clients who want to meet should be more than willing to pay for that meeting.
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 was 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.
more: get clients to understand firm processes … or say goodbye | train now before it costs you down the road | keep clients from “balance due” shock | it’s ok to say no to clients (even the large ones) | you train your clients, whether you mean to or not | business owners face one of three exits | how small firms can win the talent wars | do you know your turnaround time?
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we should fear the events that destroy our priorities and drain hours from productive work. meetings and phone calls and emails, oh my! from a practice management standpoint, let’s look at why these communication methods are so destructive.
the numerator in our lean six sigma equation that calculates turnaround time is wip (work in progress). wip is time invested in projects times billing rate.
quite simply, meetings, phone calls and emails add time to wip, increasing wip and turnaround time. is that necessarily bad? yes, if the time is wasted.
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? it’s 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 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.
a few years ago (pre-covid-19), i wrote an article called “the annual tax meeting is dead. clients killed it.” 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 truly valuable, move them out of tax season and bill for them. then, he would find out how valuable the meetings are to clients. clients will pay for them if they are valuable, which is a big win in extra revenue for the off-season. if the meetings aren’t valuable in clients’ eyes, 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 activities must deliver value to the client or be eliminated.
you cannot eliminate all meetings, but you can 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 your firm has six preparers, you are wasting six figures. worse, other work gets delayed, and your turnaround time increases.
the clients who insist on meetings should compensate you for that time. will they? of course not. these are primarily high-maintenance clients to start with. once you start tracking costs to projects, you’ll be a lot less accountable 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.