The Lazy CPA's Tax Tips

No April Fools

It's April 2nd, and I've spent the better part of this week at Newport Beach - walking and enjoying being out of the office. I have completed all my tax appointments for the year and have collected all my receivables as well. I'm rested and ready to return home to my family. On April 15th, I'll be on vacation with my family, what will you be doing? If you would like to know how I am able to take time off during tax season, just contact me here.

How To Become the Trusted Expert for Several CPAs

Acting as a sounding board helps clients and their CPAs better understand the advantages of working with an advisor—and that you’re looking out for their best interests.

Are you one of the many financial advisors who have referred clients to accountants over the years but have gotten virtually nothing in return? Based on the law of reciprocity, you would think that giving would initiate the receiving process. But with CPAs, that is often not the case. Often it’s a one-way street.

But a select group of FAs have figured out what is undermining their referability with accountants. As a result, they are receiving a steady stream of endorsements from these very persuasive sources at this critical time in the financial services market. Never has money been so topical, and never before have so many high-net-worth investors been disillusioned with their advisors.

Recent studies have indicated that as many as seven out of 10 HNW clients are unhappy with their current financial advisors. In many cases, trust has been shattered, and these high-value people are cautiously considering other options. Now if HNW clients have lost faith in their advisors and they are also feeling anxious about their personal financial direction, whom do they call? More often than not, they call their accountants.

The problem is most accountants are more technicians than visionaries. They often leave their clients wanting more when it comes to the big picture, market forecasts, and personal investment strategy. Yet when clients press accountants to suggest a financial advisor, many are reluctant to make an endorsement. Why do you think that is? What is holding them back?

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Defining YOUR Business Model Eliminate The Biggest Obstacle...YOU!

Many years ago, I was hired by another CPA in California as a business consultant. Here’s what he said, “Nick, my practice is all messed up, will you come in? I will pay you $5,000 to come in for a week or two and do a complete analysis of my tax practice because I know you really like systems.” This was during the summer months and I figured it would be an easy way to pick up $5,000, so I agreed. As he had requested, I went through and analyzed EVERYTHING. I interviewed his staff, I interviewed some of his clients, and I reviewed his procedures. I did a really thorough job. His name was Marv, and after a couple of weeks, I told him, “Marv, we need to sit down and talk in your office. I’m ready to give you my report. If it’s okay with you, I’d like to do it verbally on a yellow pad first, then if you want me to type it up later, I’ll be glad to.” So, we went into Marv’s office. Marv looked at me expectantly as I told him, “Marv, you’ll be happy to know that I’ve discovered exactly what your problem is.” He was delighted that I might have pinpointed his situation. I continued with, “Not only that, I can tell you that I can boil down the problem area to a 3’ by 3’ square.” With that, he took my bait and begged me to tell him where it was. I said, “Marv, you’re sitting in it.” Marv was a bit confused by this statement and asked me to elaborate. So, I proceeded to explain to him that the way he interacted with his clients, his staff and his systems was interfering with his success. I coached him to step back a bit from the process and actually DO LESS. I was convinced that his practice would improve if he backed off a bit. I still chuckle today when I remember that I had to go over all the things he needed to STOP DOING. It was quite a concept for him to grasp: not doing more, but doing less! A few weeks later, Marv came to me and confessed that he just wasn’t comfortable executing my instructions – it just caused him too much anxiety to consider implementing my recommendations. But what he did want to do was sell me his practice and come to work for me. All he wanted was a percentage of what he billed. He actually put more money in his pocket under my systems than he did out on his own. What Marv realized through that analysis was that he just could not shed the fears that compelled him to micro-manage his practice. I’m not saying that you need to sell your practice to experience the business model of your dreams. What I am saying is that you need to face your current situation objectively and eliminate the fears that stand in the way of the lifestyle you are really looking for.

I have learned that in order to improve my practice, I have had to recognize and shed my FEARS. Once I started doing this, my practice really began to take off! I was very surprised by the number of fears I kept hidden away – fears that drove me to all kinds of inefficient behaviors. Fears that I thought “protected” my success. I have found that each time I face and shed a fear, my practice jumps up another notch. It is my hope that yours will do the same!

Fears That Drive Your Thinking

Defining YOUR Business Model

Before you think about another tax season, I want to challenge you to step back and really think about your tax practice, where it’s going and how you’re living it. Most tax professionals are so busy about the day-to-day activities of running their practices that they never stop and think about what kind of practice they really have – or really want. I hope that you have completed the Client ABC’s action from last month as it will provide you with a great foundation for realistically defining YOUR best business model for the future. This month is about building a tax practice that suits you, your family, and your clients. It’s about defining your business based on your Client ABC’s, your preferences, and abilities.

