tax season client meetings: kill them now

let’s try to spike phone calls and emails while we’re at it.

by frank stitely
the relentless cpa

what did dorothy and her friends fear in the wizard of oz? “lions and tigers and bears, oh my!” dorothy feared the wrong things if she’s a partner in a cpa firm. we don’t see much wildlife in our offices during tax season unless you count fast food delivery people and the occasional crazy client.

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we should really fear the events that destroy our priorities and drain hours from productive work. meetings and phone calls and emails, oh my! let’s look at why these communication methods are so destructive from a practice management standpoint.

the numerator in our lean six sigma equation that calculates turnaround time is wip. wip is time invested in projects times billing rate.

quite simply, meetings, phone calls and e-mails add time to wip, increasing wip and increasing turnaround time. is that necessarily bad? yes, if the time is wasted.

meetings

how many tax season meetings go as follows?

client: “here is one of my w-2 forms. i don’t think it’s right. i can’t figure out how they got box 1. that’s not my salary.”

you (with bored indifference): “there are additions and deductions from your salary that affect taxable income such as your 401(k) contribution.”

client: “here’s an interest form. i wonder what interest rate i’m getting on this. that doesn’t seem like much interest on $100.”

you (with even more indifference): “let’s just get all your forms and then we can talk about them.” (you say this hoping the client will forget about all of this by the time you are done.)

client: “here’s my mortgage interest. do you think my interest rate is too high?”

you: “no.”

client: “here’s my bag of business receipts. let’s go over each one …”

i got a headache just writing this. how much value did anyone get from this meeting? pretty close to nothing. the client wasted time driving to your office only to waste your time handing over one document after another. after one hour invested, this tax return is still at square one.

if this meeting took an hour, you just added one hour to wip accomplishing nothing. it’s like a baseball pitcher throwing two balls to a batter on the first two pitches. you are financially behind on this tax return project from the very start. not only did you suffer through the waste of a needless hour on this project increasing its wip, but you didn’t get to spend time on something more productive, like picking at navel lint.

i wrote an article called “the end to tax season meetings.” one reader commented that his clients found the meetings very valuable. he made recommendations to clients about their tax situations.

i responded that if these meetings were really valuable, move them out of tax season and bill for them. then he would find out how valuable the meetings are to clients. if they are valuable, clients will pay for them, which is a big win in extra revenue for the off season. if the meetings aren’t valuable in the eyes of clients, he would find out that the meetings are for him to bask in his knowledge, not for clients, and a waste of time.

one of the basic lean six sigma tenets is that all activities must deliver value to the client or be eliminated.

you are not going to be able to eliminate all meetings. i meet with most, but not all, new clients. i suspect that will change in the future as well. eliminate the pointless meetings to gather tax documents.

what about the clients who insist on meetings to deliver tax documents? think about that $200 the meeting is costing you in billings. if you have 100 pointless meetings and your rate is $200 per hour, you twiddle away $20,000 in real american money. if you have six preparers in your firm, you are wasting six figures. worse, other work gets delayed and your turnaround time decreases.

the clients who insist on meetings should compensate you for that time. will they? of course not. these are mostly high-maintenance clients to start with. once you start tracking costs to projects, you’ll be a lot less accommodating to them. you’ll see the dollars going out the door.

i suggest billing extra for tax season meetings. have i done that yet? no. i have largely eliminated the meetings. i am happy to replace the clients who want meetings with clients who despise needless meetings. they are more affluent and younger.

my experience is that clients who want meetings are also lower-dollar clients who are resistant to fee increases. i love trading low-dollar clients for high-dollar clients. that’s how tax seasons are won.

phone calls

the math on phone calls works the same way as with meetings. the fewer, the better. phone calls also have some disadvantages compared to meetings.

first and foremost, clients hate bills for phone calls. they’ll agree that a half-hour meeting should be billable, but a half-hour phone call is just a “quick question.” that alone should make you hate phone calls.

second, phone calls are usually unscheduled. all 7.5 billion people on planet earth can pick up the phone and interrupt your day at any time for any reason. a 15-minute unscheduled phone call really costs you about 30 minutes when you consider the loss of productivity switching tasks mentally. that one call costs you 1/16 of your eight-hour day. four phone calls and a quarter of your day is gone. how many phone calls are worth that much in dead time?

