Why You Should Consider Tax Planning as an Advisory Service
The time for transformation may be now for firm leaders who are ready to shift client services from a singular focus on tax preparation and compliance work to leading with planning and advisory services. The Tax Cuts and Jobs Act, technology automation, a growing economy and clients seeking greater financial insights have cleared a path for tax professionals to deliver their true value through advisory services such as financial planning, wealth management, CFO services, and of course, tax planning.
In a June 2018 survey of Intuit® tax pros, only 27 percent of respondents said they were engaged in active tax planning with business clients, while 52 percent were still trying to understand the changes to the tax law. Only 10 percent were leading with tax planning and advisory services.
Here are four key reasons to consider offering tax planning and other advisory services to your clients.
#1: Earn Your True Value as an Advisor to Your Clients
Your clients may be looking for advice beyond tax preparation – or perhaps they don’t yet know the value you can provide with your tax planning. You can show them more value with year-round tax planning, and clients are usually willing to pay for the extra benefit they receive. In addition, you may find that your clients are happy to truly get the most of the advisors they have, rather than finding multiple advisors for different aspects of their finances. For more insights, Jeff Wilson II, CPA/PFS, says it well in his article “Cross-Selling Services to Your Clients.”
#2: Spread Your Work Throughout the Year
Clients appreciate proactive advisors who stay involved. Clients need help implementing tax strategies and being held accountable to goals throughout the year. Leading firms leverage QuickBooks® Online Accountant to engage with clients, and help with budgeting, forecasting and regular business reviews. If your firm is still swapping data files and nagging clients for information, tax reform creates an opportunity to upgrade clients to QuickBooks Online to automate much of the data entry and facilitate proactive collaboration with clients. Many cloud firms have eliminated the need for business return extensions because the books are completed and available early in tax season. When business returns are filed early, leading firms have additional capacity during the rest of the year to invest in planning and advisory services.
#3: Get Paid (More) Throughout the Year and Offer Clients Clearer Fees
Leading firms update their business models to align with clients’ expectations, and leverage automated billing processes to eliminate billing work. For individual clients, these firms often offer three packages of bundled services, which include higher fees and clearly communicate value beyond tax return preparation. As an additional benefit, they get paid before e-filing instead of invoicing after the fact. For business clients, leading firms offer three packages of bundled services at fixed monthly fees that provide clients with a range of advisory services to help them achieve their goals. Bundled services eliminate the non-value steps involved in traditional time and billing of capturing time, creating invoices, and printing, mailing and chasing accounts receivables. Firms who have made the change delightfully share that they would never go back to the old model.
#4: Gain a Competitive Advantage
If you make these changes, your firm will be on the leading edge of a revolution within the tax and accounting profession. New businesses overwhelmingly choose cloud applications, and tax and accounting firms are beginning to follow. Those firms who have embraced the cloud are reaping the benefits of automated data entry and categorization, shifting their value from leading with compliance to leading with planning and advisory, to help their clients prosper It’s not an easy or fast to change to make; it requires training, changing in workflow, and a new mindset; but leading firms say the investment is worth it and they would never return to the traditional model.
Even when firms commit to focus more on tax planning and advisory services, they often don’t know where to begin. Leading firms who have embraced the cloud and advisory services have these three actions in common. They:
If you’re ready to begin leading with tax planning and advisory services with these three steps, start your journey today with your personalized guide to becoming a tax practice of the future.