trends in billing...6/10/2015 1 trends in billing everyone wants to know what others are charging....

6/10/2015

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Trends In BillingEVERYONE WANTS TO KNOW WHAT OTHERS ARE CHARGING.

Timothy J. Sundstrom, CPA, CFP

• Co‐founder of Wealthcare Financial Group, LLC.

• A small tax and financial planning firm located in Broomall, PA

• Former President of the Pennsylvania Society of Public Accountants

• For the last 11 years a tax lecturer with Gear UP Tax Seminars speaking on the topics of:

• Personal and Business Taxes

• Social Security

• Healthcare Reform

• Business Planning

Young Couple Purchases Home – Wage Earners, Some Interest & Dividends

Individual Return

Chapter # Lowest Highest Average

Buxmont 48 $ 65 $ 425 $ 244

Central 13 $ 75 $ 325 $ 163 Lehigh Valley 37 $ 95 $ 375 $ 206

Northeast 15 $ 65 $ 425 $ 174

Tri County 26 $ 100 $ 500 $ 265

South Central 25 $ 100 $ 325 $ 204

South East 4 $ 140 $ 375 $ 251

West Central 2 $ 100 $ 125 $ 113 Western PA 19 $ 60 $ 350 $ 186

189

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Originally I wanted the Quick Fix.

What I found Was This!

•We are not all the same even though we use the same terms.

•We do accounting!

•Does that mean that you do

•Write‐ Up

•Business Process Outsourcing

•Virtual Controller/ CFO•Advising •Financial reporting

What I found Was This!

•Strategy• I needed to change my thinking about the business.

• I needed to embrace more technology

•Get out of my comfort zone.

•Tactics•Define service better

•Change my collection habits

•And give up control to staff

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Disruption

Technology

Attitudes

More Options

Disruption

* Source- IR-2014-28

Disruption


From 2013 to 2014 the# of self prepared returns

grew by 5.8*

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Disruption


From 2013 to 2014 thePreparer Returns were down by

2.2%*

Disruption


70% of all taxpayers are eligible to use free software!

The Message

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Doing taxes together looks like this

OUR RETURN IS EASY!

Expect These Changes to Accelerate

Law of Accelerating Returns‐ the rate of change in a wide variety of evolutionary systems tends to increase exponentially.

‐Futurist and inventor – Ray Kuzweil speaking on artificial intelligence

What to Expect

•Financial Planners giving away returns as a loss leader to get investment assets.

•Further integration with between online “Robo” brokers and on‐line tax preparation.

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Artificial Intelligence

Its not about Jeopardy

• Its about Analytics

•Understanding Language

•And solving problems people care about

Its not about Jeopardy

• Its about Analytics‐ The Power of Habit‐Charles Duhigg talks about Target being able to tell when a woman is pregnant by her buying habits.

•Understanding Language‐We want the machine to communicate with people.

•And solving problems people care about‐Like how to sell people more stuff.

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You Will Question Your Value When

•Clients act like they are doing you a favor since their return is so easy.

•You break your butt on a return only to have the client object to the fee.

•And you start asking your self questions such as what does H&R charge.

Perception

•If one alternative is as good as an other you have a commodity.

Sometimes Its Easier to See in Other Industries

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Sometimes Its Easier to See in Other Industries

Founded in 1950 by William Rosenburg in Quincy , Massachusetts

11,000 stores in 33 Countries

Founded in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker

21,536 Countries in 64 Countries

Who Delivers a Better Experience

Dunkin Starbucks

$5.5 Billion 2010 Revenue 10.71 Billion

$32,307 Sales Per Emp. $78,156

$1.60 Small Coffee $1.96

Forbes – April 24, 2014

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So Getting Back to Accountants

•Standards are tough to come by

•Differing Entity types‐ Different compensation.

•Standard Rates•Some firms charge high rates but have low realizations.

•Others charge lower rates but have high realizations

So Getting Back to US

•When you value yourself against everyone else, You assume deliver the same service the same way.

