“Failure to plan is planning to fail,” according to the wisdom of Ben Franklin. As tax preparers, we’ve all had those client situations where we say, “I wish you had told us you were planning to do ‘this’ because we could have avoided some tax with careful planning.” All it takes is proactive tax planning – and tax season is the perfect time to update your service offering to prevent that awkward situation.
Here are four tips to make tax savings the best part of your services.
#1: Make tax planning part of your core offering, not an optional service. Based on the results of a survey during an Intuit® virtual conference, on average, tax professionals only provide planning for only as many as 30 percent of their clients. By bundling tax planning services into every tax engagement, firms can address the most common complaint from clients that advisors are too reactive.
Proactively communicate that you want to save your clients money. This is an opportunity for you to flex your expertise and differentiate your services from other preparers. Consider updating your process to let clients know that you are bundling tax planning services in with every engagement. For example, a best practice is to share a calendar link to enable clients to create their own planning appointments later in the year. Also consider limiting planning meetings to phone and video meetings. They are more convenient for your clients and more efficient for your team.
#2: Standardize your tax strategy checklist to review with every client. Most firms follow the tax planning principle of rinse and repeat: Start with the prior year’s tax return and incrementally make changes in a tax planner program to adjust the following year’s liability. While this strategy delivers accurate tax estimates, it only offers incremental tax saving strategies. Instead, develop a checklist of your favorite strategies for consideration with every client. The longer the better. Ask open-ended questions about client goals and plans, and evaluate a wide set of potential strategies that can yield significantly more tax savings than the traditional process.
#3: Standardize your tax strategy explanations. While the numbers are unique to each client, the mechanics of each strategy do not change. Clients want to hear your expertise and the tax savings opportunity, but instead of repeating the same strategy multiple times, standardize your explanations for sharing. For example, instead of using a written explanation, consider a two-minute video to share the strategy and benefits, including any actions clients will need to take. Video creates a more personal connection with clients than written report, and reinforces your value as a tax strategist more than a tax preparer. Video links are also easy to embed in letters and email templates.
#4: Communicate tax savings to clients on a regular basis. Use the standardized tax strategy checklist to track the tax savings from each strategy for the current year, as well as past and future years. Most tax savings are the result of multi-year strategies applied consistently, which is why meeting at least annually is an important part of the process. Summarizing the tax savings from the primary strategies you use also makes your clients feel better about the fees they pay, and engages you to navigate tax law complexities. Some tax professionals even create a return on investment of their fees to reinforce their tax strategy value.
Reframe the value of your services
It’s time to focus more on tax strategy and savings, and less on preparation. In your website messaging, mailers, organizers and conversations, elevate tax planning and tax savings above tax preparation. With proactive, consistent tax planning, tax preparation becomes a reconciling event instead of the primary service you deliver. Best of all, planning helps prevent those avoidable tax surprises and awkward situations that can result from reactive tax preparation.