The 2013 PCPS CPA Firm Top Issues Survey
found that keeping up with changes and complexity of tax laws was a top concern for small firms like my own. To overcome this challenge and give us an edge, we rely heavily on professional publications to keep us up to speed and to gain a wealth of great ideas for client planning. These publications are our ultimate think tank. For example, one of my clients was involved in a $7 million stock sale to a family member. It was going to be a tax disaster for the buyer, but I had recently read in The Tax Adviser that an advantageous provision for C corporations would also apply to S corporations. After researching the issue and finding woefully limited guidance, I actually contacted the author of that article, who offered assistance and his opinion as to why the provision should apply to our circumstances. That effort saved the buyer, over a 15-year amortization period, $2.8 million! It makes it well worth the effort, even in a small firm, to keep up with your reading and pass on what you learn to clients.
In addition to staying up to date on new laws and regulations, it’s also important to keep clients in the loop to promote your value and lead to further services. How can a small firm keep clients current on new developments? We’ve simply made it a part of our eight-person firm’s culture as we use the following client communications:
- Push emails that feature quick sounds bites on newsworthy or relevant tax or financial concerns. We send these out every couple of weeks or more frequently if warranted. They are a joint effort across the firm, with everyone generating ideas and circulating them for consideration.
- Transmittal letters with completed tax returns that provide customized advice for each client. As part of our procedures, we try very hard to provide valuable feedback to each client based on their return. These letters might alert clients to common issues, such as their eligibility for a Roth IRA, or they might focus on more complicated concerns we identified in their returns, such as deferred compensation opportunities. We add value to tax preparation by providing these insights.
- Mailings tailored for client segments. We have done selective but broad-based mailings on the health insurance credit and notification requirements for the health care act. A few years ago, we sent a mailing clarifying the often misinterpreted provisions for S corporation clients regarding capital vs. loans. In addition, we have a specialty in privately owned, regulated utilities, so we mailed information on the domestic production deduction for manufacturing, illustrating its application and availability for our water utility clients.
The good news is that there are many tools that can make it easier for firms to prepare these communications.
- Client-facing components of AICPA and PCPS toolkits. We have found the AICPA Tax Practitioners Toolkit, the PCPS Health Care Reform Toolkit and the PCPS Clarified Auditing Standards Toolkit particularly useful. We also rely on the TIC Alert and comment letters prepared by thePCPS Technical Issues Committee for background information.
- Tax software. Our tax software includes an analysis function that offers tips for clients based on their specific return.
- In-house resources. We prepare in advance draft paragraphs on common issues, such as Roth IRA eligibility and drop these paragraphs into our transmittal letters. In addition, we’ve created our own checklists that we use as we go through returns that help us identify areas of interest for that client.
- Task management software. Our task management software includes a function that allows us to schedule a task on our calendars. That’s a great tool during busy season, when we often don’t have time to immediately follow up on the opportunities we see, so we make a note in the software to follow up in the summer months.
Missed opportunities for good client communications are missed opportunities not only for client service but also to add value. Our firm has a great deal of expertise and when clients see that proficiency, they are willing to pay a premium fee. Get started now, because your client communications reinforce your concern about their needs and they will enthusiastically recommend you to their friends.
Peggy Ullmann, CPA,CGMA, is owner of Ullmann & Company, CPA’s, a small firm in Phoenix, Arizona.