Same Service

Same Way Commodity

Myth‐We are all the same

•We all do differing things in differing ways

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So Getting Back to US

•Great Book

•Billing What You Are Worth• ‐David W Cottle

•AICPA

Why Do a Lot of Accountants Hate H&R So Much?

They are great at conveying their value!

1 Billion Left Unclaimed$500 per Seat

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Why do a lot of accountants hate H&R so much?

We are the experts.

No one does more returns than us.

We will answer questions on how your return was

prepared.

We hate them because they are great at conveying value

Divide 1 Billion by 128 Million Taxpayers you get$7.81.

H&R BLOCK EXPERIENCE

The Preparer No prior experience required just a willingness to learn. 84 hour training program. Starting wages $10 to $13 hour.

Pricing Base return $125 plus $45 for state. Prices based on forms. Taxpayers often shocked by price.

Access Great during tax season. Many offices close outside of tax season.

If You Receive a Notice

You need to set an appointment, bring in your notice and return.

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The H&R Reality is there is an additional charge for just about everything.

So How Do You Convey Value?

So How Do You Convey the Value?

Biggest Lies Ever Told (To Ones Self)

•My clients understand my value, I don’t need to tell them it.

•Truth: In our business is extremely difficult to tell a properly prepared return from one that is incorrect. Most taxpayers judge value on “how much am I getting back”.

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SERVICE POORLY DEFINED

•A lot of small practitioners bill the client once a year for a tax return.

• In Reality they provide:

• A thorough review and interview to insure not deductions are missed.

• Year round quick question phone and email support.

• Notice Protection.

• Liaison with other professionals.

• Therapy‐”Don’t take the money out of your 401(k).”

SCOPE CREEP

•The engagement is to prepare a tax return.

•But Staff spend extra time compiling receipts or doing bookkeeping.

So what is the value of a Service?

•Client’s perception of value•You can’t sell Rolex to Timex customers.

•Everyone expects “quality” and its tough to judge a tax preparer’s quality.

•Internet = More options and Now!•Tax season is on their schedule not yours.

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How Well Are You Conveying Value?

High Value/ Low Price‐• Overflow of work• Growing client base• Always get the new client• Keeping clients.• No one ever complains

about a bill.• Trouble paying bills

High Value/ High Price• Growing high end clients• Expertise in demand• Retain clients• Client losses are do to price.

LowValue/ Low Price• Always getting new clients• High turnover in the client

base.• Low client satisfaction –

Complaints.• Large level of notices.

LowValue/ High Price• Demand for services is

decreasing.• Unable to replace client losses• Complaints concerning price,

time and quality.

Client Perception

What is Your Map of the World?


Is it filled with

wealthy individuals?

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Is it filled with


Or is this the last client I will ever get?


Is it filled with


Is this the last client

that you will ever see?

My Clients will never do this!


Is it filled with





I tried this once!

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Is it filled with





I tried this once!

I can’t do that! What will my clients think


You wouldn’t worry about what others think if you realized how seldom they do.‐ Eleanor Roosevelt

Change is Coming

• If you have to change you might as well create business that you like.

• If your not motivated you will not change‐because with any change there will be pain.

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Change is Coming



Change is Coming



•GIVE YOURSELF A REWARD!

I am Guilty!

Always too busy

Working in the

business rather than in

it.

Worrying about what others think?

Looking for the Quick Fix.

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Human’s Greatest Fears

•Uncertainty‐ Some folks worry about the worst case scenario, no matter how remote.

•Change‐ People will continue to do things that they hate even though they express the desire for change.

•Too busy to change

SURGEONMEDICAL EXAMINER

If You Were Sick Which Doctor Would You Choose?

PLANNER TAX PREPARER

Which one are you in your business?

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WHAT I LIKE

• Planning

• Teaching

• Love the learning opportunities it affords.

• Done anywhere in the world.

• You work hard during the cold part of the year.

