A CPA Firm That Doesn't do Taxes? What?

At Legacy Advantage CPA, we only provide bookkeeping services. Crazy, right? What CPA firm DOESN’T do taxes? Well, we certainly could, but we’ve made a strategic decision not to – no audits, no reviews and no tax filings. We offer outsourced bookkeeping services only. Period. Still sounds crazy, right? We don’t think so, and here’s why:

  1. Taxes aren’t our niche. According to Jim Collins’ Hedgehog Concept, which he defines in his book “Good to Great,” great companies have a chief strategy. This strategy lies at the intersection of three things: What you are passionate about, what can you be the best at and what drives you economically. At Legacy Advantage, we are passionate about helping our clients, and our economic engine is driven by profit per client. But, what can we be the best at? Auditing? No. Taxes? No. Bookkeeping? Yes. We found our niche, and chose to focus on that strength. We go an inch wide and a mile deep so that we can offer highly specialized services in this area.
  2. Everybody does taxes. It’s hard enough to differentiate between one accounting firm and another, so we complement other firms rather than compete with them. Here’s how it works. When bookkeeping is done properly, accountants can achieve a higher recovery. They’re also comfortable sending clients to us because they know that we won’t solicit tax work. In turn, we refer tax work back to them, which also lowers our risk. Thus, a symbiotic win-win relationship is born.
  3. We can’t become experts if we’re spread too thin. Staying on top of changes to tax laws and regulations is an exhaustive process, one we felt would be difficult to do while keeping abreast of changes in the bookkeeping industry, such as new processes, apps, CRMs and QuickBooks® Online updates. It’s one thing to just file a client’s taxes, but it’s something else to deploy strategies that minimize their overall tax burden. If we can’t be tax experts, we’d be doing our clients a disservice by filing taxes for them.
  4. Specialization is more efficient. We achieve higher efficiency by reducing variability in the tasks we perform. We only work in the QuickBooks environment, so our staff doesn’t have to learn how to use separate tax and auditing software. We have weekly and monthly discussions on how we can do our work faster without sacrificing quality, and because we’re all focused on bookkeeping, we have a greater pool of individual tips, tricks and insights to draw from.
  5. Our work-life balance is better. How, you may ask, is this so? It’s anecdotal, isn’t it? Well, for starters, we don’t pull our hair out like most CPAs do come April, when tax season rolls around. For us, April is just like any other month. Because we don’t have a busy season, our staff doesn’t stress out, or end up working seven days a week, to file everything on time. In fact, this guy took 10 days off to go to Mexico right in the middle of tax season. A vacation in April … at a CPA firm … crazy, right?!

Now, at this point, you may have some objections. When we started considering the bookkeeping sans tax filing route, we debated and deliberated, too. That didn’t stop us. Why? Well, let’s cover three of the most compelling (and common) objections, and why these aren’t so compelling when you stop to think about them.

  1. Clients want a one-stop shop, don't they? Nope. This is a common assumption that’s just not true. We have hundreds of clients, and only one (that’s right, ONE) has specifically wanted this. The rest just want a seamless experience, and that’s easy to provide. We liaise with an accountant of our client’s choosing, and any questions from that accountant come to us first. This takes the pressure off the client, which is all they really want.
  2. Good associates want tax filing experience. This is true, and can pose a challenge when hiring. We’ve lost one associate for this reason. In response, we’re experimenting with an “externship” program. Here’s how it works: We loan interested staff to accounting firms during the tax season (January – April). It’s become tremendously popular on both sides because it creates a win-win. Our associates gain valuable tax experience, and the accounting firm gets the extra help, minus the pressure, to hire or retain once tax season is over.
  3. We’re leaving potential money on the table. Yes, sort of. We’re leaving EASY money on the table. After all, if we do the trial balance, why not file the tax return, right? When we’re asked this question by staff or advisors, our answer is always the same. The moment we start doing taxes, we cut ties with the accounting firms. When we do that, we become their competitors, and in turn, they stop referring clients to us. Then, we must obtain tax specialists to ensure quality. So, the so-called “easy money” comes with a much higher cost.

To stand out in the marketplace, you must be extremely good at what you do – the best in the world, in fact.