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The Dos and Don’ts of Charging for a Tax Return

I just talked to a client of mine, $500,000 in accounts receivable. Staggering. And it’s interesting because I was basically going through all the things that we can do right now to be able to make a difference. It’s March 3rd. Sometimes people come to these revelations where they’re like, “I do have $500,000 in accounts receivable, but I also have a ton of people coming in for business returns, Schedule C’s, 1040s, and they just want the tax prep. Andrew, they’re not coming in for planning or they’re my existing clients.” Right? They don’t want to have fees, increased fees, or we’ve always billed when we complete the tax return. So again, we send the client their tax return, they review it, then we file it.

Then we’re charging for a tax return by sending the invoice. Sound familiar? Not good, not good. And if you don’t want to be a horror story, you don’t want to end up with $500,000 in AR here. Here’s a couple things I told this individual. And this honestly was just a game changer. Now I’m not going to show this entire document. You can see, I got this whole document here of all these things I went through. I’m just going to share with you some of the summary items. These are very, very powerful. So, I said, “Every single person you talk to, I want you to collect 50% now, 50% after either 30 days or when you follow the return, whichever is sooner.”

I want you to get control of the payment information, right? Because once you do that, you get the credit card, you get a Visa, Amex, you get them on ACH. You’re in control at that point. And so you can bill it today, right? Get your team to bill it? And then you can bill it in 30 days. You don’t have to send them an invoice and hope and pray, “Oh, please get my invoice, my $500,000.” And so that’s the first one right? Here we go. Double the fees on Schedule Cs. This individual had an average fee on the Schedule Cs, I don’t even want to say it, it was not good. My target on a Schedule C is $1500, minimum I’ll take is really going to be $1200 or we do have a rule called the doubling rule.

So, the doubling rule is basically if the person’s fee was so low, like $400 bucks, it’s double it. So it’s not the $1200 minimum, but we double it because in one year that’s about as much as somebody can handle. So, a lot of people, almost about 70% of people stay when you double the fees. So if you take somebody who’s paying $400, put them on $800, they’ll stay 70% of the time. And if you do the math on that, that’s a lot better than what you were doing before upselling people into quarterlies. So we have a deck where we sell people into quarterly…the tax planning, the tax preparation, the implementation all into a quarterly, for example, you might do $1500 a quarter, $6,000 a year implementation and planning.

We’re going to charge separately for that, from the prep call, every single person on accounts receivable. Once we get to April, this is just an onslaught of opportunity sitting right in front of you. He’s got somebody in his office calling people on accounts receivable, I don’t want to have that kind of a relationship with my clients. I don’t want to have to call and I don’t want them to see me that way. So then you get your admin team to call, they aren’t going to call, and if they do call, they’re just going to go through the steps, right? It’s not their money. So you’ve got to show them that you can do it. You’ve got to get on the phone and show them how to have a conversation, not just to pick up the money, but to help the client and charge for a tax return.

If somebody is sitting on accounts receivable to $500,000, it means to me, you’re not talking to your clients. You’re not properly charging for a tax return. And when you do talk to them, you’re not trying to sit down and help them. You’re just like having some admin call and say, “send the invoice!” Get on the call, help the client, provide value, collect the check, charge for a tax return. Even though they don’t deserve it, because they should’ve already paid. At this point in time, we’ve got to get the money. How do we get the money? Get on the phone, connect with the client, provide value, sometimes you can even up sell on that call. And now I just taught you how to collect up front. Right? So, here’s another one too. I said, “How’d you get this much darn AR?” He’s not asking for money up front.

He’s not taking control of the payment information. And the billing, he is not doing 50% now, is not doing 50% in 30 days or whenever we filed the return, and he’s not calling people on accounts receivable as the CEO. “Well, you know, Andrew, I want to do what I want.” I don’t care if you want to do it. I don’t care. Wanting is not interesting. Desire is not interesting. Make the decision to do it. You’ve got to ask yourself this year, are you going to increase the fees? Are you going to double it? Are you going to charge separately for the planning? Are you going to call people on AR and are you going to start collecting money up front? Just do it.  And by the way, I mean, come on right now, you’re watching this…what are you doing? I’m filming this, it’s March 3rd. What do you got going on this week that’s so much more exciting? 

This is interesting, right? I looked at him, he looked like he got hit by a semi truck. Do something interesting. When you’re going through pain, do something to make it interesting. Change the deal on somebody, help somebody in a different way, collect some money up front, change the process. Because if you’re just going through tax season, the guy looked like Eeyore, right? “Oh man. Tax season. So much work”. it’s such an exciting time! It’s like the Super Bowl. There are very few times in the year where you just get an overwhelming number of clients coming at you, you can’t even handle it.

You don’t even know what to do. So what are you going to do? You’re just going to keep your head down and be Eeyore, or we’re going to get it together. So, if you guys want to get it together, I’m going to paste the link below this video. Fill out a time to talk with us. The people that have made the most of us…we went over this yesterday. This was so much fun in our leadership meeting. We just had a couple of clients that in the last five days posted different stories of success. When you look at this, I’m going to share this real quick. This is pretty cool to see. And you’re not going to be able to see all of these because it’s going to be pretty small.

Here we go. Let’s see if I can pull this up. You can see here. Boom. This was his best February, 15k cash sales, missed his goal by $976. Eric Woodbury, this guy was making $130k at his job and he makes $92,000 in sales in the month of February. Alicia broke her biggest month on January, 32k, and in February broke it again with 42k. Nicky Nelson, best tax season she’s ever had. Julie Harris actually just broke $70,000 a month in sales. These are people that all posted in our group. By the way guys, we don’t have that many people in our group. We changed our whole offering this year, where we no longer have this huge training program. We’ve got a much smaller group. Now, people that are doing coaching. So, it’s a much bigger investment to work with us than it used to be in the past, but we’re actually working with you every single week, forcing you to implement, doing things like I did there with my client. And so if this is something you think you want to do, go and fill out that application and I will see you on the other side.

 

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