A firm’s profitability is frequently defined in billing more per hour or completing more work per hour. While the 280TaxBreak team is working on a time machine, we’re currently all given the same 24 hours. Growing the revenue per hour is the key, and one means is Tax Advisory. We’ll show how Augusta can be a bridge to Tax Advisory.
Tax Advisory as a Destination
If your firm is new, old, or growing and you’re not currently offering Tax Advisory services, I implore you to consider it for your firm. How does a change from tax preparation to advisory help your business? It’s more profitable, but that’s worthy of a long post alone. Your customer retention rate typically goes up with Tax Advisory. Your billable hourly rate tends to go UP. The billing cadence changes and becomes more frequent vs. once a year, either quarterly or monthly bills roll in and they’re bigger than bookkeeping bills!
The Long Route to Transition-
So, how does my firm go from just tax preparation to tax advisory? These changes don’t occur overnight and like all good things, take time.
The knowledge of tax reduction plans is a key part and education is key. Pursuing higher-end certifications such as CPA, CFP, or other professional designations will help provide the background education and credibility for your client. Acquiring licenses for life insurance or securities products will help your firm diversify the products and offerings, as part of Tax Advisory. And, if one chooses, there are tax advisory software suites and consultation services.
All of these are good steps, and the mandatory steps to transition from Tax Preparation only to Tax Advisory; however, there’s one bridge that’s short, fast, and profitable and gets your firm towards these higher-end services. What’s this magic? Let me show you how Augusta is a bridge to full-fledged Tax Advisory.
The Short Bridge to Higher Profits-
Augusta rule solutions, in our opinion, act as a bridge to full-fledged Tax Advisory. Why is this? As a deduction and as a process, it’s bringing your clients habitually and billing closer to advisory. Clients now can be billed monthly, not just annually for this service. Clients will seek your advice and expertise on Augusta, making you the subject matter expert and prepping your clients for advisory services.
This deduction requires the client to update and document their meetings, making actions required on their part to complete the advisory process. If other tax deductions are planned, or other services like setting up a SEP IRA or other deductible events, clients need to participate. Augusta is a short bridge, because it doesn’t require much training, to get you and your clients closer to advisory.
An Example of Profits-
Jane, an EA, just became familiar with 280TaxBreak.com and currently provides tax preparation for about 400 clients. Jane also does bookkeeping and tax preparation for about 50 business clients. Jane got excited (and you should be Jane, it’s a GREAT choice!), and signed up for 280TaxBreak.com on our medium-sized plan. Jane began training and once familiar with the details of Augusta in a couple of hours, she decided to set this as a new service and began talking to her business clients.
Jane did a group Email for her S and C-Corp clients and of the 50 clients, 10 decided to sign up immediately. Another ten showed interest in the next year, but back to this tax year. Jane decided to charge $600 per Augusta-rule deduction preparation, billed monthly at $50/client/month. Now Jane is getting $500 per month or $6,000 a year, for preparing Augusta-rule deductions for her ten new Augusta cases.
Jane took an hour for her first Augusta filing but once she got the steps down, subsequent cases took just 15 minutes each.
How much did Jane earn per hour for bringing Augusta to her firm?
- Income-
- $6,000 in Gross Income (10x Business Augusta Cases @ $600/ea.)
- -$889 in Cost through the Mid-sized plan
- $5,111 in Net Profits
- Time Investment-
- Initial Training Time for Jane-2 Hrs. (this is a one-time thing)
- 1st Case was a little tough and took 1 Hr.
- 2nd Through 10th Cases-15 Minutes Ea., or 2.25 Hours total
- All cases took Jane 5.25 Hours to Complete from training to completion
That’s an Hourly Income of $973.52 per hour for Jane’s work
Not too shabby Jane! None of this is outlandish pricing (you could go a bit higher), or too short of an estimate for the time involved. We have firms preparing Augusta-rule deductions in 15 minutes from junior staff. We design the system so that you’re the subject matter expert and the business owner client does all the data entry, saving your time while making this process smooth.
Now, Jane wants to do Augusta all day and with the additional time and income, Jane fired some of her most problematic and time consuming clients. Jane is now one HAPPY EA with more income, and more time because those bad clients took hours.
Sorry, But I Already Provide Tax Advisory-
If you are providing Tax advisory GREAT! I’m sure you’re already familiar with the profitability of Tax Advisory, so why would one partner with 280TaxBreak.com?
We’re a unified, streamlined, Augusta-documenting machine. Maybe you have a collection of files, spreadsheets, and other ‘solutions’. Ask yourself-if you are responding to an audit tomorrow, do you have the backup documentation to verify the fair market lease value? Do you have the meeting notes from the business owner in 14 different Emails? Did missing one of those Emails turns into a giant IT-enabled search or restoring that Email? Would it take you minutes or hours to prepare the backup documentation, notes, and dates to have that audit be successful or is it already at hand, ready to supply to an auditor?
Our service provides a low-cost solution for tax advisory firms to organize, grow, and streamline their advisory service, which is why we believe doing one thing, and doing it well, is the formula for success for firms.