When many people first go into tax planning, they feel they do not have enough information about tax planning to be able to move forward with clients and with their business.
They are intimidated by the US tax code which is 70,000+ pages long, and that is just the US.
Those 70,000+ pages do not encompass the knowledge they need in order to help clients save tax internationally. Ultimately, even though people know intellectually that they will never be able to know everything about tax, they become paralyzed with the fear that they are not prepared.
Consider this graphic below (click read more to view the entire graphic)…
If your goal is to get the client to the most optimal tax situation where they are getting all the savings possible under the tax code, that is simply not possible.
However, if you change your perspective to getting the client to a better state than where they were before they started working with you, that is completely achievable.
“Having a tax planning business is not about having absolute knowledge of the tax code. It is about having enough knowledge to help a business owner save money in taxes.”
If you can reach a higher level of awareness about where you are now and how you and the client fit into the graphic, you will have more confidence to do tax planning for clients.
To learn more about the tax planning process, click the button below!
1. Previous year returns 2. Current year returns 3. And a plan for the next year’s returns
In addition, included in the tax plan will be an estimated savings amount calculated on the same sales consultation.
Bundle that offer into a packaged fee of anywhere between $2,500-$9,500 (depending on the client’s specific situations and estimated savings) and now you have a comprehensive tax plan to offer to the small business market.
Want to dive deeper into the Tax Planning Sales Script and specific wording to close the deal?
Want to know the biggest killer of any monthly accounting or CFO work?
After speaking with over 7,000 accountants, I’ve seen the area where these engagements go south and it all boils down to 1 word…
Resentment for the client starts to build when the accountant begins to realize the amount of work and effort that goes into the engagement that is eating away at the profits…
And even worse…
When they start to lose money.
So how do we fix this mess?
A couple of options I’ve seen successfully work for firm owners includes either:
1. Restructuring the Old Engagements…
2. Sell in New Clients with the Correct Pricing & Scope
If you move forward with option 2, you are able to get an understanding of how the engagement is progressing in order to determine if you can go back to your old engagements and restructure the pricing/scope.
But how do you go about identifying the right pricing structure for these types of engagements?
I define the scope of accounting & CFO services into 4 different tiers:
Unfortunately, when talking to most accountants, all 4 tiers are LUMPED together into 1 low price ranging from $100-$300/mo.
When the LOW & LUMPY priced clients start reaching out to those accountants, the resentment continues to build. And the longer you engage with questions and move out of scope, the expenses associated with the engagement continue to rise.
So I want to know…
What’s the bare minimum you could offer to get the client to pay xxx?
What are the 20% of activities that make up 80% of the value you offer to your clients?
And the problem is your tax prep fees are what we call LOW & LUMPY.
Low price and lots of difference services LUMPED together like these:
-Free Tax Assessment -Preparation -Planning -Implementation of Planning Strategies -Quarterly Estimates -All tax support questions for 12 months
And the truth is, most preparers are doing those (and not well) because their prices are so low, that they simply can’t get to it.That stops TODAY.
And here’s how we do it…
1. Make a list -Business Returns -Schedule Cs -Monthly Accounting Clients (not currently on tax prep) -Sort by revenue / income
2. Reach out to them (via text, email, Facebook message, or a phone call) -At least the top 25% by income
3. Provide more VALUE (tax planning, new return, accounting side..) -Mid year check-in -Update on the business this year and get…2019 & 2020 projections, 2019 estimated savings, 2020 estimated savings + every year going forward -Make them an offer using a tax planning sales script (if possible) -Price each of the services separately <– no more lumpy pricing!
That’s how Christina charged $9,000 for tax planning, then $3,000 for tax prep for a client that paid $650 the year before! And that didn’t even include implementation….
4. If no offer, let them know requests lists and updates will come out in January
5. Send those that didn’t take planning a price increase letter -If it’s a <$700 business… Double the fees -If it’s a <$400 individual… Double the fees
6. Selling the stand alone 1040 returns (NOT Schedule C) before tax season (if it’s over $50k revenue)
And if you do that, you’ll be like Melanie:
“This year we double fees on tax prep because I finally got it, thanks to Andrew. We lost 30% of our clients, but we increased our revenue by 40%. Thanks for giving me the courage to finally see my value.”
If you want the EXACT email script + tax planning script to upsell prep clients into $50,000-$30,000 engagements…