May 2022

Smart Client Management: The only way forward

Relying solely on tax season revenue is wrong.

And I’ll tell you why.

First, it’s a decades-old approach to running a firm. But it’s also financially dangerous. You’re putting all your eggs into one basket and relying on that basket to fund your firm for an entire year. It just isn’t practical.

Second, you’re forcing unnecessary pressure on your staff to serve clients within a compressed timeframe. That can lead—if it hasn’t already—to staff burnout and high turnover. Not a good look for your firm, when your staff is the fuel that makes the business engine run.

We must stop thinking of accounting as a tax season-only profession and admit that accounting and tax is a year-round profession. It’s the only way firms can keep their highest-performing employees and attract A-list candidates. It’s time we begin thinking (and working) smarter.

And that starts with Smart Client Management.

The 4 goals of Smart Client Management

“But, Darren…I thought you already went over this?” Yes, I covered the basics of Smart Client Management in my February Thought Leader article, but I want to dive deeper into the concept.

You need to actively manage your client base. At the same time, you need to find, keep and maximize revenue to the fullest possible extent with your current client base.

There are four goals to focus on when we talk about Smart Client Management:

  1. Optimize services: Your client and product mix must provide a steady flow of work—enough to keep your staff 70%-80% busy all year. Keep a 20%-30% buffer to absorb the peak of tax season.

  2. Leverage client data to gain valuable insights: Using the right CMS (Content Management System), you’ll already have valuable insights at hand. You’ll know which clients don’t have a retirement plan in place, who needs advice on entity structures and who’s looking for payroll advice. Use what you have to proactively upsell to your existing clients.

  3. Use insights for technology adoption: Define a standardized client tech stack to fuel productivity firm wide. For clients not using the technologies your firm uses, you already have the insights available to target the non-users and get them integrated into your systems. That’s another upsell.

  4. Maximize revenue realization with recurring revenue-based pricing: It’s time to step outside your comfort zone and talk about fees with clients. Subscription-based pricing and recurring revenue are where your firm should be headed, if it’s not already there. Going this route will maximize the value of your business and keep cash flowing throughout the year. (This is how those eggs are consistently put in the basket each month.)

I’m not telling you to go out and find new clients. I’m telling you to define your ideal client, make sure you’re productizing the services you want to provide—at the right prices—and using the technologies you have to optimize your business process.

That’s Smart Client Management.

Defining your business model

To understand and successfully practice Smart Client Management, you need to take a close look at your business model. If it’s outdated, Smart Client Management won’t work for you. It’s time to ditch the traditional and start going modern.

A modern business model has three pillars: WHO, WHAT and HOW. Let’s break those down in a little more detail:

  1. WHO. You need to know WHO you want to serve—your ideal clients. This doesn’t mean anyone who walks in the door. You have to know who you want to serve and who you’re good at serving, then actively manage your client list based on this insight.

  2. WHAT. You have to know WHAT you want to sell. This boils down to identifying the services you’re good at supporting, whether you have the right staff to support those services and what you can standardize—or cobble together to create “off-the-shelf” products—to make repeatable across your ideal clients.

  3. HOW. You have to know HOW you’re going to deliver your products to clients. This should include the right technologies to deliver services efficiently and with as little friction as possible. Decide which applications are included in your firm’s tech stack and ensure that your clients are on board. If they’re not, then they’re not ideal—and they need to go.

A modern business model leads the way to Smart Client Management. Without it, you’ll stay where you are, relying on tax season revenue to fund the rest of the year.

Why it matters

Everything I’m telling you about Smart Client Management matters—especially defining your business model. If you want your firm to grow in a sustainable way, you must fully understand and practice Smart Client Management. At its core, it’s about maximizing revenue per client. It’s using data to gain deeper insights into the services your clients need and proactively selling those services to your current client base.

Smart Client Management matters because your firm can’t rely solely on tax season revenue; it needs a year-round revenue stream. It matters because you can’t afford to overwork your staff to the point of burnout during tax season—your firm needs happier and engaged staff. It matters because clients have challenges and service needs that extend beyond tax preparation. To keep satisfied and fully supported clients, your firm must expand its services. And Smart Client Management will get you there.

It’s time to get started

The first step is always the hardest, but I urge you to start taking those steps. Begin by analyzing your existing client data to pinpoint upselling and cross-selling opportunities. Dedicate a champion who can consistently review and explore new opportunities. Lean into technology and modern thinking to bolster your firm’s efficiencies (i.e., a modern tech stack) and increase time savings.

Stop taking any client who walks through the door during tax season and start focusing on the clients you want to do business with throughout the year. Make sure you’re putting plenty of eggs in the basket every single month, not just during tax season.


In order of importance: How to tackle firm changes

April 15—wait, April 18—has passed, and now we’re in a more “normal” year, as far as the traditional accountant calendar. But in the break between now and the September and October deadlines, we need to prioritize the changes we want in our firms.

As we consider any changes to make in 2022, we have to remember to change the “Tax season is what it is…hey, as long as it doesn’t completely suck, right?” mentality.

