Accounting
Art of Accounting: An idea from a Chinese takeout menu
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I must have seen more than a thousand Chinese takeout menus. I always look at them, although I pretty much always order the same thing. Last week I noticed something that I have never seen before — a suggestion section for what to order. There were five suggestions. They all looked good and were slightly upscale. That got me thinking about whether CPAs should offer suggested services, and if not, why don’t they?
I did not order any of the suggestions on the menu as my mind was made up about what I was going to order, but the suggestions planted a seed in my mind. I suspect I will order one of them in the near future.
I liked the idea and, while I’ve never directly presented suggestions as such to a client, I have offered suggestions in the form of a listing of services that were not included in my fixed-price engagements. One example of such wording is: “Not included are services in connection with reviewing your accounting system and its controls that would offer a higher degree of protection against employee theft or embezzlement. This would be a special single purpose engagement at prices and timing to be decided upon along with a catalogue of benefits and value to be conferred upon you.”
This rarely resulted in added engagements. Perhaps a better way of presenting this, using the Chinese menu idea, would have been:
Suggestions of additional high-value single purpose services (prices fixed and guaranteed for one year):
- Analysis and review of your accounting system and its controls that would offer a higher degree of protection against employee errors, theft or embezzlement: $7,200
This suggestion also provides a fixed price and a deadline for the client to engage you for this service. i.e., one year. At the point of offering this service, you should have a pretty good idea of what would be involved, how it would be staffed and the time it would take. Even if you are too low, you will still receive the added revenue, help your client with a service they need and can benefit from, open the door to further services at a later date and establish a stronger relationship with that client.
Further, if you did not offer a fixed fee, the client might have trepidation at the cost and would be hesitant to ask what it might be or for an estimate or range. In my experience, any estimate on a time-based project becomes a “fixed” fee, plus or minus 10% or 15%, so why not just quote a fixed fee? If you feel you are not able to reasonably estimate a fee for this service, then perhaps you are in the wrong business.
Here are some other suggestions of added engagements:
- Special services in connection with a surprise bank reconciliation and a review of the client-prepared bank reconciliations during the previous year, including a reconciliation of any differences in the cash balance the client is working off of compared to the most recent month-end reconciled bank balance. The internal bank reconciliation procedures, and their thoroughness and timeliness, will be reviewed and changes will be suggested if we believe that is necessary. Price: $8,000.
- An informal valuation of your business will be performed to determine an estimated value of your business, identification of value drivers, how a buyer would value your business, how our valuation could be used as a benchmark to measure growth in the form of value creation, and how this value would interface with your personal financial plan and estate plan. Price with a written valuation and template to measure future changes in value: $12,500. Price with the template but without the written valuation: $8,500.
- An analysis of your eventual estate liquidity and cash flow based upon your present and projected individual financial statement, your estimate of the current value of your business, your estimate of your cash flow needs in retirement, a review of your will and any trust documents, designations of beneficiary forms and life insurance: Price $9,500.
The above are examples of added high-value services that could confer substantial benefit along with the client having a heightened feeling of financial security, comfort and empowerment. All prices mentioned are illustrative and would be based on the client’s situation. A client with a business with sales of $3 million would have a much lower price for a valuation than a business grossing $30 million a year. Likewise, a client with $3 million net worth would have a much less complicated financial and potential estate situation than a client with $30 million net worth along with multiple trusts, real estate and business investments.
My motive with this column is to pique your interest and imagination about what your clients might need. Examine your clients’ situations, their pain points, and expressed and unmentioned concerns, find ways to help them, and then prepare a listing of three or four suggested services that would allay their fears and concerns.
If my local Chinese restaurant could do it, then you and I should also be able to do it for our clients. Do not wait for the client to ask about added services. Suggest them now!
Do not hesitate to contact me at
Let’s face it: Clients of accounting firms come with unique, continuously evolving needs, which can make streamlining operations something of a moving target.
But in the realm of client accounting services, improvements in one area — travel and expense management — can have an outsized effect on maximizing efficiency. In pursuit of this goal, more firms are embracing integrated T&E solutions, which help them standardize their tech stacks.
However, not all T&E management solutions are created equal. And one feature in particular can give accounting firms a distinct advantage over the competition: enabling their clients to choose whichever credit card they like. Here’s why.
