client service opportunities

who needs fall tax planning? clients … and you

avoid balance-due whining sessions and earn additional revenue.

by frank stitely
the relentless cpa

you’ve surely had this conversation a million times during multiple tax seasons, most often in april. you give a client a tax return with a $20,000 balance due.

client: i didn’t expect to owe that much.
you: how much did you expect to owe?
client: about $5,000.

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here’s where my conversations may differ from yours a bit.

me: what did you base that expectation on? you didn’t make any of the estimated tax payments from last year.

client: my income and deductions.

me: how did you put those together to come to your conclusion? i’m interested because that might tell me if i have a mistake on the return.

client: i don’t know …

me: we offer tax planning services that would have told you the likely result back in november. we could have prevented this result then.

we know that if we had given him a tax return with a $5,000 balance due, we would have had the exact same conversation, except that he would have been expecting a refund. someday, i’m hoping for an honest client answer along the lines of, “i consulted a ouija board, and it gave me a lower balance due.”

my response to the client whining about the balance due has three purposes:

  1. emphasize the point that whining about the balance due won’t change it.
  2. promote our tax planning services.
  3. get the idea across that if he has not engaged us in planning, i’m not listening to the whining.

why do these conversations matter and why should we seek to eliminate them? because they waste time during tax season when we don’t have time. a client sees his balance due and immediately picks up the phone and prevents you from being productive for an hour. what’s the final outcome? the same balance is due just after a wasted phone call.

tax planning cuts down on these unwanted interruptions by moving the unpleasant balance due conversation out of tax season and into the fall. who knows? maybe given a few months, you might even be able to get that tax balance due down. no more, “if only we had talked in november …”

tax planning gives you the ability to cut short the april balance-due complaining session with, “we offered tax planning services in the fall. maybe we could have gotten that balance due down.” instead of defending your tax return, you respond that the fault lies in insufficient client planning. he had the chance to reduce the balance due but didn’t take it. that’s a whole different conversation and a much shorter one.

does this work? yes – in three major ways. first, we have shifted the blame for tax balances due from us to clients. second, a significant portion of our clients pay us for tax planning. finally, the revenue earned outside tax season is nice.