour as a nationwide, average billable rate … Continue reading

21 Things You Should Start Working On NOW In Order To Have Your Best Tax Season Ever In 2016

A quick question for self-employed tax professionals and firm owners: Did you have a crappy tax season in 2015?

If you answered, “Yes”, then I have a disturbing piece of news for you: It’s 100% your own fault.

“The nerve!” I hear you saying.

But think about it. If you got stiffed by any tax prep clients this year, that’s on you for not getting paid prior to filing. If you failed to hit revenue targets, that’s on you for not raising fees, engaging in client retention efforts, or attracting new clients. If you had too many returns that you hated doing, that’s on you for not being selective in your clientele. I could keep going, but I think you get the idea.

As small business owners, we are 100% responsible for the types of clients we work with, when we work, how we work, and even how much revenue we generate.

If you’d like to reduce stress, improve profit margins, and just have an overall better personal experience for yourself, your staff, and your clients in 2016, here are 21 things you can start working on right now in order make it all happen. You don’t have to do all 21, of course, but even if you just do a few, I guarantee you’ll have a better tax season.

1. Go paperless. You’ll save time, money, and headache. Before you say it’s not possible, understand that tens of thousands of us already do it, and have been as paperless as legally possible for years. Technology is your friend. Scan and return paper client documents if you can’t import digital copies. Charge a premium for paper copies of returns; $35 is not uncommon. Deliver client copies on USB flash drives or via secure client portals. Yes, people will resist change, but they’ll get over it.

2. Pick a niche, and OWN it. Are you actively engaged in a particular hobby? Are you active in a fraternal organization? Do you have two dozen existing clients all at the same employer? Then you have an affinity within a niche group. Every single person in that niche group in your local area should know who you are and what you do. Proactively engage with fellow group members right now. Make special offers to them for your services during each of the various tax seasons: Tax prep season, tax planning season, representation season, etc. No other tax professional should … Continue reading

What the Tax and Accounting Firm of the Future Looks Like

Lately, I’ve been immersed in helping to actually create the future of continuing education for our profession. This has led me into a fascinating exploration of recent discoveries in the world of K-12 education, the rapidly growing segmentation of higher education, and the changing landscape of interactive learning modalities.

Through it all, I have noticed two key elements upon which the entire conversation hinges:

  1. Changing attitudes about human interaction.
  2. Integration of technology advancements into the learning process.

This particular blog isn’t really the place for me to discuss changes in education. What I will discuss here, however, is that these same two key elements are going to have significant impact on how all professional service businesses are operated. Let’s take a look at some specifics.

Certain shifts in technology, such as the tornado cloud, are already quite pervasive in our profession, and impossible to ignore. Cloud accounting, cloud CRM, cloud tax return preparation, and even cloud word processing are now all parts of our professional lexicon. For better or worse, these technologies are here to stay.

Several of the companies upon which we rely for our software needs have flat out told us that desktop versions of their software will some day not be available anymore. Some specialty services, such as Canopy’s tax resolution case management software, have never had desktop software equivalents, and have only existed in the cloud.

Technology is also driving significant changes in staffing. We are solidly locked in the era of knowledge workers, of which all tax and accounting professionals are a part, by definition. But on top of that, we have also entered the eras of the mobile workforce and the flexible workforce.

According to PGi, which provides collaboration tools for distributed workforces, a 2014 survey of executives and managers indicates that 80% of surveyed companies offer some sort of telecommuting option for knowledge workers. Not surprisingly, 70% of those taking the survey indicated that they themselves telecommute at least occasionally. Telecommuting also isn’t what it used to be, which was often “all or nothing”. Now, it may be any blend of 100% to only occasional, and it may be from home or from a beach in Bali. These trends are what make up the mobile workforce.

The flexible workforce collectively refers to a number of distinct societal changes. First is the fact that, since the 2008 economic decline, more and more knowledge workers are … Continue reading