4 Ways To Improve Your Tax Business
Small businesses not only help keep our communities strong, but they also typically provide the kind of high-quality, “down-to-earth” products and customer service that the corporate giants and larger enterprises tend to lack. Small businesses are important—and your tax business is no different—but running a lean ‘n mean business can also be difficult. Take a look at a few of these tips and tools to improve your tax business this year!
Start With A Foundation
If you’re just starting out, make sure you have the proper training and certification. Sure, maybe you’ve been preparing taxes for friends and family for years now, or maybe you’re great with numbers and have access to all the latest software… but, the IRS recently passed new regulations which require tax preparers to not only have mandatory credentials and/or certification, but to also maintain annual, continuing education requirements. The IRS recognizes three basic credentials: Enrolled Agent (EA), Certified Public Accountant (CPA), and Registered Tax Return Preparer (RTRP). Each requires different level of study; for example, a CPA requires four to five years of study in accounting, a degree, one to two years of apprenticeship in a CPA firm, and a passing score on the CPA exams. Recently the IRS discontinued its RTRP program, which was considerably less intensive. Whichever, route you decide to take, make sure you stay up to date on tax reform news to ensure you’re accurately following IRS policy.
As technology continues to improve, new and small firms have so many more resources when it comes to running their business. Once tax preparers become certified, many invest in cloud-based software such as Intuit ProConnect Lacerte Tax or Intuit Tax Online. Intuit offers an array of programs which are excellent for tax preparers of any certification level. Additionally, using a minimal budget, there are countless marketing and management tools at your disposal online, from Paypal for invoicing to Zoom and Skype for communication, or MailChimp and Hootsuite for marketing.
Understand Your Cash Flow
This may seem like a “duh,” especially for a tax business, but the truth is whether you own a two-man company or a 200-man company, keeping cash flow under control and sticking to a budget is vital to the success of your company. You may find that as you grow, budgeting needs will evolve, so you’ll need to keep continuously adjusting. Keep a keen eye on profit patterns and make sure to revise your monthly and annual budgets on a consistent basis to make sure you stay on track. As a tax professional, obviously you’ll likely do the bulk of your earning during tax season if you’re not providing other financial services. Especially if you’re just starting your business, understanding this seasonal cash flow can help you better prepare and make the best financial decisions for your company for the rest of the year. You may even find the need to provide some other financial services such as retirement planning or money management consulting.
If you’re looking to grow your clientele, consider setting up a booth at local colleges, farmer’s markets, or putting up flyers in your area. You’ll want to network as much as possible. Join local organizations and do some research on events for local small business. Participation doesn’t always have to be tax or finance related, but it is important to stay involved. You may also consider setting up referral programs or joining referral-based groups in your area, like Business Network International for example, which has chapters worldwide.
Getting a CPA business up and running is no easy feat, but with the right ingenuity, you can see your way to tax-based profits.