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How to Fail in Your Tax Practice

FailMany people are intimidated when meeting with professionals such as doctors, lawyers and CPAs. While CPAs don’t see them undress, their detailed financial situation is laid out and for some can be even more uncomfortable.

So a professional with a good bedside manner (or deskside in this case) has an advantage. The ability to listen, understand, and empathize puts people at ease and forges a bond early in the relationship. The professional may also be inspired to work harder to find the best result. This bond may lead to friendship or at least the feeling of friendship, and who doesn’t need more friends?


A CPA with a natural good bedside manner

I am naturally empathic and have always connected with people on a deep level – even those I am meeting for the first time. And once I began meeting with clients directly, I knew I had found my calling. Not only was I able to satisfy my technical side, I was able to translate those technical skills into helping real people with real issues.

Clients loved me and I was very effective in developing new business and providing additional services to existing clients. So, it seemed reasonable that this gift of mine would be the key to my success when I started my own tax practice.

Business owners do not need more friends

I started my practice with no clients, no office, no staff and limited funds. We had only been in town for about two years, so my network wasn’t very deep, but I had drive and a mission. I was going to take the lessons of my previous experiences to create the perfect firm. And the perfect firm meant every client was the top priority.

Despite the odds, I got out and worked the network I had, volunteered to speak and write, and before long the clients came. I spent extra time getting to know them, their financial and tax situations, and identified exactly what services they needed. We connected and became fast friends.

Some of my friends were struggling to pay my fees, so asked if I could make concessions. Some had urgent requests and asked if I could help them out “just this one time.” Heck, I cared so much about my clients and their well-being that I began to offer lower fees, extended payment terms, rapid turnaround times and many other little “extras” that friends deserve. They were so appreciative, they referred their friends and family. I was a huge success!

Goodbye nights, weekends, and discretionary cash

Rapid growth is exhilarating. But this growth translated to work. And I was the only one working. While I enjoyed what I was doing, it wasn’t long before I was overwhelmed.

Keeping up meant working late into the night and weekends. Hardly a surprise for any startup venture, but despite the additional hours I was having difficulty meeting deadlines. And the increased hours were not increasing my productivity.

I needed help, but I was bringing in just enough to cover my bills and sometimes not even that each month. There was no money in the budget to hire staff.

A long overdue awakening

I was away for business and had been up late working the night before. I’d gotten up early trying to make a dent in my to-do list. After a couple hours of “spinning” (accountant speak for working but not seeing forward movement) I had an epiphany.

The pattern I’d created was not viable long-term and it had to stop. I couldn’t do this one more day.

The first step was to realize how it happened. I had been successful in the past. My client base grew, was profitable, and deadlines were always met. What had I been doing so differently in my own practice?

The difference was that I lacked accountability.

In my prior roles, I had to adhere to firm rules for pricing and payments. I could not offer ridiculous discounts, offer to perform work for free, or agree to delay payment while continuing to deliver the service by the agreed upon deadline. Don’t get me wrong, clients did ask for these concessions, but I had the “firm rules” behind me. This gave me the courage to say no, remain friends with my clients, and not be the bad guy.

As the owner, I set the rules and could change them as I pleased. Except I took it too far and started breaking all the rules. I bid work too low in anticipation of a client expecting a discount, even when they didn’t ask.  I used phrases like “no problem” when a client asked for a quick turnaround, even when I already had several projects on my plate. I sent a single invoice and waited for payment because I didn’t want to harass my friends about money.

Frankenstein must kill his own creation

The answer was clear: I had created this monster and I would have to be the one to stop it.

My desire to grow, build solid relationships, and create a firm where every client felt they were number one had caused me to blur the lines between helping friends and running a successful business.

And the ironic part is that my clients didn’t come to me just because I was nice, but also because I was good at what I did. They wanted to work with me and they wanted me to be successful as well as happy and healthy. Turns out they were also willing to pay me what I was worth.

I realized that I needed to sharpen my focus, not offer every service I could perform, but only those I could perform with excellence every time. I had to say goodbye to many clients, while still hoping they would remain friends. And it meant setting rules even I was not allowed to break.

This was a pivotal moment in my life and while the next few months were difficult, it was the best thing I ever did. I lost some friends, but I gained back my time, my peace of mind, and the respect of those clients who saw the courage it took for me to start saying no.

Cari Weston, CPA, CGMA, Director, Tax Practice and Ethics -- Public Accounting, Association of International Certified Professional Accountants

Fail courtesy of Shutterstock




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