Many tax practitioners focus on improving their efficiency during tax season, but there are plenty of things they can do in advance to ensure success from January to April, according to 2020 Group chairman and CEO Chris Frederiksen.

Speaking at Accounting Today’s 3rd Annual Growth & Profitability Conference, Frederiksen laid out a number of tips, best practices and strategies that tax practitioners can start putting in place now, including:

  • Make sure you have good scanners. He recommends the Fujitsu 6130, which scans 50 pages a minute, duplex, and offers despeckling and decrumpling, among other features. “You’re going to scan at the front end,” he said. “The days of having people with lots of stuff to key off, those days are over with. We scan everything at the front end.”
  • Get multiple monitors. “Go home tomorrow and buy another monitor. It’s ridiculous to have just one monitor. You’ve got to have at least two,” he said, noting that at his office, staff have three, and they’re contemplating moving to four, while a McKinsey study says that knowledge workers are most productive when they have six. He also described a portable monitor that can hook into the USB port on most laptops.
  • Software: scan, organize, populate. Make sure you’re using tools that do these things. “Clients bring in their stuff -- that’s the polite word for it -- and normally this ‘stuff’ would go to a tax preparer and they’d sort it and move it around and copy it and put yellow stickies on it and highlight it,” Frederiksen said. “No more -- now it goes to the administrative person who does the scanning. He counts the number of sheets, runs them through the scanner and makes sure the scanner sees the same number of pages. Then we upload it to [a service like 1040 Scan or GruntWorx]. They put all the documents in the correct order so they follow the organizer.” When the file is returned approximately 10 minutes later, the practitioner takes care of the miscellaneous items that the system can’t recognize. The system also takes the numbers from the source documents and populates them in the tax return. “We find it populates approximately 60 percent of the return,” he said. The services are generally priced per return.
  • Send direct mail to homeowners. Frederiksen said that he gets most of his clients from direct mail. He buys lists of all the new homeowners in his area; a number of companies provide them, but his firm uses Homeowners Marketing Services. He generally sends as many as five letters -- an introductory letter, a letter on December 1 offering a free half-hour consultation, a letter on February 1 offering a 10 percent discount if they come in before February 15, a similar letter on March 1, and a final postcard on April 1. “It’s the best two weeks in the year to get new clients,” he said.
  • Thank-you letters. These should be sent out within five days of completing a client’s return, and ask for referrals. The trick is to write them out now, before January, so they’re ready to mail during tax season, and also to include at least two business cards for the client to give out to friends and family: “You’ve got to make it easy for people to refer business to you,” he said.
  • Tax organizers. “We are big believers in tax organizers as a marketing device,” Frederiksen said. His firm sends full electronic organizers from the tax prep software, but it has also created a condensed, four-page organizer, which often helps drive referrals. Among other things, they printed up 5,000 and had them inserted in a local paper on February 1. “It wasn’t a stampede of new clients, but it certainly paid for itself, and it helped in terms of our branding,” he said.
  • Create an audit prepayments and correspondence program. As an add-on at 10 percent of your fee, or $100, offer to cover any audit, and to deal with nuisance mail. Very few clients will get audited, so it’s worth the risk. He also recommends offering new clients a guarantee on all prior returns for $350. “What are my odds that they’re going to get audited?” he asked.
  • Preschedule mail-ins. Tell clients to send information in by February 25, even if they don’t have everything ready.
  • Preschedule appointments. “You can spend a huge amount of time during tax season messing around with appointments. You end up with all of this phone tag going back and forth,” he said. Clients should be prescheduled, with a postcard that includes a map of your location. “They want to know how to find you, and what to do with their car when they get there,” Frederiksen said. You should have someone on your staff follow up the  week before and the day before.
  • Expand your capacity. Because of the shortage of skilled preparers, Frederiksen said that there will only about a third of the tax preparers available that the industry needs, so practitioners may want to start exploring outsourcing returns to India and locally through firms like Xpitax and SurePrep.

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