April 2022

Your last painful tax season

For the past 15 years, I’ve chatted, spoken, written and taught about the need for a business model to support the life you want to live.

It’s something I believe in so passionately that there were times I’d worry that my thought leadership crusade might be overwhelming you.

Thankfully, however, I’ve received feedback from so many firms over the years that I helped you feel empowered to make real changes in the way you run your firm. And I’m not embarrassed to say that when you tell me that it changed your lives, I get a little choked up. It’s such a powerful feeling to know that I had a small part in helping you and your teams live your best lives.

Today, I’m authoring this article with the same sense of urgency, but to convey a different message—and one that’s possibly even more important.

It seems so cliché to say that the world has changed, but seriously: THE WORLD HAS CHANGED IMMENSELY. And that leads us to the million-dollar question: How do those changes impact the business of accounting and tax?

Diagnosing the pains

First, let’s examine a few things that I think we can probably all agree on:

  • Digital adoption of technology has been a lifeline for many—and the norm for most. We’re talking about technologies like Zoom, Teams, Slack, QuickBooks® Online, Office 365, digital documents, online access…and the list goes on. We’d been easing into the adoption of these technologies over the past few years, and then suddenly, BOOM! It was here.

  • Staffing has been the number one challenge in firms for years. And the Great Resignation—which, sorry, not sorry, I prefer to call the Great Reassessment because it’s time to reassess the firm business model end to end—has coupled with the staffing challenge to create a real talent problem. It seems people are no longer willing to go along to just get along. Whether it was the ability to work from home, lack of childcare, government funding or people leaving the profession altogether, the result is an unprecedented demand for talent that requires a new protocol for recruiting and keeping staff.

  • Demand is much greater than supply. While we all learned what to do about this in college, the bigger issue is that accounting firms are slow to adjust—I suspect because they’re afraid of losing clients. But how long can you keep up a heavy workload with limited staff? It’s imperative to redefine the way we work, create scalable products and put a better pricing strategy in place…because supply is becoming limited.

  • Our teams desire—no, actually they demand—to work differently. People now put flexibility and freedom high on their list of priorities. With the lack of supply and increased demand, our team members are using their online skills to find opportunities to work the way they want, anywhere they want. And even if they don’t go looking, trust me: Other firms are trying to solve their challenges by poaching your talent.

I know, there are a lot of issues—and this is just my short list. Of course, none of these items are surprising; we’ve seen the trends coming for several years. But the reality is, the pandemic brought all of them to bear at this moment. And as a result, the world really did change overnight.

Firms can no longer ignore these seismic shifts, which is why I’m going to be blunt: To ignore the problem will only make it worse. The proof is that you’re still suffering through painful tax seasons. And ignoring the obvious only puts your business at risk.

Take two assets and call me in the morning

So. What should you be doing right now to evolve into a modern, sustainable firm in today’s world?

Your business strategy and business model must be re-architected. Yes, it can be a bit of a challenge, but if you believe and understand how these shifts affect you and your business and commit to the changes needed, it can be less challenging than you’d expect.

Let’s start with your business strategy. To evolve, you must recognize and put focus on your firm’s two greatest assets:

  1. Your people. Employee experience must now become your top priority as a leader. This is important—fundamental, in fact—because without your team, your firm will not succeed. When we examine the Great Reassessment, we must recognize that every staff member will reassess for themselves. What are tax season expectations? How much freedom do they have to work on their terms? How competitive is their compensation in a world of rapidly changing pay rate adjustments? How clear is their job path, and how connected are they to the mission of the firm?

  2. Your clients. I’m sure you realize that your client list is one of your biggest assets, but I’d bet you don’t treat them as such. How much time do you spend on smart client management, aka managing your client list properly and at a granular level? Smart client management requires you to:

    • Identify and manage the right kinds of clients (your ideal clients!).

    • Maximize the revenue from each client.

    • Ensure you have the optimum number of clients purchasing in each of your product categories—not too many, not too few.

    • Ensure you have intelligent insights into each client’s situation (DATA).

Firms that do all the above are far less likely to suffer from the pain of tax season.

Re-building healthy bones

The leader of your firm should focus most of his or her daily energy on the two strategies mentioned above.

However (there’s always a “however,” isn’t there?), as important as they are to thriving in today’s environment, you’re still destined to fail in this modern world if you haven’t spent the time laying out and implementing the right business model.

Your business model is critical. As the human skeletal system supports the body, the business model is the frame that supports your firm. That’s why I can’t stress this enough: Your business model cannot be an afterthought that just happens to the firm. It must be intentional. 