• Attract Millennials

WHAT I DON’T

•Clients who do not value what I do.

•Disorganized Clients

•Free consulting‐everyone pays to meet.

Tim’s Ideal Business

WHAT I LIKE

• Planning

• Teaching

• Love the learning opportunities it affords.

• Done anywhere in the world.

• You work hard during the cold part of the year.

• Attract Millennials

WHAT I DON’T

•Clients who do not value what I do.

•Disorganized Clients

•Free consulting‐everyone pays to meet.

Tim’s Ideal Business

Planner not Preparer!

• Need to Work on the Business not In It.

• First 2 Hours a Day and Friday(when Carina is not Off)

Cliff Jumping

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Cliff Jumping

Give up the time sheet and move into higher value services.‐Succession Planning‐Mergers and Acquisitions

Getting Better Results


Wilfried Fritz ParetoBorn: July 15, 1848 Died : August 19, 1923Italian engineer, sociologist, economist and philosopher.

Observed that 80% of the land was controlled by 20% of the population.

Pareto efficiency: 80/20 Rule

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The Application

• 80% of a company's profits come from 20% of its customers.

• 80% of a company's complaints come from 20% of its customers.

• 80% of a company's profits come from 20% of the time its staff spend.

• 80% of a company's sales come from 20% of its products.

• 80% of a company's sales are made by 20% of its sales staff.


• Who are your top 20% of clients?

• What industries are they in?

• How much more time would you have if you gave up the 20% that:• Cause you the most

issues• Argue with staff• Fail to pay on a timely

basis.

How Do You Get the Perfect Rose Garden

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Better Results

•Who are your Top 20%?

•Give them the “Chairman” Treatment

•First option on new services

•First appointments

•Express services

Better Results

•Bottom 20%‐ The troublemakers.

•Want everything for nothing.

•Slow pay or no pay.

•Noncompliant‐ fail to file on timely basis.

•A bad client for you might be a great client to someone who is new to the business

My Results

• Re‐emphasizing my original mission to provide planning services to my top 20% business clients.

• Delegate everyone one else!

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What’s the Price?

Its between $200 and $7 Gs. You will find out when you pick it up.


•You can’t quote a price for a mechanical contractor’s return!


•You can’t quote a price for a mechanical contractors return!

•Yet that contractor is required to produce a down to the dollar bid on multi‐million dollar HVAC system.

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•You can’t quote a price for a mechanical contractors return!

•Yet that contractor is required to produce a down to the dollar bid on multi‐million dollar HVAC systems.

•The difference the contractor has an upfront agreement.


•The difference is:•The contractor analyzes the job up front.

•There are clear specifications as to what is included.

•There are timelines for both for the contractor and the customer.

•Deviations from the contract or changes in scope lead to additional charges.

Trends – Fixed Price/Quoted Upfront

•The Upfront‐ Analyze the client and time spent based on prior years return.

•The time to do this is now.

•Client signs an agreement to the price and agrees to:

•Fill out a questionnaire/ checklist.

•Timelines for delivering the information and responding to questions clearly defined.

•Additional charges for Scope Creep

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Trends – Fixed Price/Quoted Upfront

•Allows clients to pay for the services upfront.

•Eliminates the billing and related receivable issues.

• Improved Cash Flow

•Eliminate write‐offs and collection Costs

•Dave Krebs‐ “Negative” Accounts Receivable.

“Get a Deposit/Retainer”‐ Joe Calvo

•At a minimum 50% of the projected fee.

•Engagement letter states the deposit is earned when work begins.

•Deposit/Retainer is deemed earned after 60 days.

•Eliminates:

•Client back outs

•The eternal extension clients.

Free Consults‐ No Way

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Think Weekly or Monthly Not Annually

Its easier to budget for a smaller monthly payment than a large one time payment!• Use estimated fees• Review semi‐annually

Give Clients Payment Options

•Credit/Debit Cards‐fees vary depending on the card.

•ACH Withdraws‐Can be done for as little as 50 cents a draft.

