21 Things You Should Start Working On NOW In Order To Have Your Best Tax Season Ever In 2016

A quick question for self-employed tax professionals and firm owners: Did you have a crappy tax season in 2015?

If you answered, “Yes”, then I have a disturbing piece of news for you: It’s 100% your own fault.

“The nerve!” I hear you saying.

But think about it. If you got stiffed by any tax prep clients this year, that’s on you for not getting paid prior to filing. If you failed to hit revenue targets, that’s on you for not raising fees, engaging in client retention efforts, or attracting new clients. If you had too many returns that you hated doing, that’s on you for not being selective in your clientele. I could keep going, but I think you get the idea.

As small business owners, we are 100% responsible for the types of clients we work with, when we work, how we work, and even how much revenue we generate.

If you’d like to reduce stress, improve profit margins, and just have an overall better personal experience for yourself, your staff, and your clients in 2016, here are 21 things you can start working on right now in order make it all happen. You don’t have to do all 21, of course, but even if you just do a few, I guarantee you’ll have a better tax season.

1. Go paperless. You’ll save time, money, and headache. Before you say it’s not possible, understand that tens of thousands of us already do it, and have been as paperless as legally possible for years. Technology is your friend. Scan and return paper client documents if you can’t import digital copies. Charge a premium for paper copies of returns; $35 is not uncommon. Deliver client copies on USB flash drives or via secure client portals. Yes, people will resist change, but they’ll get over it.

2. Pick a niche, and OWN it. Are you actively engaged in a particular hobby? Are you active in a fraternal organization? Do you have two dozen existing clients all at the same employer? Then you have an affinity within a niche group. Every single person in that niche group in your local area should know who you are and what you do. Proactively engage with fellow group members right now. Make special offers to them for your services during each of the various tax seasons: Tax prep season, tax planning season, representation season, etc. No other tax professional should even have a toe in the door to this niche group.

3. Schedule a February or March vacation. Do this now. Schedule a week off for yourself in the middle of tax season. Yes, I’m serious. Yes, many of us do it. In 2015, I took off the first week of March to attend baseball spring training in Arizona. Doing this not only gives you a break, but it forces you to put systems and staff in place to run your practice like a real business.

4. Contact your existing clients monthly. Starting now. And going on forever. The number one reason that clients cite for switching to another service provider is that they simply didn’t feel valued. Make your clients know you value them, and are available to them year-round. The cost of doing monthly contacts via direct mail is less than $1 per client. It’s the best client retention money you’ll ever spend, and far more effective than just giving out some little tchotchke at tax prep time.

5. Cross-sell tax planning services now. For the average Joe or Jane Accountant that offers a standard menu of services, there are three distinct “tax seasons” throughout the year on the 1040 side: Tax preparation, taxpayer representation, and tax planning. Right now you should be actively marketing those tax planning services, as most folks will be looking to your for guidance on how to save on their 2015 tax bill after it’s already too late. Communicate that to them now, and get paid for this valuable service.

6. Plan out your new client marketing calendar. If your goal is to grow your clientele, you need to put your 2015-16 marketing campaigns on an editorial calendar, just like a magazine editor does. You need to know when various ads are being placed, what mail pieces are going out, what online lead generation campaigns are running and when they start and end, etc. When it comes to marketing, the old adage of “failing to plan is planning to fail” definitely holds true.

7. Fire your worst clients immediately. You know who they are. The people that waste your time, don’t pay on time, gripe about your fees, expect you to complete rush work when they’re the ones that are coming to you late. Not everybody deserves to be your client. If you allow these people into your world, then any of the headache involved with servicing them is on you. Write them letters with referrals to other firms, stating that you can no longer continue to serve them due to changes in your own business model. Never look back.

8. Raise your fees. The average practitioner I work with hasn’t raised their fees in years. Meanwhile, their cost of doing business has gone up. Their personal living expenses have gone up. Never forget that federal economic policy is to always be pushing for one or two percent inflation per year. If you don’t at least keep your pricing ahead of inflation, you’re slipping behind each year. If it’s been a while, I think it’s best to raise your prices substantially in one fell swoop rather than trying to catch up over multiple years.

9. Start using a computerized office management and CRM system.Using an electronic customer management system simply makes sense. It makes marketing easier, it makes tax season easier, it basically makes everything easier. There are several good office management/CRM systems out there just for tax offices, including ATOM, Office Tools Pro, offerings from Drake and CCH, etc. Use the tool that works best for you, and force your staff to use it, as well.

10. Add audit “insurance” to your tax preparation services. For an additional $39 to $99, you’ll respond to notices, document requests, random CP-2000 letters, etc., on behalf of your client. Pre-sell this as an add-on to your tax prep fee. It’s quite popular at other firms already, and it’s even bundled as an offering in Turbotax, so consumers are aware of it. It’s not only a great value add for client, but a great and simple bonus revenue stream for you.

