Save the date: Resorting Your Client List for Better Margins 


Tax Practice News will be hosting our monthly “Tax Talk” on Nov. 16 at noon (EST) to discuss this topic in more depth and provide actionable steps for deploying these tactics in your practice.

Not registered yet? You can add this session to your calendar for free HERE.

Why is it important to reassess your client list each year and how does it especially help before tax season?

There are a lot of reasons to consider this process but the biggest one is the opportunity to reduce work and improve your bottom line at the same time. What happens over time with all our clients and all our practices is the dreaded scope creep. No one is immune to it. Scope creep happens sometimes without us even knowing.

It is as simple as the client asking a staff member for help with something and our team member thinking they’re doing something good, not knowing better than to have a scope conversation. We all have those clients who are the worst offenders too. You’ve told them a million times what is and isn’t in the engagement, but they continue to ask for out of scope services and then choose not to engage.

Client relationships can widely vary, and their personalities can too. Sometimes engagements start out as mutually beneficial and lucrative projects, but we later find them to be draining of energy and resources and not priced correctly.

All of these are great reasons to re-evaluate our whole client list at least annually. This also affords us the opportunity to have a constructive conversation about the firm’s service offerings to make sure we are offering what is needed by our clients and priced correctly for the firm’s continued success.

Sorting a client list is a strategic process that encompasses all this analysis. Similar to a pro con list, the process is structured and involves the analysis of both the clients and the service offerings to then give each client a rating.

Once clients are all rated it gives the firm the opportunity to have an honest discussion about whether or not the client is a good fit moving forward, whether or not their engagement just needs to be modified, or if they’re a star client and we need to send a thank you card.

Most practices skip this annual review because the thought of firing clients seems scary and overwhelming, or the natural attrition of clients makes us feel like everything sorts itself out over time. The problem with that mentality is that the firm leadership is never taking the time to gain a better understanding of truly which projects are the most profitable, not just the highest billing, and which clients the firm should try to replicate.

Sometimes our highest paying clients are sucking up the most resources and it can be difficult for us to see the hit to our bottom line when we’re not taking the time to look for it.

Our “November Tax Talk” will go over exactly how to rate your clients, what metrics you can use in your rating system and what to do after your client list is restored. This year-end review has the opportunity to create space for both more efficiency and more profit in your tax firm this filing season.

Like what you’re reading?

Subscribe to our FREE newsletter and we’ll deliver content like this directly to your inbox.