No matter how much attention you lavish on your people and clients, if there isn’t a solid business model foundation, you’ll struggle to thrive—and even survive.

I like to break the business model into three straightforward questions:

  • WHO do you want to serve?

  • WHAT do you want to sell them?

  • HOW do you want to deliver those products?

In the spirit of full transparency, I’m not going to tell you that considering and answering these questions thoroughly won’t be a challenge. But I can honestly tell you—backed by the reporting from the firms who did this work over the past 15 years—if you take on the challenge of clearly defining your business model, integrate sound strategies for staff and clients, and pay close attention to the clear trends of our time, you’ll have a winning formula for a modern firm.

And tax season will never have to be painful again.


Post-tax season challenge: Get back to basics

What a tax season!

Were you happy to have a typical deadline this year? Are you ready to take a step back, regroup and tackle the rest of the year?

First, take a moment to reflect on the last few months…and the last few years. There have been many highs and many lows. Mental and emotional burnout has affected us all, and those effects have forced many firm owners and staff to evaluate their “why.” Why do we do what we do, and why are we here?

For most, that question has forced them to pivot. For many, that meant leaving the profession entirely. For others, it meant reimagining the business. And for some, it meant that you just struggled forward and hoped for an end.

If you’re reimagining, keep going. Don’t stop now! If you’re on the struggle bus…make today the end of the struggle; even small pivots can have a huge impact on your work life.

The challenge, should you choose to accept

As tax season ends, you have a great opportunity to evaluate your business. I challenge you to start small by saying “No” to clients that are not ideal and saying “Yes” to those that are ideal—those that need the services that you provide best, appreciate the knowledge you bring and are willing to pay the fees that you’d like to charge.

As we move into the summer months and think about bringing on new clients, use these tips to help you get organized and make sure you are saying “yes” to the right clients. I’ll break it down into two areas based on what changes you may have already made.

If you need to get back to the basics:

  • Evaluate what you do and how you do it. You need to relieve stress by focusing on the services you offer and the process you use to provide them. Eliminate what you don’t do well and create a consistent process that can be followed for the services you keep.

  • Decide who you want to work with. Stop saying yes to every prospect. Evaluate the types of clients that make you happy and support your “Why,” and commit to saying yes only to those that fit this description.

  • Get rid of problem clients to free up capacity. Evaluate your bottom 20%. Calculate the time spent on their services vs. the fees you’re charging and commit to firing those whose average hourly rate calculates too low. (If this sounds scary—and I know it does—as you bring in new business, fire clients with an equal amount of revenue.)

If you’ve pivoted using some of the above, what are your next steps?

  • Make sure your online presence supports your firm.

    • Claim your Google Business Profile and add it to your email signature.

    • Add a “Contact Us” link to your website with a fillable form so clients and prospects can reach you digitally and you can vet the questions before responding.

  • Evaluate your client list.

    • Chances are you’ve eliminated some of the “problem children,” however, you should evaluate your client list annually.

    • Review the bottom five to 10% of your client list and decide if you need to replace them or raise fees.

  • Touch base with referral sources.

    • Ask your ideal clients for referrals.

    • Make sure they know who you want to do business with.

  • Schedule your firm’s marketing.

    • If you haven’t already, create an annual marketing plan. Plan campaigns for each month and execute them consistently.

Challenge accepted

If you need some tips on analyzing your tax season data, look back to Lindsay’s March Thought Leader article. And, if you’re feeling a little overwhelmed from the season, remember to start small and take easy steps. Each step leads to a big difference in the end.

When you’re ready to start, visit rootworks.com and sign up for our Onboarding new clients and Deconstructing tax season Staff Training webinars, or download our Turning your services into products or Annual communication plan spreadsheets.

Good luck! And congratulations!


Review stars plot the course for selling season

Every client of an accounting firm has either a great experience or a poor experience. Both experiences are rich in opportunities and valuable information for firms to learn and grow. In this article, I hope to explore why a modern firm should seek out information around their clients’ experiences and how to use that information to plot the course for the selling season.

Modern firms should strive towards having a “firm understanding” (pun intended) of their clients’ tax season experience. A firm without insight into its customers’ experiences is like a mariner without a sextant. It is going to make navigating towards your planned horizon much more difficult.

Gathering information on your clients’ experience this tax season can help you make the necessary course corrections in the appropriate areas before the selling season hits. I have two tips for gathering and analyzing data:

  1. Collect data from online reviews. Online reviews are a great starting point. There are several ways to collect this information, but the key is to make it as easy as possible for the firm to ask and the client to provide. Too many complexities between the two lead to less information coming into the firm and fewer data points to assist in plotting your selling-season course.

