Art of Accounting: Overpaying Taxes Does Not Keep Clients Up at Night, but Poor Controls Do

IMGCAP(1)]In my early days I would get many leads for clients who told me they were switching accountants because they believed they were paying “too much tax.”

However, at most of those meetings, we only spent a few minutes on taxes and then most of the time expressing concern about whether their controls were good enough!

My conclusion from these conversations is that the potential of loose controls is a major cause of keeping someone awake at night. No one stays awake at night wondering if they are paying too much tax. A pending tax audit might keep someone awake, but not paying too much tax.

There are certainly many other reasons, but weak controls seem to be an overarching concern. It is something clients cannot seem to articulate clearly. Once I realized this, it created many opportunities for me to get additional business and to service my existing clients better.

What I do now when I meet a potential client—which is almost everyone I meet—is to ask a few questions about their business to get them talking and comfortable with me as a “knowledgeable listener.” At some point I steer the conversation to controls by pointing out some “pressure points.” That invariably leads to a meeting and a new client.

I also use this knowledge with existing clients to provide a once every few years’ analysis of their business’s controls. I hesitate to use the words “internal controls” since that is part of an accountant’s language that most clients do not relate to, but “controls” they understand.

The point I want to make here is that to be effective we need to appreciate clients’ most important concerns. This comes from an understanding of their business and the stress levels and control freak nature of people in their position. With that understanding comes empathy and the ability to help them by offering solutions to what is bothering them.

It is not about what the client says—it is about the unexpressed client needs that we have to address. Understanding this creates the difference between getting that extra client or assignment, or not.

Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, published by www.CPATrendlines.com and “Managing Your Tax Season, Third Edition,” published by the AICPA. Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or emendlowitz@withum.com.