The great thing about having a defined business model is that it can be changed whenever it seems appropriate. When I first started providing financial services to my tax clients, I had an egalitarian model: I would serve all my tax client’s investment needs, whether it was a $2,000 IRA, an automatic monthly investment or a complex retirement plan. That was about five years ago. Today, my model is somewhat different because I learned that I liked the meatier, more complex clients. The great thing about having a clear model is that when I change it, I understand the differences and am better able to navigate the transitions. I can make smart decisions about how I will handle those transitions. Instead of my practice developing along an undefined path, driving me day-in and day-out, I feel that I am in charge of the process and can look forward to the results. Results that I have already defined.

That’s why I want you to have a goal of how you want your practice to be. Only by identifying a clear business model, can you work toward the success you are looking for. Rather than becoming all things to all folks, I want you to consider how you work best and with whom.

Client ABC’s Revisited

Post-Season Wrap Up = Success

Post-season wrap up practices are actually a very important part of your overall tax-season success – for this year AND next year. Wrapping up the loose ends of this season and analyzing your overall activities will set you up for an even greater success next year. Unless you are planning to retire before next tax season, you’ll want to make sure that you are positioned for a better next year. Throughout the year ahead, I will be helping you use the quieter time of the year to your best advantage by completing certain activities each month. This month is all about truly finishing tax season when all you want to do is forget about it.

REVIEW  - Reviewing the season just past for successes and failures will provide you with good information for making next tax season even better. It’s important to do this BEFORE you or your staff forgets what this tax season was really like! Remember, each year I start my next tax season by reviewing this season, completing any loose ends, analyzing my client base and revising my business model. Every year. I suggest you do the same.

I’ll bet you encourage your business clients to measure their productivity and progress on a regular basis. If you are truly treating your business like you want your clients to treat their businesses, I ask you: how do YOU know, how do you MEASURE your progress each year? How do you know if you’re improving or not? How do you measure your success? Do you measure money? Did you make more money this year? Maybe you kept more money this year. How do you know if you’re taking 6 minutes or 10 minutes to process a tax return? Do you have other team members review the return? Make sure you factor in their time and costs as well. Follow your own advice to your business clients, and take the time to analyze your business activities along with your income and expenses for changes. Compare last year’s revenue breakdown with this year’s and look for discrepancies. Ask yourself additional questions like:

The Final Stretch - How Do YOU Get Paid? Using E-Filing To Improve Cash Flow

If you’re like me, this month you are getting right into the swing of tax season. I’ve met with my client, completed their return and their tax return package has been mailed to them. I’ve sent them the signature form and business-reply envelope they need to authorize the e-filing of their tax return. I’ve provided them with a client invoice and a form to authorize payment of my bill by credit card. At this point, the ball is firmly in my client’s court. It is now their responsibility to return their signed e-file authorization sheets to me and pay my bill. Now, I have to wait on them. And I hate waiting.

But I have an ace up my sleeve that motivates my clients to take care of both of these issues at once: I don’t e-file their tax return until they pay my bill.

Paying My Bill
For me, this is the fun part. Boy, have I come a long way in this department. I used to be meek and mild about asking my clients to pay for their tax return – even after they had received their completed tax return package. I always sent a client invoice in the tax return package, and then waited, hoping that they wouldn’t forget to pay my bill now that they had their tax returns in-hand. Some of their invoices would languish in my accounts receivable listing for thirty, sixty, even ninety days out and more, while I waited for payment. I dreaded having to call them to ask them to please pay me soon.

7 Steps to Becoming a Super-Hero to Your Clients

I am known around the country as “the Lazy CPA”. But as many of my clients have already reminded me, I work way too hard to be called lazy. However, if there is a way to systemize, streamline and simplify something I will find it, try it and refine it! I use systems throughout my practice to help me work easier and smarter for my clients. The systems I’ve developed over the past 25 years enable me to personally complete 500 Individual and 100 Business tax returns in just five weeks and one day during tax season – and take a two-week vacation right in the middle of it. My clients are like family to me, and want to I make sure that the time I spend with them each year is valuable – to both them and to me. Here are some steps you can take right now to start the process of becoming your clients’ favorite Super-Hero.