Tax pros try to build post-season client pipelines

Accounting

With the extended tax season behind us and the potential end of the COVID-19 pandemic ahead, tax professionals are looking at a potential lull in business. What are they doing right now to fill their pipelines? Do they even have to?

Pandemic relief put “a lot of work” in the pipeline for Gail Rosen, a CPA in Martinsville, New Jersey: helping clients obtain forgiveness on their Paycheck Protection Program loans; helping them understand if they qualify for the Employee Retention Credit; and planning for the best tax outcome possible given net operating losses generated due to the tax deductibility of the PPP loan.

“What ‘post-season’ pipeline? Is there a post-season?” asked Lawrence Pon, a CPA in Redwood City, California.

Though his post-season pipeline is “needed rest and sleep,” Pon expected to be busy with PPP loan forgiveness and the Employee Retention Credit. “What other surprises are we going to encounter?” he said.

How to recover

As firms rebuild from unprecedented months of financially pinched clients, remote work and filing deadlines constantly on the move, documenting their pipeline of prospective clients might help.

According to the Association of Accounting Marketing, this includes classifying prospects by stage and shows where a lead is in the sales process (for example, at the “proposal” stage or the “final” stage.) Among other tips:

  • Move leads off the pipeline as soon as they’re won or lost. These then constitute a “win/loss report,” with the win percentage calculated in terms of both dollars won and number of opportunities won.
  • Review the pipeline regularly, so that business development isn’t an afterthought. Keep reviews to 30 minutes every two weeks. Everyone on the call should be listening for areas where people need help. Mix up the review meeting: Start at the top or at the bottom, by service line or by industry, or with new or old leads.
  • Keep an eye on key performance indicators, including what percent of current revenue is on the pipeline and what the firm’s average win rate is.

Specialties also seem to help.

“I’m not building a post-season pipeline for tax prep, but am focusing on the representation side,” said Morris Armstrong, an Enrolled Agent and registered investment advisor at Armstrong Financial Strategies in Cheshire, Connecticut. “I can imagine that with the debacle of the past two seasons that more taxpayers may be receiving notices from the IRS and will be unsure what to do with them.”

Luke Sharrett/Bloomberg

“My post-season pipeline is usually those who need streamline filing under the various offshore filing procedures,” said Manasa Nadig, an EA and owner at MN Tax and Business Services and a partner at Harris Nadig in Canton, Michigan. “After a small break to refresh myself, I’ll get started on these. Of course, there’s always mid-year tax planning for my existing clients.”

Kerry Freeman, an EA at Freeman Income Tax Service in Anthem, Arizona, has partnered with a Certified Financial Planner to cross-network. “Offering each other services is just another tool to grow and expand each other’s business,” Freeman said.

What is ahead?

Of course, many tax preparers are still recovering from the season just past.

“Massive” confusion with the first quarter estimated payment and the tax deadline has added extra stress this season, Pon said: “We finished many returns before the deadline change and they were already e-filed. The direct debits were happening on April 15th with many bounced payments. Clients are upset. Of course, they blame it on us. How were we to know? Also, we did not have the many hours it takes to make the changes on the filed tax returns.”

Aside from the simplest adjustment, “I’d be hesitant in assuming that any bill from the IRS is correct,” Armstrong said. “It’s not the personnel that failed, but the systems at the IRS.”

“The last-minute tax changes and guidance on new tax regulations made this the craziest tax season ever,” Rosen said. “My staff and I kept looking at each other and laughing, in fear that if we didn’t laugh, we’d cry.”

“Our phone has been ringing off the hook this year with people looking for qualified tax professionals because their tax professional suddenly retired or became unreachable,” Rosen said.

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