you can solve the unscheduled aspect of phone calls by requiring them to be scheduled. i started doing this. our admin staff can bunch them into selected time slots. this solves three problems. first, it removes the unscheduled interruptions. second, i can prepare in advance for the calls. finally, phone tag is eliminated.

because of those vermin calling you about extending your car’s warranty, no one answers the phone anymore. you have to leave a message. then they leave a message for you. you leave a message for them. you get it. this is an equation without a solution. you can easily lose 30 minutes playing tag for just one call. i returned from travel a few days ago and had six phone messages to return. i reached just one person.

finally, exchanging information during phone calls is difficult. how many times have you tried directing a client to a page in a pdf copy of a tax return? that takes about five minutes alone. video calls with screen sharing are better. you can review tax returns on screen. but try getting your 70-year-old clients to do that. that’s one more fine reason to freshen your client base with younger clients and schedule phone calls.

you can discourage phone calls with your phone system auto attendant. i love calling people whose auto-attendant message drones on for two weeks. you know how these go.

“please listen carefully as our options have changed. our address is… our telephone number is… our fax number is…. our office hours are… our cat’s name is…”

the options haven’t changed in 10 years, and the cat has used up eight of nine lives by now.

“… please press 4,280 to reach joe schmo. please press zero to reach a disinterested human, who probably doesn’t speak english.”

you press zero and get disconnected. this is a fine way to discourage calls.

our admin staff answers phone calls live. they don’t sit behind an auto attendant. you might fairly ask “why“ after the above diatribe against phone calls. when prospective clients call, we are usually the first live voice they reach. they have left messages with three other firms. when fresh meat is on the line, someone in our firm can find time to speak with them.

emails

i know i have provided you with exactly zero solutions to the problems caused by meetings and phone calls. i will frustrate you a bit longer, while we discuss that cancer called email.

here’s my absolute favorite interchange during tax season.

a client sends 20 messages spread out over a week, each with one tax document attached as a bitmap. what’s the 21^st message they send?

“did you get everything?”

how in the hell would i know that? a week later, i send a questions list and receive the following in response.

“did you check the email messages i sent you for this? maybe you missed one?”

how many hours get devoured by this nonsense during tax season? if you are in a firm of 10 people, i’ll bet 200+ hours disappear with this.

at one point the ceo of slack predicted the end of business email in five years. i think he’s wrong. business email is done in two years. the reason, quite simply, is malware.

while email is every bit the time suck meetings and phone calls are, the real danger is malware, specifically ransomware.

with the viruses of yesteryear, the objective was digital vandalism. bad guys wanted to destroy your data for fun. with ransomware, the bad guys hold your data hostage for money. there’s a profit motive and business model that makes investing some effort worthwhile for the bad guys.

here is a real-life example of a situation that happened to me last tax season.

i got an email from a prospective client asking to work with us. because this was not an obvious referral, i scheduled a phone call to discuss working with them. we had the phone call, and i gave them a list of documents to send – prior year income tax returns. you know the drill.

a couple of days later i got an email with what looked, by the file name, to be payroll tax information. because i had not asked for this, i smelled a rat. the file was an exe file, an almost certain sign of malware although some clients manage to send something like this when they try to compress files.

first, i didn’t know these people or where they came from. second, they sent me something suspicious. third, i couldn’t find the firm on google. three strikes and you’re out. i sent the file to our outsourced it firm for analysis.

our it firm analyzed the file and determined it was ransomware. the exe file downloaded a ransomware program. we were a mouse click away from disaster.

well, not actually for us. we use virtual workstations and none of our users have admin rights (even me). so the malware couldn’t have installed anyway. but you get the idea. we saw this same scam happen at least three times.

what’s scary about this, as opposed to ordinary viruses, is that the bad guys set up a boiler room and incurred costs. that means there’s a calculable return on investment for the bad guys. they’re willing to invest money in infrastructure. no more nigerian general.

during tax season, we received a dozen infected messages per day that got through our first line of spam defense. that’s scary. that’s over 1,000 bad messages during tax season. our staff must resist the urge to click on something bad 1,000+ times.

the first defense to this is training. we have done a few lunch and learn malware seminars presented by our outsourced it firm. the second defense is eliminating email as a way to receive files.

