Mid-March 2019. The phone rings and I answer it.
Me: Tax Therapy, this is Amber.
Caller: Hi, yes, I was wondering if you could do my taxes?
Me: Well we are taking new clients.
Caller: When can I get an appointment?
Me: Before I do that I need to let you know that we do not do taxes while you wait. Our process is to send you some preliminary paperwork to complete, have an intake appointment where we review the paperwork and your documents with you as well as doing an ID check, and then you leave your stuff and we put it into our processing queue and call you when it’s ready for review and signature. Right now the turnaround is about three weeks [2/3 of our volume came in during a 2 week period in March that year] but if you get onboarded I will make every effort to ensure that you are filed on time.
Caller: Oh. I really wanted to get them done right away.
Me: In that case I recommend using one of the large franchises, especially if you can find one that is locally owned and operated. They are set up for while you wait return processing. I am not.
Caller: I didn’t want to do that. I don’t like them and they are expensive.
Me: I’m sorry but I really don’t have anything else to offer you. Most of the smaller shops I know are either not taking new clients or fully booked right now.
Conversations like these happen all the time in small tax practices all across the country. When I’m helping tax practitioners with practice management I often tell them that managing client expectations is important. Equally important is communicating boundaries to potential clients.
This post is for taxpayers who may be shopping for a #taxpro for the first time or looking to make a change this filing season. The time to shop is now. Actually the time to shop was last fall, but most #taxpros aren’t thoroughly in the thick of things right now and can still accept new clients without requiring an extension.
If you are looking for a #taxpro it’s important to understand some of the realities of running a tax business.
First, it’s a business. In most cases your fee is not simply profit to us but is paying for things like software, insurance, and continuing education. Not to mention office rent, phone/internet, and staff. We cannot discount our fees because of your circumstances or expectations.
Overhead is a thing. Ever gone through a fast food drive through, purchased two full meals and thought “Wow. For a little more money I could have had better food and supported a local business.” When you purchase from a large franchise you are paying for convenience, consistency (which, like fast food, can still be hit or miss), and their overhead (physical space, employee training, and advertising). Small shops often have lower overhead but that doesn’t mean they have no overhead.
Tax season is, by its nature, time limited. In other words, there is a fixed amount of time to see clients. Many #taxpros factor this into their pricing. They figure they can do X number of returns in a season and need to make $ to cover their overhead and make a profit (in other words, actually pay themselves for the work they’re doing). Big franchises have some higher paid employees but also make use of armies of lower paid, lower experienced employees to maximize their profits (higher return volume, done for lower cost). In some big “fancy” firms your return may be reviewed and signed by a highly paid, highly experienced professional, but they may only be giving it a cursory review. Again, this helps firms increase their profits (which should be the goal of any business). In smaller shops, it’s often a highly experienced #taxpro actually working on your return with the help of some lower paid support staff. And there are only so many hours a day that we can “brain.”
If you’ve ever heard the phrase “good, fast, or cheap; pick any two” that applies. If you want personalized service and someone to take the time to listen to your calls and explain things to you, that is often not going to be your cheapest option. You may be able to find that level of service for a reasonable price (something in line with what a franchise would charge or maybe even a bit less due to lower overhead) but those firms are not going to be willing to adapt their business model to your expectations. In other words, they cannot change from a drop off firm to a while you wait firm because that is what you want. They are a drop off firm because that is how they both do their best work and because its factored into their price structure.
If you want while you wait service, expect to pay for it. Same thing if you want a highly personalized experience or need a lot of advice or want your #taxpro to be available year round.
If you’re looking for a lower price you may need to find a #taxpro who doesn’t maintain a physical office (rent is a huge part of overhead). No office may not guarantee a lower price, but if you need a #taxpro with a physical office space do not expect bargain basement prices. You may need to accept a longer turnaround time because they don’t have staff to help them. And having staff doesn’t guarantee fast turnaround (especially if the firm is already backlogged). Doing a thorough and accurate job on a tax return takes time, no matter how simple you may think your situation is. You may also need to accept that your #taxpro is only available during tax season and that you may not be able to find them if a situation arises May-December. Or that if you do find them, they may not have the time or experience needed to help you.
Finally, this is why #taxpros get really prickly mid season (OK, sometimes earlier) about price shoppers. Especially #taxpros in solo firms. At the height of tax season time spent on the phone with price shoppers is time that could be spent doing billable work.
Early April 2019 – Monday Morning
Cat was not working Saturday so I turned off the phone so I could focus on finishing returns. I worked a full 8-10 hour day. I either took Sunday off or spent it doing office administration or housework instead of working on tax returns. I get to the office and check the voicemail which includes a few inquiries from potential clients.
Me: Hi, this is Amber from Tax Therapy, I’m returning your call from Friday night.
Caller: Oh. I already found someone. You weren’t fast enough.
Me: OK. Great. Good luck and thanks for calling.
I think the caller expected me to feel bad. I did not. Again, my tax practice (and those of many other solo practitioners) are not set up to do high intake volume late in the season. I am well aware of my physical and mental limitations. There is a fixed amount of “deep work” I can do in a given day/week/filing season. By the time this caller called I was 90% focused on moving returns out of the office and doing “extension triage,” 5% focused on ongoing resolution matters for clients, and 5% focused on process improvements for next filing season. In other words, by the time this caller decided to look for a #taxpro, the current filing season was already all over but some shouting in my office. I still might have been accepting new clients, but not one whose turnaround expectations were so high. I mean, if the caller couldn’t wait until the next business day for me to return the call, what’s the likelihood of them accepting an extension?
The Final Word in Confusion
The big tax franchises and the DIY software providers spend a lot of resources convincing people that “every person is a tax person” and that return preparation is a transaction. A widget for sale. And the more widgets they sell the more profit they earn. When you’re looking for a smaller shop, before you start calling about price take some time to decide which type of shop you are really looking for. Do you want a high-volume transaction type shop or a smaller, more relationship oriented shop? Are you just looking for fast turnaround on a basic return or do you want more personal service? After you’ve answered those questions, then you can look at what’s available in your area and start price shopping. And again, be aware that if you’re calling during peak season many relationship shops may not be able to meet your expected turnaround time, may charge a higher price if they can meet it, and may not be taking new clients at all.