You’re probably already getting sales calls from technology vendors who promise they can solve all your issues. And sure, they may be able to solve some things, but it’s more important to make sound decisions that actually make lots of things better. Which is why you should evaluate and make firm adjustments in the following order:

  • Clients

  • Processes

  • Staff

  • Technology

Notice that technology is listed last. Why? Because the most common mistake firms make is changing tech solutions without addressing the real issues first. It’s kind of like the time I got five speeding tickets in one summer…and I traded in the car instead of fixing my lead-foot issue.

Here’s the reality: Technology is used to support or improve your processes and your staff so you can provide quality products and services to your clients.

Your clients are always the best place to start. To effectively adjust your processes, maximize staff and determine technology needs, you first need to identify your ideal client and client up your client base.

If you design your firm processes, staff and technology based on your non-ideal clients, you’ll likely be doing large overhauls every couple years. And doing massive process, staffing or tech changes that often is wasteful of both your time and your money.

What should be done in May

Since tax season is still fresh in your mind, now is the best time to inventory your client list and rate each client. You may already have a format that you use to inventory and rate your clients, but if you don’t there are client intelligence management tools like Rootworks’ ClientView™ to assist you in that process.

You should also determine your ideal client before doing your client inventory. Here are a few tips to keep in mind when doing your client analysis:

  • Always keep your ideal client in mind.

  • Go into this process expecting to do some of the following:

    • Raise fees more than a nominal amount.

    • Fire clients.

  • Involve multiple key staff in the rating process. Your feelings about a client may not be the same as the staff that work directly with that client every day.

  • If you’re a Rootworks member, review the Rootworks Million Dollar Firm spreadsheet to determine your ideal client mix. The spreadsheet allows you to map out your ideal firm (don’t worry; even though the name references millions, it will work whether you want your firm to be worth $250,000, $500,000 or $4,000,000).

  • After you’ve determined your lists of fee increases and clients to fire, update your Million Dollar Firm spreadsheet.

  • On a regular basis, review your spreadsheet and update it with any progress you’ve made toward your ideal firm.

Finished making changes to your client base?

Once you’ve finished going through your firing and fee increase lists, act on them. Clearly communicate the changes to staff and impacted clients, then move down the line to the next priority, which should be your processes.

As you did with your clients and fees, complete your process changes. Rootworks.com has a “Documenting your processes” guide you can use to help you complete these changes.

Do the same with staff, and then you can tackle technology—but with the knowledge that you’ll spare your firm the hassle of constant technology changes for the sake of change.

That’s why it’s imperative to do things in the smarter order with all the facts in hand. This will enable you to have an ideal client list, better defined and established processes, and a maximized staff before you throw new or different tools into the mix.


Yes, AND: A simple step toward smarter client management on the web

Let’s be honest; the term Smart Client Management can be intimidating, can’t it?

Sure, everyone wants to manage their clients smartly, right? If you don’t, you probably shouldn’t have clients. But it’s such a BIG term, and it encompasses so much.

Plus, it’s not like we’re not coping with other things, like a tax season that spanned the better part of two years that seems to finally be coming to an end (well, at least until the IRS jumps out from behind the screen and yells, “HAHAHAHAHA fooled you all! SIX MORE MONTHS!!!!!”). Or challenges with staffing. Or never-ending CPE requirements.

And now there’s a new to-do popping up around being smarter in managing your clients, when you’re pretty sure you’ve been smart all along. That’s enough pressure to make plenty of folks think twice about building and improving their firms.

However…if you’re reading this newsletter, you’re not among those ready to throw in the towel just yet. (Trust me on this; I know the quality of our readers.)

So in this article, I hope to reveal how we can make the intimidating a little less so—and provide your firm with a few simple steps to ease you toward a smarter way to manage your clients.

Time: The most valuable commodity for firms and clients

Initial consultations are significant time investments on both sides of the table, even if many consultations reveal that the prospect is not an ideal future client (or even a “deal” at all).

If your firm finds it hard to say no in these instances, consider reframing your response by taking a page from Improv Comedy 101 and use a “Yes, AND” approach. The “Yes, AND” game requires actors to accept their fellow actors’ ideas and build on them. (Here’s a short and clear explanation of how it works: Minute Improv Yes, AND.)

Why not employ this tactic to revisit the concept of “starting at” prices? When you communicate your firm’s entry boundaries around the value of the time spent for your services, you can save both parties valuable time and potential frustrations.

You might agree it sounds like a solid start, but at the same time you think, “But if I post my starting prices, my competition will see them!”

A perfectly reasonable thought—and yes, that’s possible.

(Random observation: It also brings back memories of a couple of stellar lines delivered in “Dr. Strangelove” by actor George C. Scott: “We are rapidly approaching a moment of truth…Now, truth is not always a pleasant thing. But it is necessary now to make a choice…” and “…are you aware of what a serious breach of security that would be? I mean, he’ll see everything. He’ll see the big board!” Classic films are the best!)

I want to stress that taking a “Yes, AND” approach can free you from worrying about what the competition will do as a reaction to your firm’s entry boundaries. It will also help you focus the investment of your time in other areas.