ACH‐ Payroll Services Do It So Can You

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ACH‐ Payroll Services Do It So Can You

• Disclaimer‐ We are currently using Intuit’s Quickbooks Payments. We are waiting on the New “Office Tools Professional” portal release.

• We are not currently processing ACH payments but are in the process of getting the agreements.

• Qb Payments allows you to accept both Credit Cards and ACH.

• While you can have a recurring credit card charge Intuit does not allow for an automatic recurring ACH payment.

Motivation – Pain or Pleasure

•Gets the client out of pain‐ Offer‐in‐Compromise.

•Provides Pleasure:•Planning that produces an extra $4,000 per year.

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How much are you willing to pay to:

•Get you out of $100,000 in tax debt?

•Save $4,000 annually in taxes?

•be hands free so that you can run your business worry free?

The Value of Packaging

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After You Agree to Buy Then the Special Offers Kick In.

After You Agree to Buy Then the Special Offers Kick In.

This is something that Psychologist call a “Yes” set. People are more likely to say “yes” to you after they have already agreed to something else.

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Pricing Varies? Majority of pricing mistakes are the result of underpricing, not overpricing.

Make sure you understanding what you selling/buying.

The Entire Package is yours for $650!

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What if the client objects to the price?


What if the client objects to the price?

Well Jim, what

options are not

necessary?


Oddly, having a form eliminates many questions concerning how you arrived

at the price.

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Building Value

•Guarantees – (conditions apply).

•Become the expert:• talks to local business groups such as realtors.•Newsletters targeted to a group.• Separate website for the targeted group.•Radio and internet radio.

• Special client benefits:•Reduced fees on new services•Client events•Become a referral source for your clients

Stop Talking and Begin Listening‐Carina Sundstrom

•What if you took your 5 best client out for lunch and asked them what they are trying to accomplish.

•Shut up and Listen‐

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•What if you took your best client out for lunch and asked them what they are trying to accomplish.


What keeps you up at night.

What is your

perfect world?


•What if you took your best client out for lunch and asked them what they are trying to accomplish.


What keeps you up at night.

What is your

perfect world?

Converting Current Clients to New System

•Historically under‐charged clients:

•Review the account with client‐ invoice should indicate full billing . less discount.

•Delegate the client to a staff person

•Refer them to another accountant/preparer.Dear Jim:

It has been a pleasure being your accountant for the last 5 years. My business has been under ever increasing government regulation. You may not realize this but the time spent on your return has dramatically in the last year because of the Affordable Care Act. Charges for returns such as yours are now exceeding $950. Because of our long term relationship, we are proposing a fee of $750 for return. In addition, as an additional discount your price will include our full notice and audit protection.

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Sources For Change

•Gear Up’s Practice Management Course‐taught by David Krebs.

•Course includes 10 Secrets to a successful tax and accounting practice.

•There is an interactive Forms CD for an additional $74.25

Taxcoachsoftware.com

• Plan English tax planner

• Weekly member calls

• Marketing Materials

• Seminars for clients All for $89 per month!

CPAMarketingGenius.com

•Salim Omar CPA

•Referral program $197

•On going coaching starting at $97 per month

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Great Reads

•E‐myth Revisited‐Michael Gerber

•Bill What Your Worth‐ David W. Cottle

•The Power of Focus‐ Canfield, Hansen, Hewitt

•Million Dollar Consulting‐ Alan Weiss

•Let’s Get Real or Let’s Not Plan‐Mahan Khalsa and Randy Illig.

Getting Back to Watson


Ultimately, we all need to embrace technology or retire.

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It may be smarter than us.

Ultimately it does not have a soul and does not necessarily care for those who do.

Win More Games.


It may be smarter than us.

Ultimately it does not have a soul and does not necessarily care for those who do.

Win More Games.

That is the difference!

On the Behalf Of Myself and PSTAP

trends in billing...6/10/2015 1 trends in billing everyone wants to know what others are charging....

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