Traditional Tax Preparers vs. Collaborative Tax Advisors
As with any field there is a range of expertise and business models when it comes to tax professionals. I want to talk about the difference between the traditional model tax preparers versus the more collaborative (value-added) tax advisors.
I have experience working in both business models and they are very different. Let do this pros and cons style!
As with any field there is a range of expertise and business models when it comes to tax professionals. I want to talk about the difference between the traditional model tax preparers versus the more collaborative (value-added) tax advisors. I have experience working in both business models and they are very different. Let do this pros and cons style!
Traditional Model (High Volume) Tax Preparers:
Pros:
- Lower fees – quantity drives their revenue model.
- Quick turnaround time on tax returns – they have their processes down and they crank them out!
- Experts on the simpler tax returns – lower fees usually mean less complicated tax returns.
- Larger client base - every potential client may be an okay fit.
Cons:
- You are just one of MANY on their list of clients.
- Usually only provide tax preparation and little to no tax planning unless requested by their clients, even then it may be limited in scope.
- Focus on the past, rarely the present and the future are considered – they are head down on those past tax returns.
- Communication is lacking – many times they are unresponsive because they are not in the office year-round or because they have completed the service you paid for and it didn’t include additional questions.
Collaborative (Low Volume) Tax Advisors:
Pros:
- Relationships with your advisor and staff – they know you, your kids, your dog’s name and your goals because they know you.
- They are looking at your present and future at every opportunity – built in check-ins all year long.
- Highly responsive to emails and phone calls - they take their advisor role very seriously.
- Tax planning - formal yearly planning with options for tax mitigation and a good estimate of liabilities. #nosurprisetaxseason
- Sometimes they serve as personal counselors – they take the time to listen to you about whatever you need to talk about.
Cons:
- Higher fees
- Might be slower on the tax preparation turnaround time - they may be researching, comparing outcomes to the tax plan, and asking lots of questions.
- Not a good fit for every person and their business.
Each type of tax professional has a place in the market and either is a good fit depending on the stage of business the potential client is in and of course their priorities. What are your priorities when looking for a tax professional?