Remember, your time—and your clients’ time—is the most valuable investment commodity you have. Staying stuck in a scarcity mindset based on the reactions of your competition may help you feel more secure, but I promise, it won’t help you move toward smarter client management.


The content package: The key to client communication through your online presence

Now that tax season is in the rear-view mirror and you can take a moment to breathe, it’s a good time to evaluate the current state of your firm’s online presence.

First, what exactly is an online presence? A good basic definition is the collective existence of a company that can be found online via an online search. That means your website, social channels and Google Business Profile are all essential parts of your online presence.

But the key to boosting your online presence is being an active player when it comes to managing these platforms.

Content: The online presence-booster extraordinaire

If you’re like many other firms, your online presence likely took a back seat over the last couple of years—and your last social post may be several weeks or even months old by now. However, it’s a consistent online presence that’s most important to a firm that wants to thrive in this digital age.

One solution to actively managing your online presence is to use a content package that provides you with the tools to share content developed specifically for accounting firms. To give you an example, Rootworks offers a content package that includes educational eBooks, client magazines, social media posts and business-focused QuickReads articles—all of which serve as valuable, educational and even entertaining resources for clients, prospects and community.

Staying connected to your clients and community throughout the year with timely, relevant content presented via your social channels, Google Business Profile and website is key to sustaining client loyalty and getting noticed by prospective clients. This is where a Rootworks-style content package more than earns its keep, because it does all three.

When you post ready-made content to your social channels and Google Business Profile, you’re ultimately driving traffic back to your website (aka your digital front door). Best of all, by adding a link to your website’s contact page, your visitors have the option to request more information or to schedule a consultation—which, in the case of the Rootworks content package, adds the prospect to your ClientView™, which allows you to maintain an organized list of prospects in a single space for follow-up.

If you find your online presence needs attention, but there’s no time in your busy schedule for internal management, I encourage you to check out our Marketing Solutions lineup. Our team of experienced online marketing pros will help you with everything from basic optimization to developing marketing plans tailored to your goals.

Rootworks members tell us all the time how much they appreciate knowing that they can count on their social sites being regularly updated with fresh, engaging content and—a golden ticket in an online world—the ability to collect positive client reviews.

 To learn more about our Marketing Solutions, visit rootworks.com/marketing-solutions.




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

  • May 4 – Staff Training: Deconstructing tax season 

  • May 10 – Summer website update webinar 

  • May 11 – Staff Training: Evaluating your firm’s staffing needs 

  • May 12 – Spring Technology update webinar: Evaluating your tech stack and making smart decisions 

  • May 19 – Staff Training: Onvio Beta Tax update 

  • May 24 – Spring resource update webinar 

  • May 25 – Staff Training: How to manage your workload 

  • May 26 – Staff Training: Facebook marketing tips and strategies to help you reach your firm’s goals 

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 topics in the profession.

  • May 5 – 4 ways to attract and keep great team members

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

The Modern Firm Workshop

These live, in-person two-day events feature Darren Root, who literally wrote the book on building a modern firm. Get your hands on Rootworks’ proven blueprint for structured, intentional firm transformation to stay relevant and thrive in today’s new world. Choose from four dates and locations:

  • June 28-29 – Boston, MA

  • August 30-31 – Dallas, TX

  • October 4-5 – San Diego, CA

  • November 7-8 – Washington, D.C.

For more information and to register, visit rootworks.com/the-modern-firm-workshops-2022.


What we’re working on

Inspire registration is open!

We’ll be in familiar surroundings at the Ritz-Carlton in Sarasota, Florida November 29–December 1 for Inspire 2022.

It’s the perfect mid-holiday season break for soaking up sunshine, strolling the white sand beaches and taking in blazing sunsets over the Gulf of Mexico—while you reconnect with the Rootworks crew and your community of peers from across the country..

Celebrate a successful year with your team and gear up for 2023 by starting with your toes in the sand and a drink in your hand!

It all begins at Inspire.

Check out the event details, including agenda, hotel and registration, at rootworks.com/inspire-2022.


Member anniversaries

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

1 Year 
JL Reyes Accounting & Tax Service
Dustin Mason LLC
AVI Accounting LLC
Bryce Ledet, CPA PC
Rozenberg Management
AJE Associates, PC
Moffit & Black CPA
WealthSpring Financial Services
Brooks & Associates, PLC
Kim Mallard, CPA, PLLC
Rubin Koehmstedt & Nadler
Kelly Tate CPA

5 Year
Pesante Close LLC
Profit Docs
Mangum & Associates
Mangum & Associates, Inc.
Zion, Synek & Associates
Whitcomb & Hess, Inc.
Williamson & Associates, Inc.
Robert Palmer and Associates LLC
Marshall, Wagner & Assoc., P.A.

10 Year  
Paul S. Crabtree CPA PLLC
Potts & Company
Fenton & Ross
Madsen, O’Meara and Company P.C.
Stephen P. Pryor, CPA
Higby Advisors
Berndt CPAs

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