How to Increase Profits in Your Small Tax Practice
Tax season is right around the corner again, which means it’s about that time when tax firms make their highest profit margins. For those who primarily focus on the preparation and filing of taxes for their clients, using the first quarter of the year can be a difficult measure of the year’s predicted revenue. While business-filers will need to file multiple times throughout the year, individuals won’t need servicing until the year’s end. So, if you’re running a tax practice, how could you possibly increase your profit margins?
By taking initiative and implementing the right changes, you can begin increasing profits with a few simple steps. Not sure where to begin? Let’s walk you through our tried and true tips.
Expand Your Services
While filing taxes may be the foundation of your company, there are many other related services that you could offer to clients new and old. These may include:
- Tax planning
All these financial services are incredibly important facets to any business of any size. Generally speaking, your business clients will rake in more money than your individual clients, so play to their interests and needs by offering the many services they’ll need every business quarter.
Optimize Productivity and Efficiency
Regardless of whether you already have a healthy client base or you’re focusing your efforts on growing your clientele, implementing certain software programs that aim to increase efficiency is key. For a tax firm or any business entity that deals with finance, numbers are crucial and incredibly important to get correct. Using an intelligent software system that assists with plugging in accurate data and keeping track of customers is essential.
From cloud based tax software for accountants to payroll solutions for big businesses, stocking up your company computers with valuable software will transform the landscape of your business in an instant. After all, this is the modern age—if there’s an app for streamlining the tasks on your to-do list why not stock up?
The best software for your firm will better enable you to file returns faster, transfer data more effectively, reduce rates of error, and update client information with the highest security. By simplifying your business operations, you and your employees can complete more returns, thereby increasing revenue and profit margins.
Revamp Your Marketing Efforts
It’s always a wise idea to review and improve upon your marketing strategy. If you’re looking to build your clientele list, one of the easiest ways is to begin by marketing to the right people. Not only is regularly reevaluating and refining your marketing efforts highly beneficial to your customers, but it’s wonderful for tackling your business goals. The bigger the pool, the better.
Begin your revamp by first developing a clear brand voice. Why should people choose your practice? What makes you the best in the city? Advertise well and you’ll quickly see your efforts convert. A thoughtful and calculated marketing plan will allow you to increase the effectiveness of your budget and generate greater profits in the long-run.
While there is no need to encourage individual clients to purchase services they don’t need, it may be more useful to upsell business clients on services that may give them better insight into their financial status. For example, if one of your veteran clients needs some long-term financial planning advice that they have already counted on you for, they may be interested in purchasing your official financial planning services.
Choose Clients Wisely
The age-old saying that beggars can’t be choosers is one that can, and should, easily apply to your tax practice. Instead of depending on the quantity of clients, focus more on the quality. Is your client making you enough money? Which clients cost more money to service than the money they bring in? These are important questions to ask if you’re looking to seriously optimize your profits.
The truth of the matter is that some clients are downright irresponsible and disorganized and end up being a waste of time rather than an asset to your business Choose your clients wisely to ensure you end up with a list of people and businesses that keep you in business, too.
Did we miss anything? What are your secrets to increasing profits at your small tax practice? Let us know in the comments below!