december2021 - 23

THE MILLENNIAL ADVISOR
Avoiding the Inevitable
GARRETT WAGNER, CPA
CEO/Founder, C3 Evolution Group
garrett.wagner@cpapracticeadvisor.com
A COMMON IDIOM we all have heard countless times, " Nothing can be said to be certain,
except death and taxes. " Benjamin Franklin purportedly wrote that famous line in a letter
back in 1789 after the Constitution was signed. Since then that phrase has become a
legend on its own. From countless references in literature, movies, books, pop-culture,
to you name it, that phase has shown up. We accountants of any generation are fully
aware of this phrase and see this first hand every year. As for us, it isn't just taxes that
are certain but it is another busy season.
Unfortunately, the 2022 busy
season is shaping up to be more
challenging than normal. Firms of
all sizes are faced with one major
problem more than anything else,
even death: A shortage of people. It
doesn't matter the firm size, scope
of work, public vs. private, the talent
shortage is here.
Even those virtual firms, often
run by millennials, are facing this
same challenge. In the past, these
virtual firms did not face the same
staffing shortage legacy firms faced,
however now they cannot avoid the
staffing shortage any more than
people can avoid death and taxes.
Given this universal problem
with which we are faced and last
month's column talking about the
importance of taking time to plan for
the future, I think some planning for
this problem is appropriate.
Before you wait to address this
issue on March 1, when it is too late,
we can start now and put a plan in
place today. The reality we are faced
with is firms will have some level of
a staffing shortage. That is not an
unknown. The unknown is what you
will do as a result.
PLAN A
The first area a firm should look at
is pricing. We are not talking here
about why you should stop billing by
the hour, of course you should. What
we are talking about are the options
you provide your clients. You see in
the current conditions, our supply
of staff to create the tax return
products is limited. Therefore, we
can expect that we will complete
fewer returns next year than in prior
years. What this provides us with is
an opportunity to offer our clients
options.
To frame out that option we can
look at two other industries, Disney
theme parks and airlines. Both of
those provide their customers with
options where customers can pay
more money and get more options
or benefits. At Disney, customers can
pay more when entering the park to
avoid long lines and get preferred
access. At airlines, customers can
pay more money to get a better seat
on the plane. After all, consumers
love options.
Accountants can follow this
same process. We can offer our
clients a premium tax service. For
a small additional price, the client's
return will get priority assignment
and return completion within the
firm. Many firms have already done
this in the past with great success.
In this situation you are letting your
clients decide. They can move to the
front of the line and get their returns
done sooner for a price. Or they can
wait in the longer lines like everyone
else. By doing this, you are allowing
your clients to make the choice on
which returns you do first, and you
get compensated as a result.
PLAN B
Now, if adjusting your prices does not
appeal to you, I have a another option
for you. This is one that actually has
gained in popularity over the past few
years as firms are constantly trying to
figure out how to do more with less. As
industry thought leader Paul Latham
of Hayden Rock Solutions discusses
firms are beginning to sell a tier of
their clients to another firm to free
up resources and capacity for growth.
You may not be ready to sell your
whole practice and retire, but perhaps
it is time to think about selling a part
of your practice to another firm. This
transaction allows you to capitalize
on the value you have built in your
practice today, and by selling a part of
your practice you free up a substantial
amount of resources as well.
Normally when firms take this
path, they will sell the bottom third
of their practice to someone else.
The firm ends up selling a third of
the revenue, where those clients make
up closer to 50% of the work/hours
done at the firm. The resulting gain
in resources is then highly significant.
DO NOT WAIT
Before March comes and we feel
overwhelmed, an hour of effort now
can save 100 hours when it really
counts. While you may not be able
to find more people to hire, you
have options to navigate this path
forward and have a successful busy
season. While taxes may be certain,
your pain does not have to be. ■
DECEMBER 2021 ■ www.CPAPracticeAdvisor.com
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