Very few businesses experience seasonal cash flow challenges quite like tax advisors and tax preparation firms. The tax season rush can be a profitable one, but to truly grow and nurture your business while ensuring that the bills can still be paid, it’s time to rethink your sales and marketing strategy.
If your firm is looking to overcome cash flow challenges and grow revenue streams by becoming a trusted advisor to clients beyond tax season, here are six strategies to explore:
1. Start Early and Move Quickly
The earlier you can get your clients’ year-end information, the better, so ask for all their information at the end of January. This can help you process their returns faster, while also increasing your productivity and profitability.
Once you have a client’s information, focus on completing the return as quickly as possible. Letting client work sit unfinished is your most expensive asset. Make sure you’re constantly contacting clients to obtain missing information and adjust work schedules so that you can focus on one client’s return from start to finish.
2. Bill in Real Time and Accept Electronic Payments
Just like letting client work sit uncompleted, letting client work sit finished but not yet billed is an extremely expensive asset. You can bill more frequently to limit client push-back and improve your cash flow. Try setting a fixed time each week to bill clients or create a habit of billing when you wrap up their returns.
As part of regular billing, you’ll want to make sure it’s as easy as possible for your clients to pay you. Many online payment services allow your clients to “pay now,” directly from the invoice itself. And, instead of waiting for a check in the mail, online payments are fast and easy, which means you can get paid almost instantly!
3. Manage Your Own Cash Flow With Technology
Running a seasonal business makes it all that more important to understand your cash flow, in order to make sure that your business can make it through inevitable cash flow gaps. Make sure you understand both your fixed and variable expenses, as well as when those expenses will hit.
Of course, since tax advisors and tax preparation firms are subject to these seasonal cash flow challenges, there are also tools to help you keep your business on track while you wait for your client’s payment.
4. Start Adding Value Around Tax Time and Identify New Opportunities
Tax season is the best time to start promoting the value that you can bring to your clients, over and above tax preparation. Use this time to uncover your clients’ pain points and ask them about their one-, two- and five-year business plans. You don’t need to go in with a heavy sell; start warming them up to what you have to offer by pointing them in the direction of soft-sell resources, such as your newsletter, webinars, workshops. If you’re not doing these already, now is the time to start!
Then, once tax season is over, regroup and review the clients that came through your door. How many of these clients came to you with inadequate records or incomplete QuickBooks® files only to find that they spent more (and you spent longer) on their tax preparation services? These clients could be prime candidates for your services.
Another potential candidate screaming out for a trusted advisor is the client who is 100 percent committed to his or her business, but struggles with the financial side of things. If this client only comes to you once a year, there’s an opportunity right there. Educate the owner on how you can help manage and understand the finances beyond tax season. If the owner has plans to grow their business, consider offering a free accounting review one-on-one session and look for areas where your services can add value.
5. Market Your “Above and Beyond” Services to Those Who Need Them Most
You know that you do so much more than tax preparation services, but your clients probably have no clue that you can help them out in so many different ways.
Again, go back to your target clients’ pain points and carve out a set of solutions that fit their needs or your wider niche. For example, if your focus is small business tax and accounting, you’ll know that cash flow is a huge burden for your clients. Look for opportunities like these. For example, you could start by targeting your “low-hanging fruit” clients, such as seasonal businesses that could benefit most.
A great way to market your tax services is to offer pre-bundled packages. Chances are that your customers don’t want all the services you offer, but a good way to upsell them beyond tax preparation services is to offer a fixed-price packaged service that caters to their immediate needs.
6. Use Marketing Tactics That Align With Your Plans for Growth
If you want to add new clients through traditional marketing tactics that drive awareness of who you are and what you do are a must, polish up your website, take advantage of direct mail, advertising, case studies and have a good, time-bound call-to-action. It might be a free eBook or a webinar (live or on-demand).
Don’t forget referrals. Choosing a tax professional is a big decision, and referrals can represent a substantial source of new client income. Some referrals will come organically, but setting up a client referral program can also help. You could offer a small token of appreciation to satisfied clients in exchange for each referral, but don’t feel you have to. If a client is happy with your service, the referral should flow naturally; sometimes, referral sources just need a little nudge.
At the end of the day, what separates a seasonal tax preparer from a trusted advisor is passion and a drive for excellence. If your goal is to become an indispensable part of your clients’ teams, take steps every day to ensure you are doing everything you can to demonstrate your commitment to their success.