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Revealed: Competitive Insight into Tax Preparers’ Minds

When you get new clients with higher fee rates; when they turn in their source documents early and you also have a nice paperless office system to automatically manage those documents, the net result is that you have a firm exactly like the one you always wanted to create.

That’s when reality sets in: regular time with family, healthy meals every day and seeing daylight, weather permitting.

Have you been chasing this dream for long?

See how these surprising responses from people just like you give you an intelligent insight into your own tax preparation business…..

About The Poll:

  1. Pransform had published a quick poll for CPAs and Enrolled Agents – the key question being “What Do You Want THE MOST in Next Tax Season?

  2. Votes till November 15, 2012 are considered for evaluation of the results. This poll garnered the highest number of votes making it the most popular of any LinkedIn polls containing the subject word “CPA” or “Tax”.

  1. Respondents were asked to pick just one choice from the five options (and these five options were derived from an informal chat with several CPAs and Tax Preparers).

  2. To the extent details were available in the voters’ LinkedIn profiles, LinkedIn makes the demographics of the voters available. Given that not all voters’ details were available (demographics such as age, gender, seniority etc. were available for about 45% of voters), the conclusions are derived by extrapolating the available information.

  3. The results may not represent the industry’s thoughts, as the number of voters cannot be considered as a fairly representative sample. Yet, it helped to get an insight from the relevant people from the accounting and tax industry.

  4. Choices made available and rationale behind the choices: ChoiceRationaleFamily, Healthy Meals & Seeing DaylightThis is a fundamental human behavior based choice, reflecting the core “wants”New Clients, New Clients, New ClientsThis again is related to human aspirationsHigher Rates (& Less Fee Pressures)This is a tactical and strategic question aimed at uncovering the real on ground issuesPaperless Office with Client PortalsThis is tactical question aimed at knowing how much people think automation will help themClients Turning in Source Documents EarlyThis is a tactical as well as core human issue as stress emerges from delays in tax season

The Results:

These were the results of the poll. Coupling behavior science fundamentals with empirical experiences, these results bring out some key insights as are explained below:


  1. Response : Family, Healthy Meals & Seeing Daylight (22%)

Tax seasons have been taxing. For the CPAs, staff and tax preparers alike.

And people want “better life during tax season”. More balanced. More life.

Not surprising. You would take it any day, isn’t it?

Takeaway: You need systems in place; you need capable help to get you out of office during tax season. Prepare now.

  1. Response: New Clients, New Clients, New Clients (32%)

No wonder this is the topmost choice of 30% voters because this reflects the topmost concern# of firms of all sizes (# source: AICPA survey results).

Why? It is the innate human desire to progress; grow and make life better, for self and near and dear ones.

Notice the “cause” underlying this response? Getting new clients is just the manifestation of the underlying desire to progress.

Call it dreams! You too have it, isn’t it?

Takeaway: It means more competition for you. It’s the same cake that everyone wants a bigger pie of. The size of your pie will depend on your competitiveness.

  1. Response: Higher Rates (& Less Fee Pressures) (12%)

Surprisingly, only 10% respondents feel the need for higher rates and lesser fee pressures.

It suggests twin insights.

A – Clients seem to be loyal. Margins seem to be good enough. Rates seem to be well accepted by clients.

B – There are no real competitive fee pressures in the market.

And this result suggests one key underlying cause i.e. the “quality time for self” desire. Firms do not seem to be pushing too aggressively to get more clients through price competitions – as it would simply increase the pressures and workloads, resulting in lesser quality of life.

Contrast this with the most wanted thing – new clients. While most tax preparers want new clients, not many are willing to compromise their work-life balance to achieve what they want.

Most firms seem to want quality clients. You too want quality clients.

Takeaway: Pricing may not put pressure on you. In other words, you may not need to lower your prices fearing your competition. It’s the “poaching” of your pie that can hurt you. And that’s competition for you! Get ready!! Your unique selling points (USPs) may be the USPs of your competitors too. May be, in addition to filing their tax returns in time, you want to give away one critical financial insight to each of your clients. Think additional value.

  1. Response: Paperless Office with Client Portal (7%)

This is another surprise.

According to several industry surveys, about 30-35% firms have client portals in place (most people confuse a simple file transfer portal as client portal).

True client portals can be very powerful in reducing your costs, improving your firm’s productivity and helping you add more to bottom line profits. Yet, very few respondents voted for this choice.

One of the key observations on this response suggests what sounds like a cliché’ i.e. people are resistant to change. It also suggests that most client portals actually add to work, because its not automated enough and clients do not send scanned documents in most cases.

The tax season processes which have been working well (?) with paper for years – why change them?

Takeaway: Here is an opportunity for you. Go for a more productive and effective office; let technology be your advantage and you will be ahead of the competition. Leverage technology now. Be the leader.

  1. Response: Clients Turning in Source Documents Early (26%)

Is this a “tactical” hope?

Why is it “just a hope”?

Because, it’s a wish that has remained mostly unfulfilled over the years.

Some firms have taken initiatives to “prompt” clients to change their behavior. Yet, when clients know the deadline dates, it’s a natural human tendency to “do it when its needed” that takes over and that creates immense pressure for you in April.

There are many good articles on the web that suggest a few ways to make your clients to send you source documents early.

But it’s a challenging task. Because it involves your ability to influence a change in behavior. And two of the biggest influencers that work are:

a) Fear b) Greed

Fear, in case of tax returns filing, is just the deadline date (and consequential penalty). And since everyone knows it’s in April, it’s difficult to influence people in January and February by using fear as the change agent.

That means you will need to see how greed can help you change client behavior. It helps you. Because if they turn in documents early, you have the most sought after benefit i.e. better quality of life during tax season.

So how will you “flame” the greed? It is a tactical effort. You must touch the clients somehow.

Takeaway: With smartphones and tablets selling like food, almost like a necessity, more people are consuming information and managing relationships and communications on such devices. Text messages are a key to prompt people. You can prompt them faster with text messages but will they act on such prompts without any incentive from you? And there are service providers that charge you as little as 1 cent per text message!

OVERALL Takeaway: Players in the tax preparation market may be focused short-term. A 5% more effort and investment in client and marketing communication systems can help you get what you want for the next tax season.

Your Thoughts Please:

Do you think the poll results reflect your thoughts, partially, fully? Please leave your comments below.

Disclaimer: The poll, the rationale behind the questions, interpretation of the results and takeaways are derived, written and expressed according to the experiences, knowledge and wisdom of the author/s and do not represent any recommendations or statements of facts. Any and all actions taken by you, if any, and consequences thereof, if any, based on the findings of this poll and takeaways will be your sole responsibility.

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