Making the Leap from Tax Compliance to Advisory Services

By Tawny James, CPA, Cassidy Jakovickas, CPA, and Ben Sargent, CPA.

If you were a carpenter helping your client build a fixture, would you have them assemble everything and only jump in at the end to fix their mistakes? Or would you walk them through the process, step-by-step, and act as a guide to make sure they were doing it properly?

The choice may seem obvious here, but that’s not always the case when the same question arises for tax professionals. Even though year-round advisory services position clients for success and help them remain tax compliant, many firms find it difficult to shift away from high-volume compliance work, instead sprinting through the marathon that is tax season every year.

As firm owners ourselves, we understand the struggles that come with making the leap to holistic services. From internal bandwidth to handling clients who may be averse to change, these tips will help you create more capacity and lean into the services that customers really want: advice, tax planning, tax strategy, and business advisory services.

Flexible Work Hours

As any firm owner will tell you, staffing in the tax industry has been an ongoing challenge over the past several years — and especially in the last two. For this reason, any successful evolution in your business starts with retention, and empowering staff to be as efficient and productive as possible.

At our firms, we put an emphasis on flexible work management and employee trust. All of our employees are either remote or hybrid and many work the hours that best suit their productivity levels, whether that’s 9 a.m. or 9 p.m. With cloud-based tools, our teams can collaborate and work together asynchronously and securely from anywhere in the world.

What we’ve found is that people who work in the ways that best suit them, rather than being forced into a rigid office schedule, can better tackle their daily tasks and maintain the energy and commitment to take on more complex challenges. In this case, that means helping to build and grow your advisory program.

Year-Round Client Engagement

With an empowered staff, you can begin to transform your firm from tax technicians to business strategists.

As tax professionals, we love the technical details of tax compliance. We love solving problems to get everything exactly right for our clients. Advisory services take this attention to detail and apply it to the role of strategist.

Becoming a strategist starts with listening carefully to your clients during the season, taking note of planning areas to focus on, then planting the seed for your advisory services. From there, come May and into the summer, you can schedule what we call your “put it into motion meeting,” which will lead to weekly, monthly, or quarterly check-ins rather than a few sessions during tax season.

If you have older clients who are not yet on the cloud, you can help migrate them into intuitive financial reporting systems like QuickBooks Online Accountant and explore bookkeeping services. This will give you a detailed picture so you can best advise each client for their individual situation.

The goal of advisory services is to create holistic relationships that position clients for financial success, which takes multiple complex conversations and does not happen overnight. Building these relationships during tax season will ultimately shift you away from the seasonal model and toward a balanced, 12-month practice.

Scalable and Repeatable Steps on the Cloud

Once you’ve established your staffing model and introduced your expanded services, the next step is to make your advisory services scalable and repeatable.

Whether you’re advising a new business owner on the differences between an LLC or an S Corporation or running an analysis for a client on their stock options, creating repeatable resources across accounts will help educate your clients and save you time and energy. For your firm, this may look like a landing page with downloadable resources and documents, an FAQ blog about a specific topic on your website, or even an educational article that translates tax strategies for those without a financial background.

While tax advisory strategies are not one-size-fits-all, cloud software like ProSeries Tax and Lacerte create an easily accessible portal that lets clients use these educational resources at scale. In addition, it lets your team track the status and progress of each client journey so you can more accurately determine their needs.

Conclusion

Times are changing and what clients want is changing, too. While some may stick to seasonal tax returns, it’s up to you to identify which are ready to grow with your firm as you build out your services.

As you lean into your advisory story, don’t be afraid to take a critical look at your client list and ensure the relationship is mutually beneficial in the long run.

Tax compliance may seem far from advisory services, but it’s an amazing place to start. Your clients know, like, and trust you, and most want more from you. This starts with increasing your capacity so you have time to take on this work.

======

Tawny James is an owner of Smith & James, a northern California firm serving business owners, executives, and independent professionals. Cassidy Jakovickas is the president and CEO of MBS Accountancy, an advisory accounting firm based in California. Ben Sargent owns Sargent CPAs, a specialty accounting firm focused on Internet professionals in New York.