I am relieved that tax season is over. This year, more than any other, seemed to have its challenges, and I think that may be because I decided to implement a few new ideas. Some were good, some less so.
Receiving payment for your product is always an “end goal,” and no one wants to chase receivables. Most of my clients have been with me for a decade, and while I do not worry about them, I do get concerned about new clients. This year, I decided to accept credit cards and offered a 3 percent discount to those who paid by check. I listed that in my engagement letter which each client must sign.
What I did not take into consideration when coming up with that idea is how the software would handle billing issues. I knew that in the billing module there was room for adding a discount or surcharge. What I did not realize was that it only worked if you billed per form or time, or something that the program could calculate.
My method of billing was a fixed fee, and because I entered a fixed fee, the 3 percent discount was never calculated. That meant for each bill I had to manually enter a phrase: “Payment by credit card is X and payment by check is Y.” Not one person paid by credit card. That idea is going in the circular filing cabinet.
I requested that my computer-savvy clients utilize a secure electronic portal to transmit and receive tax documents. That idea was received better than I had hoped, and I will continue using it in the future. The portal cost only about $100 per year and should help prevent personal data from being hijacked, as it could if transmitted via ordinary email. The request also gave me an opportunity to tell my clients that I have some legal responsibilities to safeguard their data. I was firm in not accepting attachments. People had to use the portal or mail me the documents.
In 2016, I used one of these lead-generating services and was very disappointed by the results. I found that most of the people were looking for returns done cheaply or guaranteeing large refunds. I am an enrolled agent and have absolutely no interest in dealing with taxpayers who are focused on getting refunds as opposed to filing an accurate return.
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I had a few credits left over for use this year and I changed my approach. I looked for people who had tax issues instead of simply looking for tax preparation. The results were much better and I added two quality clients.
One of the best things that I did this year was to establish protocols and stick to them. I sent out the engagement letters early, along with a short organizer. I knew from the past that many people had trouble filling out the organizers but that everyone can answer a bunch of yes or no questions. I made sure that everyone answered those questions, including the health care and the foreign bank account questions, regardless of how long I have known them.
If people were using the portal, I would send a copy of the return along with an 8879, and if they agreed with the return, they would sign the 8879, pass it back through the portal, and I would e-file the return. That speeded things up for me.
The best thing that I did, though, was join a peer group on Facebook. I was surprised by the generosity displayed by some long-established tax professionals as they shared their tips on practice management issues and tax issues. We all have come across a new issue, something where we think we know what to do but need that gentle encouragement, and that was shared in the group.
Of course, the best advice was the simplest: “Do taxes, make money!”
About Morris Armstrong
Morris Armstrong, EA, is the owner of Morris Armstrong, EA