Meanwhile, it turns out that almost 90% of survey respondents communicate with clients by email in order to gather additional information, further separating the preparer from the information gathering source, the client. There is still some hope as less than 15% of preparers have resorted to delivering tax organizers electronically.
My question here is, how do you handle those elderly clients, who control the vast portion of the wealth in the country, and who are almost universally technologically handicapped?
Or, if you are mass marketing to high turnover, low margin taxpayers (read that as rapid refund types), how do you stay in touch with folks who can’t afford a computer, or who totally rely on their smart phone, and don’t even have a laptop?
I personally think that if tax preparation by a professional is required, it needs to include an in-person interview each and every year. No drop off or email of source information, no email or mail delivery, no online service and no emailed organizers. Automation should be an assist, not a replacement.
I’ve had this conversation on and off for years now with members of my Practice Builder Publishing private coaching group, and it seems I was considered out of touch. At least that was until it turns out that higher end, and more profitable clients, began to express a preference for the personal attention to detail that an in-person interview gives, and are willing to pay for the comfort that the extra attention gives them.
Most preparers are lured by the appearance of ease that automation gives them.
And, as they are lured into this fools paradise, they feel that the reduction in labor will allow them to maintain price competitiveness, not realizing that they are turning their practices into tax return factories along the model of H&R Block and Jackson-Hewitt.Most preparers are lured by the appearance of ease that automation gives them. Click To Tweet
Our discussions of the effect on fees skip blithely over the fact that average return fees of today have only increased 25% over my personal average fees in the middle of my tax preparation days of 1989! Members response, ‘Oh, but we’re doing so many more returns that we’re making more money.’
And then there’s risk.
It is impossible to be totally risk free in this line of work, but not holding a full and thorough interview with a client about their financial affairs is pretty risky. A client may not recognize the importance of a question as it is presented in the tax organizer, but may respond more fully to an open ended question during your interview.
Don’t get me wrong, the days of manual preparation of paper returns are gone. The IRS has swallowed the pill completely and is shifting the responsibility for technical compliance out to the industry, wheter it is a practitioner, or a software package, the IRS is automating as much of the process as possible, as a cost savings process.
And the key point in the IRS decision, it is a cost savings.
Which is how you should look at automation, as a cost savings, but not a way to keep your fees competitive.
You are in a knowledge based business and relying on automation to replace your brain function does just that.
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Best to you and yours,
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