Many people are given credit for the quote, “You cannot be serious.”  As a tennis player and fan, I like to attribute the quote to John McEnroe.  McEnroe used the phrase when he was questioning a line call to the umpire.  

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I’m using it today based on a number of conversations I’ve had with firms post tax season about the hours they worked, their team worked and volume of 1040s.  Folks let’s face it; the future isn’t bright for 1040 heavy firms.  

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Why is that? Some of the issues with 1040s:

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• Perceived value is low unless the 1040 is connected to a business or wealth management.
• Workload compression.  
• Mandatory hours, 6-7 day weeks. You cannot be serious.
• Partner bottlenecks
• Lack of qualified staff
• F clients (family and friends with half-baked pricing) You have more than you think.
• Your clients aren’t thinking about you when you are working late nights, weekends, family plans or missed a workout
• No business model.  What does that mean?  Hiring for the busy season only is getting harder and harder... and having your tax team “sit on the beach” all Summer is not a business model.
• Multiple business models under one roof.  Most firms get behind on monthly accounting, advisory work during tax season.  

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Most Renew firms are 1040 killers.  That is, the firms have dramatically increased their minimum prices and only taking on 1040’s that are connected to a business or wealth management.

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So, what is the solution to your 1040 practice.

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What assumptions do you need to ditch?  Let us give you a couple.  

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• Your firm needs the revenue.  
• Do the math or have us perform a Pareto for Profit analysis.  
• 1040s are much less profitable than you think by the time you ...   send an organizer, set up the client file, chase info, prep the return, review it, chase the client for e-sigs, file the return, invoice the return, chase payment etc.
• If you want to help people, volunteer!

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Establish minimum prices for all clients.  We suggest in the $1,000 range.  There are very few firms that take on 1040 only clients.  By establishing minimum pricing, you send the message you are looking for clients with year-round needs and are headed up market.

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Establish target client pricing. There’s a difference between minimum and targets.

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Only take on 1040’s connected to Wealth Management services or Business Clients.

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Establish what are you going to say No to.  Start with No.  No is a complete sentence where Yes kicks off a series of obligations.

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Position your firm differently including with your referral sources.  “We only work with clients that value and need year-round services.”  

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One way to process returns.  We are still amazed how many firms take paper drop offs, use portals, emails to obtain client information.  What other good business can you determine how you interact with them?  Please note if you are on the accounting industry/webinar circuit you are aware that the industry thinks the solution to your 1040 Practice is more technology.  This is bologna. Doing the wrong activities efficiently is not the solution.

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It's a good time to be an accounting firm.  Lots of demand and limited supply.

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Maybe it’s time for you to get serious about transforming your business model.

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