Build your advisory book


If you’re feeling burnt out on tax prep post deadlines, now is a good time to think constructively about how you can re-define your practice before the busy season. I think the single biggest set back I see firms make in terms of not just creating burnout, but holding their business back is not thinking outside the box to redefine service offerings.

Clients need more than just a tax preparer to enter data into a return. Capitalizing on that need is a great way to provide more support for your clients and bolster firm revenue at the same time.

The benefits of building advisory services is that they’re far less seasonal than tax preparation. This not only creates an opportunity for work to be generated outside of tax season, which means you can have more stability in your staffing, but it also creates an opportunity for more annualized and less seasonal revenue.

Tax practices can easily transition into any of the following advisory services:

  • Entity selection and formation advising—always defer to an attorney for finalizing formation documents.
  • HR services such as benefits selection, retirement plan development, officer compensation, etc.—always defer to the experts on this as well when it comes time to actually administer plans, but these items all significantly impact your clients tax position, you should be the first line discussion point.
  • Income structure – think about how many S Corp owners could do a more efficient job splitting their income between payroll and distributions, or partners in a partnership who may not understand guaranteed payments.
  • Financing advisory on loans, opportunity zones and equity versus debt decisions.
  • Retirement advisory spans from SEP contributions to 401(k) strategies to IRAs and beyond, and don’t forget planning for generational wealth.
  • Real estate advisory could cover everything from investment property return projections, 1031 exchanges, deprecation, and opportunity zone analysis.

This certainly isn’t a complete list but highlights some of the easy ways a tax practice can start to incorporate other services. We already know all the ways that these items impact our clients’ tax returns.

What’s more, you also have intimate knowledge of your clients’ financial positions, whether that be the performance of their small business or what their individual investment portfolio looks like. You know if they are taking advantage of Roth rollover contributions, and you know if they are contributing to a 529 plan for their children’s education.

Because of the knowledge base that tax preparers already have when it comes to the intimate details of client financial status, it’s an easy conversation to transition to when discussing tax returns with your existing client base. Selling advisory services is as simple as asking “have you ever thought about…” and explaining why you think they may benefit from considering your option. From there, have your advisory services ready to present. You’ve already presented the value.

Advisory services should be built in such a way that they are billed throughout the year. I strongly recommended tiers of service offerings with flat fees as opposed to hourly but if that’s too much of a transition for your firm, build a schedule with your clients.

Tell them up front that advisory services will require quarterly or monthly meetings, whatever is the best fit for their needs. Not only will this addition to your practice enhance your client satisfaction and your bottom line, it will also make your preparation process easier because there won’t be any surprises when it’s time to file the returns. Just think. No missing a 1099 right as you’re about to be ready to review a tax return to be finalized.

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