Quarter two is where tax firms should see their biggest revenue growth of the year. Instead, most firms let off the gas. You just survived tax season. You are ready to exhale. You have told yourself you earned a break. And while you are taking that break, May, June, and July become the months you miss the single biggest needle-moving opportunity in any practice.
I call this the dark season.
After 18 years in the tax industry, I spent 12 of those years making the same mistake every other firm owner makes. I treated Q2 like a recovery period instead of a growth period. I let extensions drift. I stopped marketing. I missed the exact window where advisory conversations should be happening because returns were still open.
The dark season cost me millions. It is costing you the same.
Advisory services are exploding but most firms are missing the window
According to Accounting Today, 80% of accounting firms are seeing increasing client demand for financial planning, business strategy, and technology consulting services, while 79% of accountants expect strategic advisory work to grow by an average of 38% over the next year.
The financial accounting advisory services market is projected to reach $130.81 billion by 2035, exhibiting a compound annual growth rate of 5.22%. But here is what these statistics miss: timing matters. Most firms try to deliver this advisory work when their capacity is already constrained.
The extension habit that is limiting your growth
Most extensions are not filed because clients are not ready. They are filed because we are tired.
Think about March 15 to April 15. You are running on fumes. A client calls about a missing K-1. What do you do? You file an extension.
I did this for years. I would file automatic extensions and send notification emails. The form they needed was sitting in their inbox. They had paid their estimates. There was no urgency.
Here is the real cost: When you file that extension, you are moving revenue from April to September. And you are doing it to 20% to 30% of your book. Probably 80% of the ideal clients who should be paying more for advisory.
You cannot offer advisory on an unfiled return
Advisory conversations die the minute the client remembers the return is still open.
I have watched firm owners try this the wrong way. They go to a client in June who is on extension and try to open the advisory conversation. The client says one of three things:
“Aren’t you already doing that for me?” “Can we go back and do that for last year?” “Let’s finish the return first, and then we can talk about it.”
All three block the conversation. You cannot offer what comes next until you have delivered on what came before.
Every client on extension is a client you cannot move to a deeper relationship. They are sitting in a holding pattern where you cannot ask for more revenue or enroll them in advisory services. The extension is not just a delayed return. It is a locked door.
Client expectations are outpacing automation
While firms invest heavily in artificial intelligence and automation (64% plan to invest in AI this year, up from 57% last year), client expectations are evolving faster than our technology can deliver. Millennials want the “Uber experience”: easy and frictionless with everything at the push of a button.
Clients expect accountants to act as high-level advisors who can contribute to strategic decisions. The window for these conversations is not when you are drowning in extensions.
Pull revenue forward. On purpose.
The firms growing the fastest do not wait for revenue to arrive. They go get it.
Stop thinking about Q2 as a recovery quarter. Start thinking about it as a collection quarter. Take your extension list and set a target to bring 50% of those clients in during May, June, and July.
You reach out. You call. You tell them you are finishing their return in the next 30 days. You stop letting them drift and start running a schedule.
The second those returns are done, you open the advisory conversation. The loop is closed. The door is unlocked. And you do it while there is still time left in the year to implement.
Change the incentives
If you ask your team to pull revenue forward without changing how they get paid, they will not do it.
Most accounting firms pay a bonus at the end of the year for doing the job. That is not incentive. That is a participation trophy.
When I built the advisory side of my firm, I stopped rewarding production and started rewarding performance. Production is how many returns they touched. Performance is whether we hit the target for the quarter.
Q2 is not a break
The growth is not out there. It is not in new marketing or new software or more clients.
It is in the extensions you are already filing. In the advisory conversations you are not having because returns are still open. In the revenue sitting in Q3 and Q4 that should have hit in May.
Q2 is the quarter your firm was built to grow in. Every year you treat it as a recovery period is a year you gave away the growth on purpose.
The dark season does not have to define your year. But only if you are willing to work when everyone else is resting.
ABOUT THE AUTHOR:
David A. Perez is an enrolled agent with 18 years in the tax industry. He is the founder and CEO of Tax Maverick, a platform that has trained over 1,200 tax professionals in advisory services and advanced tax strategy. He is the bestselling author of Building Your Own Economy and has been featured on CNBC, Forbes, ABC, CBS, and the Schwab Network.
Photo credit: John Kevin/iStock
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