  2. Identify patterns, pain points and strengths. Once you’ve collected reviews, read through them to learn about your clients’ experiences. The challenge here is to throttle assumptions about those great five-star reviews (“Oh yeah, we’re perfect!”) and those painful one- to two-star reviews (“Oh no, we’re terrible!”). Both types are valuable, and you can expect to see both types given enough time and submissions.

Some thoughts on how to use your reviews

Positive and authentic client reviews are high on the list of deciding factors for those seeking a new accountant. When clients have great experiences, seize the moment. Don’t only capture their positive reviews, but make sure to share them on your website, social media and marketing campaigns. Video testimonials are also a great way to enhance a client’s authentic positive experience.

In short, the positive reviews are the wind that fills your firm’s “sales.” Ensure you have your sails unfurled; otherwise, all that favorable wind will blow by.

No matter how well you and your firm have worked to establish an excellent client experience, you’ll eventually encounter at least one bad review. Avoid allowing any less than stellar reviews from clinging to your firm like a barnacle. The best approach here is to post a timely and professional reply. Doing so helps leads see that your firm is proactive in your communications and paying attention to your overall client experience.

Also, take time to do a “post-mortem” with your crew related to the associated client work. Doing so will help you gain valuable information and identify what course corrections (if any) are needed. Remember, sometimes barnacles latch onto a hull because that’s what barnacles do.

With these thoughts in mind, I wish you all the best in closing out this tax season and look forward to seeing your firms thrive this coming selling season.

Ready to start collecting reviews and gaining insight into your clients’ experiences? If you’re a Rootworks member, head over to our vendor section on workspace.rootworks.com to check out Grade.us as an option for collecting and responding to client reviews.


4 habits to set your firm up for marketing success

Now that the finish line is in sight, it’s an ideal time to transition your focus to marketing to ensure your pipeline stays full for the remainder of the year. However, positive results from your marketing efforts take time and strategic planning. Let’s look at four good habits you can adopt now that will help to set you up for success.

  1. Set SMART goals. Marketing starts with identifying your goals and then creating a strategic pathway to achieve the results you’re seeking. Goal setting provides a baseline to measure success or failure when it’s all said and done. Set SMART goals using this formula:

    • Specific: Identify what you want to achieve in precise terms.

    • Measurable: Tie your goals to hard numbers that can be reliably determined.

    • Agreed upon: Gather your team’s input; they’ll be the ones executing the plan.

    • Relevant: Make sure your goals align with your overall vision.

    • Time constrained: Set deadlines to help you create a plan for action and accountabilities.

  2. Create a marketing plan. Achieving goals is best managed when you break them down into weekly, monthly and quarterly objectives and identify the steps required to achieve them. Assign timelines and ownership for each part of the plan.

  3. Ditch the DIY approach. Your brand is everything when it comes to portraying a professional image. Don’t jeopardize it with less-than-professional graphic design or writing. Professional, on-brand marketing content takes cultivated skill. If no one on your staff has the skill set, be prepared to make allowances in your budget to hire a professional to take on this task.

  4. Take care of your clients. The easiest path to grow revenue is increasing your engagements with existing clients. A happy entry-level client today may be a far more valuable client tomorrow.

Remember, marketing is not a sprint but rather a marathon. Implementing these four steps now will help lay the groundwork for a successful year ahead. If you realize a marketing plan is necessary, but you just don’t have the time to create and implement a strategy for your firm, visit our website to learn more about our Marketing Solutions products: https://www.rootworks.com/marketing-solutions




Events for Rootworks members
Check out these upcoming events exclusively for Rootworks members:

  • April 27 – Staff Training: Onboarding new clients

Log in to your Rootworks.com account and visit Resources > Events > Webinars to see the entire webinar schedule and register.

Events for everyone
Not a Rootworks member yet? We’ve got you covered with events where you can learn more about Rootworks or about the latest hot industry topics.

Visit rootworks.com/webinars for a continually updated schedule of events.


What we’re working on

Inspire is back—live in Sarasota!

The Ritz-Carlton
Sarasota, FL
November 29–December 1, 2022

Registration opens soon, so stay tuned!


Member anniversaries

It’s time to recognize the April Rootworks member anniversaries! Help us wish the following firms a Happy Rootworks Anniversary:

1 Year 
Gorden & Co., P.C.
Bottom Line CPA, LLC
Reza CPA LLC
Waymark Advisors LLC
Lloyd & Hodge, PLLC
Parkins Financial LLC

10 Year  
Graffin Associates PC

Congratulations on your success, and we look forward to celebrating many more anniversaries with you and your teams!