More Commentary About Year-Round Proactive Services to Clients

If you want to be respected, be a respectable person.

(A quote from my mother)

People treat us the way we teach them to treat us.

(Wayne Dyer)

On Friday I offered my own anecdotal experiences regarding giving clients the proactive advice they all say they want.

The problems I have encountered with this are 1) getting paid and 2) having people actually take my advice.

Certainly this doesn’t describe all clients. It actually describes only a minority of clients.

But it happens enough to be noticeable. And I’ve heard other accountants and tax professionals lament about the same problems.

The root cause of these problems lies with accountants and tax preparers. Many of us fail miserably at the first two quotes of wisdom above.

We as a community have allowed ourselves to become a commodity.

Most of us don’t tout our skills or our knowledge or our training. We don’t talk about the positives we bring to the table. We allow ourselves to be used and abused by clients — oftentimes unpaid or underpaid — and then complain that clients just don’t listen or just don’t value what we do. (I plead guilty to that last one a thousand times over.)

Instead, we advertise ourselves by using the generic “we can get you more deductions” or we simply say we “provide bookkeeping, accounting and tax preparation services.”

And when we talk to clients about what we’ve done for them, we always talk about rote tasks completed or hours spent.

Rarely do we talk about the value of the things we do.

Those of us who are good professionals rarely demand the respect we have earned. And then we wonder why clients seemingly don’t respect us, don’t value us, don’t listen to our advice, or jump ship the moment you breathe about a rate increase.

You reap what you sow.

And what irritates me the most about this is: I’m guilty of doing all these things. I can identify the problem and sometimes the solutions, but I have a hard time actually fixing the problem for myself.

This should be filed under Solo Practitioner Blues. (Hey … that sounds like a good title for an ongoing blog series. Hmm.)

And maybe I’m just projecting my own insecurities onto the entire industry.

So I ask — and this is open to clients and accountants alike — is my analysis sound, or am I way off-base here?

Bridging the Gap Between What Clients Want … And What They’ll Pay For

I’ve been following a discussion on LinkedIn regarding whether it’s better for an accountant to work with a business client once a emoticons-150528year at tax time, or throughout the year.

I have thoughts on this, and as I often do, I am using my blog as a soapbox to rant and rave a little.

What Clients Want

No two clients fit into the same box. Some of my business clients make six-figure income from their business but they only need to see me at tax time because their accounting needs are simple. Other business clients are side businesses or very small to where there’s not much to discuss or do during the year.

For many other business clients, their needs are such that a year-round relationship is best.

And we know that clients want a proactive approach, with year-round business advising and more out of their accountant than just punching numbers into a computer and spitting out financial statements and tax returns.

Two Observations

Everyone, from business owners to individuals who just need their personal tax return prepared at tax time, “wants” their accountant or tax preparer to be “proactive.” In my anecdotal experience, I can make two observations and one over-arching point about this.

OBSERVATION 1: Sure, people “want” a proactive approach. But it seems to me like few are actually willing to PAY for the service.

OBSERVATION 2: Sure, people “want” a proactive approach. But so many times it seems like I’m beating my head against the wall, giving advice that is not actually taken or acted on.

Time and again, I will give the advice people say they want. And then they go off and do the opposite of what I advised them to do.

I just recently had to fire a business client, in part, for this very reason. Wanting my advice (the client did pay for it, at least!) but then never acting on that advice. All the while, the owner would complain that no one was helping solve the problems he was having with his business.

There were other issues with that particular client. But when the time came for me to make a decision about our relationship, the client had dug a deep hole because I had given detailed advice multiple times that was never acted on.

OVER-ARCHING POINT: First of all, this doesn’t really apply to ALL clients. It doesn’t even apply to “most” or a “majority” of clients. But it happens often enough that I notice it and feel compelled to go all “dear diary” here on my blog.

And it might seem like I’m blaming or lashing out at clients in this blog post. But I’m not.

The fault mostly lies with accountants. We have sowed our own seeds here.

More on that in part 2.

Image from PixaayBay by OpenClips

Why an LPA?

Why did I pursue an Iowa “Licensed Public Accountant” designation? LPAs are an obscure lot, in that we only really exist in 3 states (Iowa, Delaware and Minnesota).

I was told anecdotally by another LPA in Iowa that my achieving the LPA designation makes me the 126th active LPA in Iowa. I haven’t verified exactly how many LPAs there are in Iowa but I have no reason to doubt what this person said to me.

I don’t expect the LPA designation to set my world on fire with new clients.

If the Enrolled Agent designation is the equivalent of Liechtenstein, then the LPA designation is Luxembourg.

But it does allow me to practice as a public accountant in Iowa. Indeed, I can do anything a CPA can do except for audits.

