Learn why the key to client filing delays is being as transparent and authentic as possible.
3 min read
Occasionally, there is that client that won’t return your phone calls until after hours and will send in their paperwork last minute—or not at all. What do you do when you’re in the thick of busy season and your client isn’t getting you the documentation you need? As a business partner, you may not always know what’s going on in your client's lives, but as their trusted advisor, it’s worthwhile finding out what’s holding them back. After all, nobody wants the IRS on their list of creditors.
Here are some tips for how to help your clients recognize the value of your working relationship.
Most client relationships start with onboarding, which is the strategic process of preparing clients to work with your firm. This is when engagement letters come in handy. An engagement letter can be used to outline expectations for both parties to ensure that objectives align and the chain of communication is clear. Expectations can also be discussed in an initial value conversation, written into the contract or by some other means during onboarding. This transitional period is where building that quality relationship starts with mutual trust and understanding. Transparency is key in this stage. Being authentic and available regarding your responsibility to the client is essential in order for you to call on them later when delays occur down the line.
Improve your client relationship from the get-go by investing in a cloud-based accounting software like Canopy. Not only will Canopy help you keep track of client information and securely store their documents, but your clients can also access the client portal that makes collaboration even easier. Some of the client benefits of accounting practice management software include:
If it’s down to the wire, and you’re still not getting through to your client, remind them that while a filing extension is a viable option, there is no option for delaying taxes due. Unless they have a reasonable cause for not filing on time, they will be subject to a failure-to-file penalty, which is typically 5% of the unpaid taxes for each month that the return is late. The IRS also charges interest on top of this penalty, which compounds daily. So the longer your clients wait to file without an approved extension, the more money they are likely to pay in the long run.
If your client still isn’t persuaded by rising costs, it’s worthwhile to inquire about life events and check in about their worry to pay taxes due. As their trusted advisor, you can help them decide on the best payment option for their situation. Explain to them that the IRS has multiple electronic payment options these days including a direct pay option which will deduct what’s owed directly from a checking or savings account. There is always the option to fill out Form 9465, Installation Agreement Request, in order to pay taxes due in monthly increments or you can insist they apply for an online payment plan which they are instantly notified of approval after completing the application.
Ultimately, it’s up to you whether you want to encourage your client to file an extension. Depending on the timeline of tax season, your firm’s capacity, and the complexity of your remaining work, it might be in their best interest to push for an extension. Lead with empathy when communicating to the client, highlighting the lateness of the season and the delays you’ve already endured. You and your team are due for much needed rest, and after a vital recharge, you can process their paperwork with fresh eyes.
A good working relationship includes mutual understanding and respect. That hint of personal touch to your professional approach is key in maintaining rapport with your clients. In order to best assist them as a trusted advisor and business partner, it occasionally helps to know what they’re going through at home and where they are at in their personal journey. Your clients are less likely to disregard expectations when you approach them with authenticity and transparency.
If you want more tips for how to effectively manage clients, read this blog by our Chief Product Officer, Larry Furr.
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Canopy takes the headaches out of client management by offering a way to keep client info organized.
I love how easy it is to setup a new client in this software. Once set up, it's one click to get IRS transcripts downloaded for my review. This saves me at least an hour each week in comparison to the software I used to use.
This makes workflow for tax resolution manageable. This business is a bunch of hurry up and wait. This system helps to refresh my memory while transitioning to different clients.
The ability to securely share documents with clients as well as complete POAs from client contact data already in Canopy. The ability to route workflow between team members with color coded statuses allows us to work efficiently.
Cool features, outstanding customer service, constantly updating to make it better. I love that I can upload files easily to a secure client portal and we don't have to email files anymore. Absolutely can't imagine not having this software.
It's safe and secure. Clients are able to upload documents and the documents are saved their portal which as a result, keeps us better organized. The task feature keeps us organized and we know exactly the status of each client.
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