As they near the April and October tax deadlines for individual returns, and even some of the business deadlines, CPAs are often besieged with requests for last-minute advice and tax preparation from self-filers and nonfilers who want to come into compliance. Complicating things is that sometimes these people are the CPA's family or friends and emotionally tug at the CPA's heartstrings for help. Some who ask for last-minute help take otherwise limited billable hours but often do not ultimately become (good) clients; others are grateful and become loyal clients.
CPAs can conserve billable hours while courting potential new clients during tax season, but these strategies require planning now. CPAs might:
- Resolve now to resist giving free advice. Often, such advice is general and off-the-cuff, without the potential client having provided all of the facts in writing. Free advice can always be given later, during slower seasons when the pros and cons of providing that advice can be weighed objectively and under less pressure.
- Consider firing a client, using an already prepared disengagement letter template, where experience has shown that the client, without sufficient compensation, repeatedly disrupts workflow through unmet deadlines and last-minute requests for help.
- Design a preset email and hard-copy letter template for inquiries that includes: (1) set rates (e.g., $A for the first 30 minutes or $X per year retainer) that must be substantially prepaid, and (2) an engagement letter like the one offered by the AICPA and available to Tax Section members and an intake questionnaire that must be substantially complete before work can begin.
- Set up e-pay options that clients can access and use to submit payments around the clock.
- Consider raising fees close to the filing deadline or for missing appointments or failing to submit requested documentation by agreed-upon dates.
- Consider carving out a few initially empty hours for last-minute, prepaid prospects and current client emergencies.
A template is key so that support staff can forward the information, preserving CPA billable hours where possible. Like hotel room rates, these rates can be lowered later, after less serious clients have gone elsewhere, unless company policy is to restrict negotiation of fees. Set clear expectations in the engagement letter as to when the work will likely get done. Perhaps an extension is filed now; all supporting documentation must be in by, e.g., June 1; and work will be completed by July 15. Similarly, this should be in a premade template. Explain the firm's tax review, preparation, and representation policies briefly and succinctly, linking to longer policies as necessary.
Another area of difficulty in determining the limits of a client engagement is when a taxpayer requests that the CPA review his or her self-prepared return. Policies on this differ among firms. One firm might not review self-prepared returns at all; another might review them in the off-season for possible amended returns; and a third firm may have the capacity to complete a thorough review before the deadline. Briefly explaining why a firm has adopted a specific policy might also build trust between the CPA and a potential client.
In all these ways and more, CPAs can help themselves to help their clients optimally by managing expectations and having set procedures that anticipate the nearly certain last-minute requests and unanticipated problems during filing season. Looking beyond filing deadlines and turning crises into opportunity can pay dividends in more — and more loyal — clients.
Editor's note: A version of this column was published in the January issue of The Tax Adviser as "Tax Practice & Procedures: Anticipate the Rush of Panicked Potential Clients."
Valrie Chambers, CPA, Ph.D., is an associate professor of accounting at Stetson University in DeLand, Fla. To comment on this article or to suggest an idea for another article, contact Paul Bonner, a JofA senior editor, at Paul.Bonner@aicpa-cima.com.