Despite often being considered the bread and butter for accountancy firms, the value you as an accountant offer your clients by completing their tax returns should not be understated, and therefore the service you offer should not be undervalued.
For many accountants, the filing of tax returns is a practice that remains largely unchanged, despite huge digital transformation in other sectors of the industry. While the introduction of making tax digital (MTD) for VAT returns has transformed this sector of the tax industry, self-assessment tax returns remain an arduous task at the end of the tax year that accountants must endure on behalf of their clients.
Despite often being considered the bread and butter for accountancy firms, the value you as an accountant offer your clients by completing their tax returns should not be understated, and therefore the service you offer should not be undervalued.
It can, however, be difficult to sell this value to your clients, and it is especially difficult to persuade your clients that you should be paid more for this service than what you have traditionally charged. But times change, and as you adapt your practice to the modern world, you should also be adapting what you charge your clients for your services.
Speaking during SmartVault’s webinar titled ‘How to price tax returns for maximum reward’, Jane Aylwin, author of ‘How to Build a Successful Bookkeeping Business’ discussed the importance of pricing your tax return service to be suitably valuable for your practice.
Aylwin said: “One of my biggest issues with tax returns was that I had under-priced it. It was a cheap service that I did as an add on and I always did at the last minute. It’s very difficult to turn around to your clients and sell that value to people who you have always charged the same amount for the service. I had a real change of mindset around tax returns.”
A poll during the recent SmartVault webinar asked attendees what their greatest challenges were when filing their client’s tax returns, with the following results:
Clients submitting information late is something that may never improve without incentivisation, and you can increase what you charge to improve the income that you generate from the task. To do so, you must demonstrate your value to your clients, and also incentivise them to send records early.
Aylwin advises that the first step in the process is to write a letter to your clients, that explains the increase in prices, explains the value that you offer them, and that productises your services.
“I would never suggest that you write to your clients to increase your prices,” she said. “I would always suggest you hold a pricing meeting. However, with tax returns, you’ve got to be aware that there is a reasonable chance that you might lose your clients when you try to re-price your tax returns.
“In most cases, those clients are not worth keeping. When you are pricing, I insist that you have a meeting with your client and that you sell your value.
“With tax returns, this is probably a waste of time. Sometimes you must accept that people don’t value what you do. For all my valuable clients, I wrote a letter and a short brochure to productise the service.”
Aylwin suggests not only laying out your new charges in the letter, but also incentivising your clients to submit the necessary records early by giving them a percentage discount on your services if they do so. If you have increased your fees by 20% but offer a similar discount if they submit their records early, then you are giving them the chance to avoid a price increase by complying with a deadline, that also makes your job easier.
By productising your services, you give your clients a pricing option, and the letter that you send to your clients should explain the different levels of service. Aylwin suggests three levels of service: essential, comprehensive and premium, and to explain the different levels of service in the letter.
While there is a risk of losing clients, this might be beneficial in the long run. If the more proactive clients are happy with the increase in charges, you will save yourself time by shedding those that cost you and your practice time by either being unorganised or late.
To add value to your range of services and to justify an increase in charges, Aylwin recommends offering a premium service to your clients as part of your practice’s available offerings. To do so, she says that you should not be afraid to partner with others in order to expand your offering.
“There is nothing stopping you partnering, or working with other experts. Many will not be comfortable or qualified to offer the things that I would suggest you add into your premium service. Partner. Go and find yourself an accountant that you can work with, so don’t necessarily feel that you are completely restricted to what you can personally do.
“There are many ways to broaden the services you are able to deliver without going against what your governing body or your level or qualification says, so I really encourage you to think outside of the box so that you are in a position to service your clients.”
In addition to the more typical services you may offer as an accountant, Aylwin suggests you also include the following as part of a premium service:
“You can do so much, provided you are prepared to think a little bit outside the box, and not be restricted by what you personally can deliver, and as long as you can build partnerships from which you can mutually benefit,” Aylwin said.
One way to ease the burden of managing your client’s tax returns is through automation and software. Automation offers another area in which you can add value to your clients, explaining that you are using specialist software to manage their returns and to stay on top of the tax return process.
Software also makes your job easier, giving you a single, digital place where you can keep track of which stage your clients are in the tax return process. Many also enable you to send automated reminder and organiser emails to your clients, and then track their responses to your requests.
When you find the right software for your practice, it can be as good as finding a partner to expand your offering. While it does not allow you to offer services you may not be qualified or licensed to practice, software automation does make the more arduous tasks less time consuming, freeing you up to focus on more profitable exercises.
SmartVault, along with many others, offers this level of automation that can benefit both your practice and your clients. For example, SmartVault allows you to send bulk organisers to your clients, which you can use to remind your clients of your tax return deadlines, and even detail your product offering and pricing. You can also use it to track responses to your reminder emails through the software, and send out the final tax returns once they have finally been completed.
Adding such software to your practice will not only save you time, but create further value to your clients.
For more information about SmartVault, visit www.smartvault.com, and to view the Webinar hosted by Jane Aylwin, register here.
