You work hard for your income and we want to help you make the most of every penny you earn. A big factor in that process is shortening the time to collect on your invoices. Most tax professionals send an invoice with net 30 terms, and from what we hear from you, it can take even longer than that to get paid. So, here’s a little math to show you how that time delay can affect your profits.
Let’s use some round numbers for easy calculations. Let’s say you typically invoice $100,000 total to your clients per year. If you have that money in hand, you can be investing it and earning income on it, and if you don’t have it but have to pay staff or other bills, you’d have to borrow. So, whether you look at the potential income it could make you or the potential interest you’d have to pay on it, there is still a cost associated with not having that money in hand. For calculations, let’s use a simple annual interest rate of 5 percent – and we all know it could easily be higher. If we divide this rate by the number of days in the year, we get your daily interest rate of .0137 percent. It sounds small. You might think it’s nothing to worry about, but when you consider $100,000 of income multiplied by that daily rate, the cost of net 30 on your accumulated receivables is $411 ($100,000 x .0137% daily interest rate x 30 days). That’s a lot of your hard-earned money.
What if you could collect sooner on your invoices? What if you could avoid having to nag late-paying clients, preserving your relationship and your sanity? What if you could even save time creating the invoice and streamlining this process into your tax return filing?
Now, you can! Pay-by-Refund is a product that enables taxpayers to pay for tax preparation directly from their refund. According to the IRS, in 2014, 79 percent of all individual income tax returns yielded a refund 1, so it is likely that the majority of your clients can take advantage of this convenient service. Taxpayers are charged a low $35 bank set-up fee on Federal returns for the service, and this fee is deducted from their refund, just like your tax preparation fees². There are no additional costs to your client, and there is no cost to you for this service. You get paid as soon as the refund is processed, and the funds come in electronically from the IRS. So simple. So easy.
Plus, you can earn an additional $10 per Federal refund with Pay-by-Refund2!
It is important to note that Pay-by-Refund is not a loan against the refund. It is accomplished in partnership with a participating bank that creates a temporary bank account for the purpose of receiving the refund on behalf of the taxpayer. Once funded, the taxpayer can withdraw the funds from an ATM or have the funds loaded onto a prepaid debit or credit card. It might sound complicated to facilitate this, but it couldn’t be simpler. The bank handles the set-up and you enable the process in just a few minutes. The forms you need are integrated into your software.
It’s easy to offer Pay-by-Refund to your clients. To get started, you must be an approved IRS efile provider and must sign up and be approved to issue refund transfers by one of our participating banks:
- Santa Barbara Tax Products Group (TPG)
- Refund Advantage
- Republic Bank
- River City Bank
Pay-by-Refund Benefits Summary:
- Provides your clients with a convenient payment alternative to checks or credit cards
- Reduces time spent invoicing and collecting receivables
- Eliminates out-of-pocket expenses for your clients to get their taxes done
- Low $35 bank set up fee per Federal return2
- Provides you with an additional revenue stream for your business
2 Offer available for current ProSeries, Lacerte and Intuit Tax Online customers only for a limited time only. Credit applies to Pay-by-Refund transactions through a participating bank only. Participating banks are Santa Barbara Tax Products Group, Refund Advantage, Republic Bank, and River City Bank. You must adopt industry refund transfer best practice principles by charging customary and reasonable processing fees to be eligible. Earn a $10 credit for every federal Pay-by-Refund transaction funded through a participating bank from Jan. 1, 2016 through April 30, 2016 beyond the number of Pay-by-Refund transactions (formerly called “Refund Transfers”) from the prior tax year. Credits will be delivered from participating banks by May 31, 2016. $35 bank set up fee applies to each federal Pay-by-Refund transaction. Additional fees apply to state Pay-by-Refund filings. Terms, conditions, pricing features and support for all offers subject to change without notice.