Last week I read two articles on the CPA Trendlines website which breathlessly stated that there were “price wars” over tax preparation this year, and that preparers were losing price-sensitive clients. We also know that the number of tax returns being prepared by professionals has decreased this year, while the number of self-prepared returns has increased.
I, too, have seen some price pushback, but I don’t know that it’s any worse than it’s ever been. I’ve only had one semi-confrontation about pricing this year, when a client told me they were “shocked” by my fee of $175 for a tax return with itemized deductions. (I responded by pointing out that the competing CPA firm in my town charges $250 for that type of return, and that the regional average is around $200, so they were actually getting a bargain by working with me.)
That person paid my fee. But they may not return next year.
I expect 5-10% of my clients from last year will not return this year, mainly due to fees and/or the preferring to do it themselves this year.
And that’s okay.
Unless a practice revolves around volume, what’s so bad about a client leaving because of fees or because they prefer to prepare it themselves?
Unless you drop your fees down to TurboTax range, that type of client will never see value in what you do. You’re just someone punching numbers into a computer and pushing “send” on the e-file.
My goal is to have clients who actually need a professional preparer, or at the very least, people who could prepare their own taxes but who like the comfort provided by having a professional take care of it for them.
I’m always upfront in saying that if someone is capable of preparing their own tax return and they feel comfortable doing so, then they should prepare it themselves (or find a tax pro whose rates are cheaper than mine) instead of using me.