The changing face of T&E management
Traditionally, T&E inhabited separate worlds, and companies used separate applications to manage both. This legacy process has been fraught with inefficiencies, such as reconciling credit card statements and ensuring compliance with company policies. The result: a heavy load of busywork for admins — and a large number of headaches.
Once the benefits of merging travel and expense became clear, a single platform was as inevitable as it was game-changing. Today, modern solutions have brought travel booking, expense reporting and reimbursements together and automated many of the processes to a transformative degree. For some of these solutions, the innovations don’t stop there.
The case for flexibility
T&E platforms can differ in important ways, but the technology behind almost all of them mandates that customers switch corporate cards. Until recently, adopting the platform’s prescribed card was the only way to reap the rewards of a modern T&E solution. It’s been all or nothing.
Changing cards, however, can easily complicate a client’s overall financial ecosystem. And some clients simply don’t want to switch. In a recent survey, 71% of business travelers said they were happy with their corporate card solution but that their expense management platform doesn’t always support their needs. So why should they have to switch?
They don’t. Technology now exists that allows customers to bring their own cards — a flexibility that offers important advantages to accounting firms and their clients. These include:
1. Client autonomy and satisfaction: Clients may have strategic financial agreements, loyalty programs, or credit limits with their existing cards. Offering a platform that adapts to their needs rather than forcing a change strengthens client satisfaction and trust.
2. Tech stack standardization: Platforms offering card flexibility make it easier for accounting firms to standardize their tech stacks. Why work with more vendors and more complexity than necessary?
3. Simplified finances and comprehensive reporting: Supporting multiple credit cards lets accounting firms provide their clients with a more seamless integration into existing financial systems. Firms can more effectively capture comprehensive financial data, providing deeper insights and facilitating more robust financial analysis and reporting. It’s a holistic approach that aligns perfectly with the CAS model, by augmenting advisory capabilities with richer data sets.
4. Empowered negotiations and business relationships: The flexibility to select credit cards can empower clients in negotiations with financial institutions, potentially securing lower fees or enhanced bonuses. By allowing any credit card, firms can foster strong business relationships with clients who appreciate the autonomy and empowerment this choice provides.
5. Adaptability to multiple client requirements: Within the CAS model, firms may deal with a diverse clientele across various industries. Each client might have distinct policies, vendor relationships or geographic considerations that influence their choice of credit cards. An adaptable T&E platform mitigates the friction of onboarding and accommodates a wider array of client needs, ultimately enhancing a firm’s versatility and market reach.
Looking beyond the status quo
Delivering value is what every accounting firm wants to do for its clients, and an integrated T&E platform with flexible credit card options can help. Of course, the inverse is also true — restricting clients to specific credit cards may inadvertently limit their own adaptability and obstruct clients’ existing financial strategies.
Flexibility, adaptability and client-centric models are crucial for the future of T&E solutions, and key to what accounting firms can offer their clients. As the industry continues to innovate, platforms that marry robust features with client-first flexibility will lead the pack, setting a standard in service delivery that resonates across industries.
The bottom line is this: Providing clients with their choice of credit card clearly shows the firm is committed to a higher level of service, deeper insights and a more personalized client experience. For accounting firms advancing their CAS practices, this could be the linchpin for delivering enhanced client satisfaction and staying competitive in a dynamic market.
A federal court has greenlit the Internal Revenue Service to serve a John Doe summons on JustAnswer LLC, seeking information about U.S. taxpayers who were paid for answering questions as “experts” from 2017 to 2020.
The IRS wants the records of individuals who were paid by Covina, California-based JustAnswer, which operates a digital platform where the public pays for answers by professionals such as tax pros, doctors, lawyers, veterinarians and engineers.
In the
There’s no indication that JustAnswer has engaged in any wrongdoing in connection with its digital platform business, authorities said, adding that the IRS uses John Doe summonses to obtain information about individuals whose identities are unknown and who possibly violated internal revenue laws.
JustAnswer must produce records identifying U.S. taxpayers who have used its platform to earn income, along with other documents relating to their work.
“The gig economy has grown in recent years and with it, the concern for tax compliance issues has increased,” said Deputy Assistant Attorney General David Hubbert of the Justice Department’s Tax Division, in a statement.
“Like their fellow Americans who earn income through traditional means, U.S. taxpayers who earn income from digital and other platforms that comprise the gig economy need to pay their fair share of taxes,” added IRS Commissioner Danny Werfel in a statement.
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