Discussion:Tax Practice
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Managing Client Visits
| 20 February 2009 | |
| I've been in the tax practice business for about a year, am a CPA, prior experience 20 years corporate accounting. I'm looking for the best way to manage my client visits.
Background: I'm finding that when I see a new client, I have them bring prior 2 years returns and current year documents, however if priors were client prepared I typically see inconsistencies and start asking questions. However, when looking at other Tax Almanac comments, I see that other preparers (efficent folks) do initial meeting and return at the same time. Question: What is the common practice? Do most preparers address prior years tax issues on a new client, i.e. inquire, have client bring additional documents and file amended returns? Or, is it more common to just deal with the current information? More specific question: I have a client with disallowed rental RE losses from three years ago. Client self prepared last two years and didn't report depreciation or carryforward of disallowed losses. To report cumulative disallowed losses in 2008 (as client plans to sell property this year), do I need to amend 2006 & 2007? Thank you so much for your assistance. | |
| 20 February 2009 | |
| Not sure about common practice. I usually ask to review prior return and meet with the potential client to learn what their objectives are. Information gathering.
I set a appointment to propose a fixed price for the list of services I plan to provide. Yes I would amend incorrect returns. | |
| 20 February 2009 | |
| Thanks Larry, I'm trying to be more efficient, but also want to do what's best for the client. So, I'll summarize the benefit and (my) cost for the client so they can decide. | |
Southparkcpa (talk|edits) said: | 20 February 2009 |
| I have been doing this on my own 20 years, do about 300 1040's which is not a lot in comparison to others. If you have an office, with a receptionist it would help a little.
What I do and would do is as follows. In my biz all new clients get a face to face if possible. Before the interview, they are given a checklist of what to bring. W2's, int inc, exp doc's etc... I then ask what's on the retun that requires a CPA. I ask them directly, why aren't you going to Block... or why weren't you happy with who did it last year? Then they reveal things that will help you.
All this and sometimes something is still missing. MOST important, I train them to become "drop off" clients the next year. Of the 300 returns, i sit with maybe 40. That way, you can hire others the following year to do basic input and you put the "icing " on. | |
| 20 February 2009 | |
| Since you are opening a new shop, you are likely to get business clients who have been fired by other pros.
Instead of worrying about what you will say, pay close attention to what they say. If they mention something more than twice, or seem to come back to an issue...especially if it's a sensitive issue...hold the presses and investigate that issue, don't belittle it in an attempt to get the client. Always be on the lookout for the client's hidden agenda: and there will always be a hidden agenda with a fired client. You don't want to clean up dirty laundry unless you are compensated properly. Some, you just plain want to avoid. | |
| 20 February 2009 | |
| Thank you both so much. I am definitely seeing people that were fired. I suspected at first and then came to understand why. But really what you are both saying is to listen to the client. The client, with proper questioning, will reveal what they need and why so I can set fees more appropriately (I've also been told my fees are cheap). In addition, I love the part about training my clients to be drop offs in future years. | |
Taxman3132 (talk|edits) said: | 21 February 2009 |
| the first year that i take on a new client--i consider it a break-even deal(no $$ made). it usally takes more time and the profit margin goes way down. but--i tend now to look at year 2-? . you train the client to bring what you need and you will find that future years are very profitable. i just did a 1065 for a plumbing contractor in 20 minutes and charged $750. it was not like that 10 years ago when i spent a lot of time training the cleint the first year for exactly what i needed. everything is set up in the computer-hardly anytime used on this client this year. sometimes though if you complete the return too fast, you may have to explain that you do more than just imput numbers on a computer. | |
| 21 February 2009 | |
| Watch out about that drop off procedure in future years.
I generally meet with my clients for drop off each year unless they choose elsewise. They seem to value this and every year I get new clients who come to me because they do not get any personal attention from the other guy. The other complaint I hear is that, at bigger firms, they have to deal with a new person each year. Most of my clients have something to talk about, like rental property, a small business, or estate planning matters. This year everyone has portfolio issues to discuss. A 30 minute meeting allows you to keep up to date on your client's issues. They will appreciate this. | |
Rgtaxservice (talk|edits) said: | 21 February 2009 |
| I have a 60/40 mix of dropoffs and client consultations. Dropoffs are optional for the client's convenience. I always consult with first time clients. I never do the return during the consult for several reasons.
