We Survived Tax Season – Barely

Tax season 2019 was an anomaly at Fox & Co. We could not live up to the 10-day turnaround we have always promised. We took on too many physicians as first-time clients. And we had a complete staffing change from 2018. As a result, I have received some complaints about our tax season service and responsiveness. In 35 years as a business owner, I have learned that for every client who complains, 10 more are either sucking it up or talking to someone who is not me.

To be fair, we have received our share of compliments this year, particularly from clients who were able to provide their critical tax information to us early. Kind words are always appreciated, of course. But our job is not to be content. It’s to provide the tax and CPA services that physicians expect and have trouble finding elsewhere. That means improving every year. This year, we slid backwards and the buck stops with me. I’m going to address the three areas that caused us to stumble and how we are adjusting.

Issue 1 – New Team Laura and I revamped Fox & Co after I became a regular on the WCI forum in 2016. In the last 18 months, 98% of new clients have been physicians in virtual relationships. That’s up from almost zero three years ago. This was difficult for some employees. We weren’t the same old mom and pop firm working with locals and regulars on a comfortable schedule. Our niche was more challenging and required a dynamic skill set. It was exciting for some of us – but others didn’t enjoy working at Fox & Co. 2.0 as much as for the old, familiar model.

As a result, Laura moved up to president at age 26, we hired two new CPA’s before tax season, our office manager became bookkeeper and trained her replacement and, for the first time in over 10 years, I re-learned how to prepare taxes instead of reviewing only.

Solution: Hire early and be flexible. In order to add CPA’s with the experience and client service skills we insist upon, we’re looking nationwide for the right mix of talent and energy. Just as our clients are virtual, we’re planning to add 1.5 virtual CPA’s. They will gradually be integrated into our practice and will not work one on one with physicians until they’ve trained under Laura and me for an appropriate period. Even then, Laura and I will serve as an added contact. When in doubt, we’ll hire for an added cushion. And we’re also improving our training program and adding perks to avoid turnover.

I’ve also moved my involvement from 75:25 Financial Planning v. CPA to spending about 80% of my time on the CPA side.

Issue 2 – New Tax Regulations There is not a lot we could have done about this one. The problem with sweeping tax reform is that you have to go through a cycle to really experience how it all shakes out. Software is changing and being updated throughout tax season, causing holdups, and information-gathering questionnaires must be modified. This just takes time.  With the IRS providing some key guidance as late as January, it put the crunch on being prepared.

Solution: We encourage training and education year-round and, unless the new law is rewritten, I am confident next tax season will be much smoother in this department.

Issue 3 – New Clients: Our mission at Fox & Co. is not to crank out as many returns as possible in order to improve our bottom line. It is to provide a unique level of experience and service that physicians have trouble finding in “typical” CPA firms. The result has been more business than we can handle. And this year, we learned that too much is not a good thing.

Laura and I had to make the difficult decision to close to new clients early in tax season. In a normal year, we would have had no problem gauging when we were comfortably full. Given new staff and new tax law, it was nearly impossible to judge. And it’s especially hard for me to say “no, we can’t help you” when physicians in difficult tax situations reach out. We should have erred on the conservative side and closed to new business several weeks earlier.

Solution: Laura and I currently are developing a better system with concrete metrics we can track. This will help us to know when to add more team members and when to slow the on-boarding of new clients.

Although I’ve aired our dirty laundry in great detail, I think we did several things right:

  • We did not compromise our quality control system. That meant every physician return was reviewed separately by one other CPA plus me. This lowered the risk of oversight and errors that are especially a possibility in a busy tax season.
  • I emailed clients to let them know to expect delays this year and to advise of the hard cutoff for submitting information in order to file returns by April 15. (While I hoped this would help manage expectations, unfortunately, not all clients read my the emails.)
  • Post tax season, I contacted every physician household who had not already emailed me about their experience to ask for feedback and suggestions for improvement. A few harsh responses have led to some much-needed soul searching, but I welcome all feedback and sincerely appreciate the clients who took time to thoughtfully respond. We have given discounts and refunds to clients who had legitimate complaints. And we have received some excellent suggestions that we plan to implement.

Our value proposition at Fox & Company is to provide trusted professional service and year-round involvement that physicians are willing to pay for but have difficulty finding. We use an all-inclusive flat-fee model to encourage interaction and proactivity during and beyond tax season. And we emphasize timely communication and a servant’s heart. As a result, Fox & Co. has grown rapidly, beyond anything we could have imagined. Naturally, we had some growing pains this year.

It’s important to me that we admit our mistakes and do everything possible to make them right. If you have an experience to share, please feel free to email me. Whether it’s good, bad, or ugly, I’d like to know.

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