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Tips for Working with Small Business Clients

Small business clients have particular needs, and Ignatius L. Jackson, CPA, is here to help. Jackson, a CPA based in Tempe, Arizona, specializes in small business accounting services, such as compilations, bookkeeping and tax preparation. Although Jackson has worked with companies of all sizes and across several industries, he enjoys helping small business clients like non-profit organizations and churches save money on taxes. 

“Typically, they don’t understand the tax code and all the ways they could be using the code to save money. Most small business owners who don’t work with a CPA end up overpaying taxes by several thousands of dollars,” Jackson said. 

What’s more, right now might be the perfect time for accounting professionals to expand their services. Between the COVID-19 pandemic and older professionals retiring from the field, Jackson is inundated with new clients.

“Clients are going to need new resources, so we definitely need new CPAs to hang out their shingle,” he said. 

Here, Jackson offers tips for accounting professionals who want to work with small businesses or those who are just starting their own firms.

1. Explain why working with a CPA pays. Those who start a new business are often surprised when the cost of doing their taxes suddenly triples or even quadruples, Jackson said. CPAs working with these clients should break down the numbers and show them how much they’re saving by working with an accountant. 

In his initial consultation with a client, Jackson does a high-level estimate and shows them what they could save based on a couple different strategies. When they compare this amount to the fees of working with a CPA, they understand why they should hand over their tax preparation to an expert. 

Although Jackson charges for an initial consultation, most clients seem to think the fee is worthwhile – about 85 percent of clients who have the initial consultation with Jackson decide to work with him. 

2. Know your value–and price your services accordingly. Last year, Jackson increased his prices for all clients across the board by about 15-20 percent, and he’s considering increasing them again.

“You have to know your value,” Jackson said. 

Jackson is a value-based provider, meaning he doesn’t charge by the hour, with the exception of representation work that requires him to be on the phone with the IRS. Otherwise, he offers value-based billing.

“People want to know how much they’re paying, and they don’t want to be surprised when they get the bill,” he said. 

Most of Jackson’s clients were understanding when he increased his prices, he said, because they know the value of his services. In fact, Jackson recently acquired a client who had been going to a larger firm for years–and paying about $20,000 per year. With Jackson, that client is now paying about $2,000.

“Some of these firms charge $500 an hour. Small businesses don’t need that. If you have $25 million in revenues or less, you don’t need that type of service, and my client probably realized that,” he said. 

3. Bundle services to make more money per client. Consider including planning and compliance services with your tax preparation services, possibly for a combined price, or as an add-on service for an additional fee, Jackson said. This can increase how much money you make per client, meaning you can afford to take on fewer clients. 

“My goal is to average about $3,000 to $4,000 in billing per client, allowing me to more easily manage the relationship and provide better customer service,” Jackson said. 

While some CPAs prefer to undervalue their services in a bid to get more clients, Jackson said, he prefers to have fewer clients who are paying more.

“It’s less stressful, more economically feasible, and it ensures your clients stay happy so you have less turnover,” he said. 

Ultimately, the most important advice Jackson offered was to be responsive and timely, even when you feel overwhelmed.

“It’s a phenomenal field with a lot of potential. Provide good customer service, and keep your prices reasonable, but not cheap,” he said.