11. Convert tax preparation to a monthly subscription service. Create three tiers of service, and give them fancy names. Silver, Gold, Platinum. Sapphire, Ruby, Diamond. Pro, Deluxe, Premier. Within each tier, offer a bundle of services that are legitimately helpful to clients in that tier, and that they commonly use throughout the year anyway. Be sure to include the value of things you currently do for free (come on, I know you do it!). Include things such as financial reviews, quarterly tax planning, tax preparation, review/respond to notices, client seminars, etc. Break the fee up monthly. Congratulations, you just evened out your cash flow for the entire year. If this sounds totally new and crazy to you, understand that thousands of tax professionals across the country already operate this way.

12. Become a public speaker. In our society, one of the most impressive things somebody can do is get in front of a group of other people and speak. Not only does this build instant authority positioning, but it’s an amazing marketing opportunity for you. Get in front of groups, such as at senior centers, real estate brokerage offices, union hall meetings, construction trades safety meetings, etc. Be the person that brings donuts, and talk for five minutes on a topic relevant to them. I call these “tax talks”. After your tax talk, stick around until after the end of the regular meeting, and schedule new client appointments right there on the spot.

13. Hire staff. You only have 24 hours in the day. You’re doing other things for many of those hours. Hiring staff and plugging them in to your operating systems allows you to multiply those hours. This multiplication isn’t linear for a small business — it’s geometric. Hiring staff is one of the biggest sources of leverage you can create in your business.

14. Eliminate services that you dislike or that aren’t profitable. Evaluate all the services on your menu and evaluate whether things should even be on there. Just because you’re a CPA doesn’t inherently mean you need to offer all accounting services. Think about how many CPAs only work in tax, and don’t do writeup or audit work at all. Is payroll actually profitable for you? Do you hate doing 1041 returns? Then don’t.

15. Evaluate and improve your physical office environment. Nobody likes walking into a shabby office. Want a cheap way to get a professional 3rd party opinion? Ask a real estate agent or home stager to perform a basic “curb appeal” evaluation of your exterior and interior office space. Take their suggestions to heart.

16. Ask for referrals from clients. If you don’t have an active word-of-mouth marketing campaign, you’re losing out on the single most profitable source of new clients. There is no lower cost of client acquisition (a key metric you should be tracking) than from a referral. Whether you use a paid ($25 to $50) Refer-A-Friend program for tax prep, or you send letters to high-end clients asking for referrals and do the occasional gift basket or client appreciation dinner, this most basic of marketing campaigns should be running 24/7/365 in your business.

17. Know your numbers. Up above I mentioned knowing your cost of client acquisition. To me, this is the single most important number that I track. When I know how much I have to invest to acquire a client, then I know what I need the Lifetime Customer Value (LCV) of that client to be. LCV is the amount of revenue a client will generate for your business over the lifetime of your business relationship. This is the second most important number to me. There are other metrics you need to know and track also. Know your numbers that reflect the health of your business. These metrics are what allow you to make informed business decisions about marketing, staffing, service offerings, and more.

18. Set written goals. Ambitious ones. Again, this only applies if you desire to grow. Create targets for your revenue growth, and milestone dates for hitting those. Create goals for smoothing out your annual cash flow curve. Make them SMART goals, and take action towards them. It’s become a cliche in the business world, but it’s still true: Reasonable yet ambitious goals, written down, and with a deadline attached, are more likely to be achieved.

19. Take time away from your business. Often called a “retreat”, this should be more than just an opportunity for firm partners to go skiing together. Even if you are a solo practitioner, take a long weekend away from your business, staff, family, friends, etc. in order to work on your business, rather than in your business. Use this time to reflect on your successes and failures. Use this time to formulate new marketing plans, new service offerings and bundles, and more. It is probably a bit self-serving for me to mention this, but try to find other practitioners you can get away with, in the form of a mastermind group.

20. Run your entire practice based on systems. When you operate your business via written procedures, you ensure operational efficiency and consistency of quality. Processes help you avoid mistakes, and when mistakes do happen, having a written procedure to edit will eliminate the mistake from happening again. Systems are the single most valuable addition you can make to your practice, hands down.

21. Give back to your community. In 2001, while still on active duty in the Navy, I was tasked with placing into operation the single largest Military Tax Assistance Center in the US military. The MTAC program was awesome, providing a valuable service to military members and their families. DOD shut this program down, and it was rolled into the IRS VITA program, which I’m sorry to say has not maintained the service levels of the former MTAC program. In fact, I’ve been 100% unimpressed with the VITA program and how it’s operated. Because of this, I encourage all tax professionals to offer pro bono 1040 preparation services to those in need in their community. Even setting up just one day per month during tax season will provide a tremendous value to your community. You shouldn’t do it just for the PR value, but that can definitely be a good side benefit. Set up shop for a day in a church, senior center, public school, etc. The community supports your practice, so I think it’s important to give back to your community.

So there you have it: 21 suggestions for vastly improving the quality of your life during the upcoming tax season. Some of these tips take just a few minutes, while others take a few months. Getting started now on implementing these ideas will give you the lead time necessary for having them in place come late January when tax season starts.


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