How Tax Planning Adds Value to Client Relationships

• Helping your client
• Boosting your firm’s revenue
• Improving your year-round cash flow

If you create the right service for your client, it’s a win-win situation for all parties involved. You can bundle your services and even create recurring revenue for your service. A few first-hand recommendations that we have are to:

Focus on Tax Planning – Everyone Needs It

Your main focus when offering tax planning should be to:

1. Save clients or businesses money on their taxes through strategic, smart planning
2. Control tax bills so that, come tax time, there are no unhappy tax bill surprises

When you file your clients’ tax returns, they often think you’re able to maximize their tax savings. Unfortunately, you’re only able to help clients reduce their taxes so much when filing returns. However, tax planning can help clients lower tax burdens strategically.

Both your clients’ and your own focus will need to shift when offering this new service.

You’ll need to proactively check in with your clients, adjust and adapt the plan throughout the year and really streamline the process as much as possible for each client.

Your goal: avoid tax surprises.

Create a Streamlined Process for Each Client

If you’re not checking in with your client and proactively getting as much tax information as you can throughout the year, you’ll likely miss ways that could have saved your clients’ money on their taxes.

Creating the right processes has helped my firm offer clients the best tax planning services while reducing tax surprises along the way.

A few of the processes to incorporate into your services are:

• Plan When Changes Occur: If the year starts off slowly or rapidly, you may need to reevaluate and adjust the tax plan for the year. Forecasting can help you better grasp the business and tax implications that the change will cause.
• Mid-Year Update: For every client, it’s good to check up on them mid-year to create a rough tax projection. You’ll want to sit down with the client, ask how business is going, what their goals are for the remainder of the year, and what changes they expect before the year’s end.
• Fall Update: Once September hits, it’s time to schedule your fall meeting with your client. You should be collecting tax information to update your tax projection. You’ll need to fine-tune the tax plan for the remainder of the year to meet your client’s goals.

Since every client has their own goals, you’ll need to take a broad approach to your processes for each client. You may need to have quarterly check-ins with clients, or you may need to adjust your approach in a different way.

Ultimately, your approach must be aligned with the current and future goals of the client.

If you help your client reach their goals, you’ll build a long-lasting relationship.

Finally, be sure to consider tax law changes and how they may impact future taxes. For example, you may find that a single tax law change can upend your plan to defer taxes this year.

Nail Down Your Pricing

Pricing is always a sticking point with clients. You want to create a pricing structure that benefits you and the client. Ideally, you’ll add your tax planning as part of your monthly or quarterly fee.

Creating tax planning bundles and packages works well because it allows you to offer services that fit into an array of budgets.

However, I do recommend aiming for recurring revenue. You may offer one-time payment options, but you’ll likely boost your firm’s cash flow the most with recurring revenue models. Since every client base is different, you want to think of all aspects of the service ahead of time so that your pricing is profitable.

At our firm, we never want our clients to worry about:

• Calling us with a question or concern
• Getting an unexpected bill from us

Upfront, proper pricing and expectations around communication ensure that we’re able to help our clients minimize their tax burden, and they never have a tax bill that we could have helped avoid if communication were better.

Throughout the lifetime of your accounting firm, it’s crucial to adapt, change and be ready to provide immense value for your clients. While tax planning services are a go-to option to add value in 2022, you must always be prepared to add in additional services in 2023, 2024 or beyond.

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Christopher Hayden, CPA, CMA, CGMA, is the managing partner of Hayden Nelson & Yoder, a CPA firm based in Pennsylvania. You can learn more about him and/or the firm on their website here.