For many S-Corp owners, managing accounting and tax matters is a boring and time consuming task, fraught with complexity and frequent changes in tax regulations. In our experience, the majority of business owners want continuous support from their accountants. However, traditional accountants often work on a project basis, which leads to communication delays and unexpected charges for additional questions. Here’s why this happens and how a subscription-based service can offer a better solution.
Understanding the Traditional CPA Model
CPA firms typically operate on a project-based model. For example, preparing a tax return is considered a project. Given that firms handle hundreds of such projects annually, each tax return is treated as a separate task with a defined start and end point. Once the tax return is completed and filed, the project—and with it, the CPA’s formal contractual obligation—concludes.
However, many clients misunderstand this arrangement, expecting ongoing support beyond the initial scope of work. This misunderstanding often leads to frustration when CPAs cannot provide free ongoing advice or respond promptly to clients' questions after the tax return is filed and their project is closed.
The Challenge of Free Support in a Project-Based Model
CPAs manage a significant volume of clients, which makes providing free, continuous support impractical. In many cases, even quick responses take a CPA substantial time, since he/she needs to locate the client in their system and look over their prior history before answering a question. Responding to client emails and phone calls consumes billable time, and this business practice becomes unsustainable when multiplied across hundreds of clients. As a result, CPAs either charge for even simple queries, or ignore some questions completely.
This model has downsides for both parties. Clients hesitate to seek advice, fearing high costs, which results in costly financial errors. Meanwhile, CPAs may lose touch with their clients, missing opportunities to offer valuable guidance and ensure compliance.
The Subscription-Based Solution
An effective solution to these challenges is the subscription-based service model. This approach offers clients a predetermined fee for ongoing support, including consultations for tax and accounting issues. This model provides several advantages:
- Predictable Costs: Clients pay a fixed monthly, removing the uncertainty of additional charges for questions. This encourages clients to seek advice proactively, reducing the risk of costly mistakes.
- Stronger Relationships: Regular interaction fosters a closer relationship between the CPA and the client. CPAs stay informed about their clients' financial situations and can offer timely advice and guidance.
Our Approach
At our firm, we embrace this subscription model. Our clients benefit from free, 15-minute consultations via phone or email, ensuring they receive timely advice without additional charges. For more involved matters, we handle those separately, ensuring clear and fair pricing for complex work.
This approach not only enhances client satisfaction but also ensures CPAs can provide meaningful, timely advice without the constraints of the traditional billing model.
Conclusion
The traditional project-based model of CPA services often leads to miscommunication and dissatisfaction. By adopting a subscription-based model, both S-Corp owners and CPAs can enjoy a more effective and transparent relationship. Clients receive the support they need without fear of unexpected costs, while CPAs can maintain meaningful engagement and offer valuable advice. This win-win solution fosters better financial management and ensures that expert guidance is always within reach.