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Estimated reading time: 7 minutes, 20 seconds

Accountants and CPAs have a stereotype of being primarily income tax professionals. And while it’s great to be considered an expert, if that’s the only thing that your clients (or potential clients) think of when your firm comes to mind, you could be missing out on many areas where you could provide them with service.

Unfortunately, the income tax focus is an impression that has been reinforced by many small and mid-sized accounting firms that over-specialize in those taxes. In fact, income tax compliance in some firms may account for well over 50 or 60 percent of total annual revenue crunched into two months of the year.

A Healthier Firm, And Happier Staff
The key to a healthier firm is to have a more diverse portfolio of client services. This not only allows you to serve your clients in more ways and via more profitable channels, but balances out your revenue stream throughout the year, and helps avoid over reliance on one or two specialty areas. As an added benefit, reducing the role that income tax preparation plays in your firm can reduce the stressful long hours of the busy season, giving you back your evenings and weekends. (April is a beautiful month, if you can get outside to enjoy it.)

As an accounting professional, you have a wealth of expertise and experience that you can offer, and your firm’s service offerings should reflect these diverse skills.

Income Tax Planning
Tax planning engagements can be one of the easiest “add-on services” to get a client to sign on for, and they are an excellent way to strengthen existing relationships with tax clients. Here is where the value of a savvy tax professional really shines, by allowing him or her to develop proactive strategies that can save clients money in a demonstrable way.

Unless they like paying more than they are legally required to, of course. Tax planning engagements are most often scheduled for September and October, giving the client time to put the tax-saving strategies in place. They are generally provided as a one-time consulting engagement, but can be bundled with a year-round compliance service.

Sales Tax Compliance
With e-commerce rapidly changing the definition of nexus, and states increasing their focus on sales tax collections, many firms are finding that sales tax compliance is a new growth area. With more than 10,000 sales tax jurisdictions across the U.S., even small businesses are becoming overwhelmed by trying to keep up with constantly changing rates, confusing taxability rules, varying reporting deadlines, and remitting collected taxes.

Furthermore, new automation tools are making it even easier for accounting firms to manage sales tax compliance for multiple clients, with systems like AvaTax ensuring that the correct sales tax rates are updated and applied, taxability rules are followed, and all sales tax returns are filed accurately and on time. Firms managing sales tax issues for their business clients also offer assurance in keeping the business compliant, can represent them in the event of a sales tax audit, and have the opportunity to consult with the client throughout the year on sales and taxability issues. These firms often achieve greater insight into their clients’ financials, since they are more frequently engaged with their sales activities. Enhanced firm visibility and value also helps strengthen the client-firm relationship.


Virtual CFO/Controller Services
This is the new bookkeeping. When the small business client and the firm are both using modern cloud technologies, the Virtual CFO paradigm allows the professional (or other staff at the firm) to actively participate in the business’ daily bookkeeping and business management activities.

Instead of letting them go it alone and often guess at which account to post expenses or receipts to, providing this service helps keep the books clean for a fraction of the time it would take to clean them up, and gives the business client peace of mind. Virtual CFO/Controller Services are an ongoing service that firms generally charge a recurring monthly fee for. Many firms offer varying levels of service, or packages, depending on the amount of time and engagement the firm will provide them. The rates, however, are not based directly on time, but on the principle of value billing.

Payroll Services
Almost every business has payroll needs, and if you can provide those services for about the same price as they would pay, while also making a profit, then it’s a no-brainer. That is where professional payroll systems are these days, with exceptionally affordable tools that are also easy to use.

Once a client is initially set up, the web-based programs automate virtually everything, calculating all withholding and third-party payments, processing all of those payments electronically (direct deposit, to payroll cards, or the option to print checks), and even preparing quarterly and annual wage reporting filings. The staff simply enters a few bits of data, such as hours for hourly workers, tips, bonuses, and any vacation time used, and then reviews the payroll reports prior to approving the payroll run.

For firms that ramp up with seasonal or part time staff during the tax season and who are considering adding payroll services for the first time, transitioning one or more of those temps might be a good way to manage the admin and clerical work associated with the payroll processing, while the firm’s more seasoned staff work on higher value engagements. Payroll services are an ongoing service that strengthens client relationships by increasing their awareness of your firm, while also providing ongoing revenue. The more client payrolls you process, the more your firm earns, with no additional expenses.

Business Consulting
If your firm is in the business of helping businesses (and individuals) with their periodic write-up and reconciliation needs, and year-end tax reporting, you are providing after-the-fact services. It’s time to take a more proactive approach to their business’ financials by helping them grow and increase their profitability. If you’ve developed a client specialty, contractors for instance, you have knowledge and experience that is valuable to others who are in that sector or who are considering starting a business. Common services include developing and honing business plans, business valuations, helping clients explore new markets for expansion, and creating new business entities for LLCs and corporations.

This can be a one-time engagement for some clients, but ideally you will offer annual or semi-annual business consulting briefings with your business clients.

Forensic Accounting
Did you play detective as a kid? Most people don’t see the connection, but accountants frequently play that role, sifting through mountains of client data to find that one misclassified transaction (there’s always more than one) that’s messing up the balances. With forensic accounting services, generally offered on as as-needed engagement, the accounting professional is often looking for diverted or missing funds.

While the cause may be a thieving employee, there isn’t always an evil-doer at work: There may be erroneous recurring payments, overages or other issues at fault.

Litigation Support
Most accountants aren’t lawyers, and very few lawyers are accountants. But lawyers do need accounting experts for cases involving financial crimes, divorces and family disputes over business and estate holdings.

Accounting professionals are highly-valued as expert witnesses, particularly if they have a knack for explaining business and financial data in layman’s terms that a jury can understand. These services are offered on a per-case or per-hour basis.

Bundled Business Services
Many of the above engagements can be bundled into inclusive package pricing for clients. For instance, instead of billing separately for handling a client’s booking and payroll functions, the firm can include these together, along with monthly sales tax compliance, annual wage reporting and one business consulting and review engagement per year, for a recurring monthly fee.

Some firms even bundle in a business client’s tax returns and planning. These engagements can help even out some of the bumps in your firm’s cashflow and workflow throughout the year, providing more stable revenue across more services, and strengthening client engagements.

MARK A. LOYD, ESQ., is a partner and Chair of the Tax and Employee Benefits Department of Bingham Greenebaum Doll LLP, a regional business law firm.  His areas of practice concentration are state, local and federal tax litigation, controversy resolution and planning.  He is licensed to practice law in Kentucky, Indiana, Ohio and Tennessee. Mark is also a Certified Public Accountant. Mark is the Co-Chair of the ABA/IPT Advanced Property Tax Seminar, Co-Chair of IPT’s Income Tax School I, Chair of the Editorial Board of The Kentucky CPA Journal, and Chair of the Kentucky Society of Certified Public Accountants’ Taxation Committee, among other endeavors. He has written extensively on tax matters in publications such as The Tax Lawyer, the Journal of State Taxation, and State Tax Notes, among others.  He is a frequent speaker on tax matters.

Last modified on Tuesday, 06 February 2018
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