Changing World

Obtaining the LPA designation is the first step in me trying to open up more revenue streams for my firm. I don’t want to get pigeon-holed as “just” a tax preparer. While I don’t foresee major tax reform anytime soon, the fact is that Congress could always pull the rug out from the tax prep industry.

If all I do is prepare tax returns, my business is at the whim of whatever Congress does with tax law.

So I’m trying to open up two other revenue streams:

  1. Accounting services: even if income taxes were to completely go away, there’s always going to be a need for accounting services. That’s why I pursued the LPA designation and converted my tax prep business to a public accounting firm.
  2. IRS representation: there’s a lot of rhetoric from politicians about how a nationwide sales tax would make the IRS go away. But let’s be realistic — there will always be an IRS in some form because there will always be a tax system in some form. That means there will always be conflicts between taxpayers and the IRS, and there will always need to be professionals to help deal with the IRS. I am planning, in the next few years, to attend the three-year “National Tax Practice Institute” program offered by the National Association of Enrolled Agents. NTPI is an intensive program that teaches EAs the ins and outs of IRS representation.

Doing this will ensure that I have multiple revenue streams. If the tax prep stream ever goes away, I have other sources of revenue.

I don’t think tax prep will ever go away, but I do think the days of high-volume tax prep are going away. If I ran a business that depended on preparing hundreds or thousands of simple tax returns in order to survive, I’d be worried about the future. But that’s another post for another day.

Kudos to NAEA for Promoting EAs

ID-100211594I’m often critical of the National Association of Enrolled Agents, mainly over the fact that NAEA spends so much time kissing up to the IRS and bizarrely fighting both for (when it’s mandatory) and against (when it’s voluntary) regulation of tax preparers.

But I give them credit when it’s due. And NAEA deserves credit for the following two public outreach efforts:

Last week, NAEA President Lonnie Gary, EA, recorded the sound track on a two-minute video interview that will be shown on American Airlines flights over the full months of October and November of this year. The video will be shown on 5,800 worldwide flights to a captive audience who will learn what an EA is, why they should hire an EA, and how to locate one using the “Find an EA” directory. 


NAEA has purchased a corporate sponsorship on NPR stations across the country for January and February of 2015. Our sponsorship message referring to enrolled agents, America’s Tax Experts®, and NAEA, will run on all NPR stations across the country at various times in available slots – of which there are many in the first months of the year. Our sponsorships will mainly run during “Morning Edition” and “All Things Considered,” the morning and afternoon news shows, but will also be heard on weekend shows, such as “Car Talk.”

(Both items are courtesy of NAEA’s weekly E@lert newsletter from 8/1/14.)

Both of these are refreshing revelations. The idea of showing a video on American Airlines flights is particularly clever.

Well done NAEA.

Image courtesy of Stuart Miles /

Don’t Be “That” Business Owner

Don’t be “that” business owner. ID-100259612

That’s what I tell business owners who complain about having to follow the laws, regulations, rules, etc.

Case in point: one time I was talking to a business owner who was venting about his insurance company and the fact that he had to carry workers’ comp insurance. And he was unhappy about payroll headaches.

He went on to say that he was driving around and saw a roofer with “a bunch of illegal immigrants up on the roof and you know he doesn’t have payroll set up or carry workers’ comp.”

His question for me was: “why should I do things the right way and spend all this money on insurance and payroll when this guy doesn’t do those things and he doesn’t get caught?”

My answer was: you don’t want to be “that” business owner.

Actually my answer was more detailed than that.

ONE: Is that Business Really Being Underhanded?

Unless you know the business owner personally or have inside information, you have no idea how that business is really operating.

TWO: Is that Business Owner Really “Getting By with It?”

I hear this one all the time, even from people who don’t own a business. “My brother-in-law deducts ‘this or that’ and he’s always gotten by with it.”

You have no way of knowing if they’re getting by with it. Just because someone isn’t in prison doesn’t mean they haven’t been audited.

THREE: Is that Business Really Successful or Stable?

From a distance, it can seem like certain businesses are operating outside the bounds of the law, getting by with it, and doing just fine.

And in the short term, that is true.

Compliance is a long-term strategy.

If you plan to have a business that lives for a long time, it’s more cost-effective to be compliant up front, even though it might not seem like it.

But when you get caught, it all comes crashing down and you could lose everything you’ve worked to build.

Why Am I Preaching About This?

Yes, I am being preachy in this blog post.

I deal with a lot of businesses that are in the startup phase. I see too many with preconceived notions of what they can “get by with.” I’ve seen and read about too many people whose life got turned upside-down when they ended up NOT “getting by with it” after all.

So don’t be “that” business owner.

Image courtesy of Stuart Miles /