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Advisory Services

Don’t get fooled: How to use “quick questions” during tax season

Mucki Sobania  Solutions Consultant Lead, Tax & Accounting Professionals, Thomson Reuters

· 7 minute read

Mucki Sobania  Solutions Consultant Lead, Tax & Accounting Professionals, Thomson Reuters

· 7 minute read

It’s probably happened to you before. A client comes in to drop off all their tax prep information and stops to ask you a “quick question.” It’s a question that is easy for you to answer, but one that has nothing to do with the work you do for the client.

You probably answered it without even giving it a second thought. But, what just happened was that you gave away your knowledge and expertise for free—expertise that you can and should be paid for when clients ask for advice that falls outside the scope of work you have been hired to do.

On this April Fools’ Day, don’t get tricked into giving away your expertise. Instead, when a client asks a question that is beyond the scope of the agreement, use it as an opportunity to put advisory services at the center of your client relationships.

How often do you give information away for free?

Among professional tax advisors, a growing, but still surprisingly small, percentage of practitioners are beginning to consider ways to better value their CPA advisory services as a billable product. The larger percentage, however, find themselves stuck for a solution to giving their expertise away for free.

There is a difference between offering free advice and offering advisory services. Everyone loves free stuff, but a lot of firms may be wondering how they can be compensated for their advisory services. Many tax professionals say they feel like they are often providing these services by answering questions, but often not getting paid for sharing their knowledge.

Defining advisory services for clients can be challenging for a lot of firms. It may seem easier to just answer clients’ questions because you don’t want to lose a client by asking to be compensated for advisory services at the last minute. How can your firm be prepared to offer these services in a professional manner? You may be in the habit of just answering any questions clients bring to you without positioning the firm’s advisory services. However, there are ways to offer advisory services as a value-added service and not lose your client’s loyalty.

The rise of the value of CPA advisory services

There’s a growing number of firms embracing niche or specialized accounting by learning not to give advisory services away for free but instead, seize new opportunities. Without setting up advisory services with your clients at the beginning of the relationship, you might find yourself answering many so-called “quick questions.”

Have you considered how much time and expertise you would spend if you did this for every client?

Opportunities are often missed to have client conversations about the availability of your firm’s advisory services offering where they can get expert advice consistently. This is something that’s within the scope of any accounting and tax firm’s repertoire, but how is it defined? When a client comes to you, they might purchase a tax return, but you have no idea if they need any other advice, making that window of opportunity wide open.

It’s important to be proactive and consider what other advisory services you might offer at the beginning of the firm’s relationship with the client, or even with an established client. Tax clients may wonder, but don’t know how to ask for help with many of the issues they face. If advisory services are available, you have to pre-determine how to approach offering forward-thinking services to clients. Firms that keep advisory at the center of their relationships are better positioned to ensure their clients are getting the services they need. You shouldn’t be selling your expertise for the price of a tax return.

Four ways to make your CPA advisory services available

Indeed, some accounting firms are already doing advisory work; the question is, are they being compensated for it? There’s a difference between being an advisor to a client and centering your relationship on advisory services. Here are four ways to broach the subject of advisory services and gain more business:

  1. Take time to understand internally the scope of these value-added services
  2. Consider your clients’ needs beyond tax returns
  3. Have your advisory services offerings defined and priced to offer new clients
  4. Send a communication to existing and prospective clients promoting these advisory services

Molding your client’s perspective is the key to the value of CPA advisory services

By defining the scope of your services, you’ll be able to lead the client relationship and set proper expectations. Being clear about what is in scope, and what is not in scope will help you identify other opportunities that may exist to help your client. This conversation opens up a dialogue where the dynamic has changed from you feeling obligated to answer casual questions, to a more formal transaction that helps your client and your firm. Taking a more structured approach toward your advisory services ensures the best experience for both the client and your firm.

A big part of advisory services is listening differently. Tax professionals can miss opportunities to be able to offer advisory services. Historically, tax return preparation has been very transactional. However, the tax return should be the byproduct of a good advisory relationship. This helps you avoid rear-view mirror advice and allows you to be more proactive.

When you listen to your clients, you can change your approach. You know your client needs help, especially in today’s complex tax environment. There’s so much opportunity for firms to do something different, but it’s easy to get stuck in not being prepared with a formula for how to bill for these services. These are options that must be considered by your firm with some forethought.

If a client comes to you with a question that you are able to answer and possibly solve a problem that saves them maybe $20,000 of value, for example, what do you charge for that? If it takes five minutes to figure that question out, are you going to charge for five minutes or will you look at this from a value perspective and an opportunity? Don’t water down your firm’s body of work or your experience. That knowledge is valuable to clients, and your firm can tap into those valuable resources to utilize the potential growth opportunities that come with the value of CPA advisory services.

Respond to questions with the right context

A true tax advisor needs to respond to client questions with contextual understanding to provide them with that deeper level of advisory services. Accounting firms may lump themselves into this pool of knowledge that is termed “advisory.” If everyone’s an advisor, what does that mean? If your firm is going to offer advisory services, you need to be deliberate and define how you are advising them.

Consider what you are trying to get out of these client relationships. How are you using these relationships to continue to move forward through the changes of what’s being asked of you and your firm? If you’re going to say you’re an advisor, which all tax advisors can be, then show it through how you are engaging your clients successfully.

Expand your practice into CPA advisory services

There is no need to continue giving away free advice. If you want to learn more about launching advisory services at your firm, speak to a Thomson Reuters representative to get started.

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