the solution

hopefully, i have convinced you to fear meetings and phone calls and emails, oh my! now for the solution.

you need practice management software that helps eliminate or greatly reduce meetings and phone calls and emails, oh my! here’s the functionality you need.

first, practice management software must include a portal. you can be certain who is sending you files when your clients have to log in to post files.

you can avoid tax season meetings if clients have a place to post their tax return documents. in our firm, more than 70 percent of our clients posted their tax documents to our practice management software.

your admin staff can deliver tax returns electronically. producing electronic tax returns is far faster than printing and collating paper copies. also, your admin staff won’t be tied up with clients walking in to pick up tax returns. you won’t be tied up when clients “just want to pop in and say hi.”

second, your software must automate as many routine communications as possible. for instance, picking up the phone to remind clients to send requested information is just silly in the 21^st century. so is sending individual reminder emails. both of these activities add needless cost to wip and thus drive down turnaround time. a standalone portal won’t do the job.

finally, you need software that allows clients to post notes for you. this eliminates the need for email. no more racking your brain to find keywords to search your outlook data for a message sent a month ago. a good system organizes messages for you.

if your practice management software helps you manage tax return and other projects, that’s an important bonus. if it includes review notes for preparers, checklists and staff collaboration tools, you have a winner. this is how tax seasons are won.

how will you ever get your clients to use such software? do they use amazon? do they use facebook? do they use e-banking? don’t worry, your clients are ahead of you. we started using our software a decade ago. more than 90 percent of our clients used it the first year.

i don’t want clients who tell me, “i’m not good with computers. i like telephone calls.” you can have them and the needless increase in wip they cause. you can’t argue with the math on wip and turnaround time.

send out a few unapologetic e-blasts to your clients explaining the change and why the change is necessary. your attitude in the e-blasts is critical. most of your clients will be thinking, “it’s about time.” replace the gripers with younger, more affluent clients.

hopefully, you are drinking the kool-aid on reducing meetings and phone calls and emails, oh my! i’ll end this post with quite possibly the stupidest practice management maneuver i have ever done. this is saying something as i have pulled some world-class stupid stunts.

until a few years ago, we prescheduled tax season meetings. our theory was that we needed to preschedule, because we had too many clients to just let clients call in to schedule tax meetings. there were a few weaknesses in this theory:

1. we don’t want the meetings.
2. clients don’t want the meetings.
3. clients tie up admin staff rescheduling prescheduled meetings.
4. the meetings are largely useless.

i have already explained 1 and 4. i got a full understanding of 2 when meeting with the vice president of a software company. he had been a great personal tax client for about a decade. he drove every year from alexandria, va., to our office in chantilly, va. that’s about 25 miles as the crow flies, but unless you grow wings, you have to use the capital beltway. this trip can last anywhere from 40 minutes to – well, noah spent less time in the ark.

during one of our meetings about five years ago, he said, “frank, with this portal thing you have, do i really have to come out here to meet? i could just post all of my documents there.”

this hit me squarely between the eyes. he came to the meetings because we told him to come to the meetings. he didn’t want a meeting. i didn’t want a meeting. why were we having a meeting?

he thought the meeting was part of our workflow process, and as a smart guy, didn’t want to mess with our process.

we had been using our clarity practice management software for five years already, and a lot of clients figured out that they could avoid viewing my ugly face by posting files there. but we had never explicitly told our clients they could just post their tax documents and skip the meetings. we had people posting the files and then coming in for meetings. why? again, we told them to come in.

does it get any more stupid than this?

the first year we stopped prescheduling meetings, we feared that clients would all call to schedule meetings the third week in march. we thought admin would be swamped with calls.

never happened.

our phone volume went way down. with prescheduled meetings, people clogged our phones and tied up our admin staff rescheduling meetings.

of course, this could all be specific to our firm. maybe people really don’t want to gaze lovingly into my eyes basking in my obvious genius. but i doubt that. this happened with all of our staff. people don’t want meetings any more than we do. they come to meetings because we tell them to.

i don’t miss the meetings. well, in some cases i do. we all have favorite clients we like to see. how about just having lunch with them after tax season? they’ll usually buy. that’s why they’re my favorites.

 

posted on march 26, 2021