1 - It cheapens the product. It makes you look like a data entry clerk. Hard to charge $750 for a 20 minute return (as mentioned above) if the client watches you do it. We get paid for what we know, not what we do - but clients don't always see it that way. 2 - It gives you time to throughly review the return and make sure nothing was missed. This also allows you time to research items you're not quite sure of when sitting across from the client. You can always call them for additonal info or clariifcation. 3 - It allows you to better schedule your time. My weekends are face time for new client consults or client pickup/review only. Week days are for doing taxes...no appts and limited phone time. You're find a system that works for you. It took me a few seasons to find a groove that works for me and my clients. | |
Southparkcpa (talk|edits) said: | 21 February 2009 |
| I agree with RG and Crow 2 posts above. I however DO sometimes key in the "basic" for the many easier client appointments. They want a "feel" of the refund/owed. I then tell them, I will finish the retun later. What I have learned about the drop offs is that many top end clients (The $600 1040 and above) value their time and THEY want to drop it off. As crow states, It is their choice. I simply let them know they can drop it off.
RG.... good post! My drop off ratio is more like 75/25 and I have many corps that take 1 hour that I get $1,000 for very similar to RG. I agree...It takes time to find your groove. | |
Taxman3132 (talk|edits) said: | 21 February 2009 |
| rg--i did not do his partnership return while he was in my office. we talked about the economy, lack of bank loans, and general stuff for 30 minutes. i did the return after he left. my point was that when starting a tax practice or accepting a new client-you have to look past the first year of billing/hours worked to see the VALUE of that particular client. i should add that the $750 charged basically comes w/ year-round tax advice. | |
Rgtaxservice (talk|edits) said: | 21 February 2009 |
| Taxman, I didn't mean to imply that you did. I was just using your post as an example of the actual time it takes to do a return vs the fee, and what a client might perceive if they watch you do it. Sorry for the muddled post. | |
Practice Management Forum Requested
| 21 February 2009 | |
| I do not have any issues with this question. I do want to suggest though that we add a Practice Management forum to the site. | |
Wkstaxprep (talk|edits) said: | 21 February 2009 |
| I always ask for last 3 years, and if there is a major ommission, which many times there is, such as missing the education credit, or taking the tution deduction when the credit was more beneficial, or i did one last year where the prior accountant entered $0 cost basis for 5 separate stock sales that totalled over $100,000 when the cost basis should have been about $80,000 ! asssuming there is little to no exposure, ifile the amended return. after you get the client money back, giving them a good premium fee for the current years (and hopefully future yrs)returns certainly goes a lot more smoothly :) now, i also charge a good fee for the amended return, whcih i never used to do, amazingly.
as far as walk ins, i do prepare some returns while the client hangs out in my office and they talk about anythig from taxes, to social stuff, etc but only do this if the client has been a long time client whose tax situation i know very thoroughly AND they understand the fact that i'm not getting paid for unching numbers but for knowing the tax laws, making sure the return is correct, doing tax planning during the year, making sure they considered all tax saving mechansisms, etc. many times, doing the return while the client waits, the client will say soemthing that triggers a tax deduction that would have been missed otherwise (for example, "i lent money to a coworker a few yrs ago, and i have a signed promissory note but there is 0% chance i am getting that loan back" hence, a possible nonbusiness bad debt. just an example I meet with about half my clients in person. | |
Rgtaxservice (talk|edits) said: | 21 February 2009 |
| I second the idea for a Tax Practice Manangement forum. Does the motion carry? | |
| 21 February 2009 | |
| We have a Business Growth forum, wouldn't that be an appropriate place for us to move questions about practice management? | |
| 21 February 2009 | |
| Trillium - Business growth and practice management may overlap somewhat, but they are not the same thing. I manage my practice, but I have all the work I can handle. My business is fully grown and I am to old to move to a bigger office, hire staff and so on. But I still need to manage what I have. | |
