the secret sauce? value pricing tax advisory services.
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jackie meyer, cpa, ctc, msa, is president and founder of meyer tax consulting llc, taxplaniq, and concierge accountant coaching programs in southlake, texas. she offers concierge tax and accounting services to assist clients with anything from income-shifting strategies to managing a family business in qbo. |
by jackie meyer
the holistic guide to wealth management
revenue growth isn’t just a metric; it’s at the heart of financial well-being for financial professionals and their clients. when a firm grows its revenue, the balance sheet isn’t the only thing that benefits. it enables the firm to invest in advanced technologies and education, to offer more comprehensive services, to fulfill philanthropic goals and to attract top-tier talent. expanding revenue also benefits the firm’s clients by availing them of more strategic advice, faster response times and ultimately, a more secure financial future.
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according to an american psychological association’s stress in america survey, money worries and inflation have raised our collective stress to the highest level since 2015. financial stress is detrimental to mental health and leads to higher rates of anxiety, depression and other mental health issues.
moreover, a financially secure firm is more empowered to give back to the community. with a stable revenue stream, firms can allocate funds for charitable initiatives, sponsor community events, and engage in corporate social responsibility programs. it’s a win-win situation in which the firm can provide higher-quality services and clients achieve better financial outcomes from maximizing tax savings to optimizing investment strategies to planning for retirement.
the roi method
enter the roi method, a game-changing approach to tax planning that has redefined the paradigm of revenue generation in accounting. let’s see if it makes sense for your firm and how you can charge for it.
the importance of tax planning in a holistic strategy
in an age of higher economic uncertainty, clients seek advisors who can provide more than just compliance services. they need a partner who understands the nuances of tax planning and who can guide them through turbulent financial terrain. for example, during the pandemic and related economic downturn, our firm helped numerous clients secure ppp loans. doing so not only helped them keep their businesses afloat but positioned them for growth as the economy recovered.
we’ve also helped many clients adjust to changes in the research & development tax credit, which, if ignored, would have caused them to owe millions more in taxes.
secret sauce: value pricing tax advisory services
unlike traditional methods of value pricing that focus solely on time and materials, the roi method of tax planning accounts for complexity, risk, urgency and knowledge when setting the price, as well as and both tangible and intangible benefits. the key is to make the roi method work is to ensure that your client receives an immediate roi of at least 200 percent in tax savings. however, roi can approach 400 percent if the engagement involves low complexity, low urgency, and low benefits. value pricing is set up front, providing transparency and certainty for both parties.
real-world example
let’s say we identify the following tax-saving strategies for a client:
- entity selection ($7,000 in potential tax savings)
- accountable plan ($3,000)
- retirement planning ($20,000)
these solutions are fairly simple and non-urgent but deliver high intangible benefits. how? by offering unlimited access to the firm or other competitive advantages. by providing these services, the roi averages out to about 350 percent and makes the suggested pricing for these services around $8,571. software such as taxplaniq makes the pricing calculation for tax advisors.
in contrast, hourly billing can be detrimental to both the client and the firm. it discourages efficiency, creates uncertainty around the final cost, and misaligns the interests of the client and the service provider. contingent fees, on the other hand, are based on a final figure, often leading to uncertainty and potential conflicts of interest. with hourly billing, there’s no incentive for the firm to go the extra mile so the risk of failure is higher. with the roi method, however, the probability of success is almost 100 percent. that means more income for both the taxpayer and the tax firm.
another real-world example
a small business owner struggled to understand his financial standing and tax obligations. by applying the roi method, his cpa was able to reduce the owner’s tax liability by $60,000 per year while aligning his business strategy with his personal financial goals. not only was the owner thrilled, but the client grew from a few hours a year to tens of thousands of dollars.
the firm continued to upsell other clients to this value-priced strategy and enjoyed a 30 percent increase in profits within three months.
my story
by incorporating the roi method of tax planning into my own practice – meyer tax – i was able to reshape the landscape of tax planning and advisory services, not just in my hometown of southlake, texas, but nationwide. by focusing relentlessly on value, not billable hours, the practice quickly tripled its revenue. i was able to sell it in 2022 for seven figures – with a client base of just 56.
however, the benefits of the roi method extended far beyond my own financial gain. it allowed me to transition to a four-hour workweek, to start a doctorate in leadership program and to launch two other companies. these changes significantly enhanced the quality of life for me, my staff and their families. this breakthrough wasn’t achieved through traditional means, but by fully embracing the principles of value pricing in tax advisory services.
before implementing this method, i worked 60-hour weeks. the stress and workload caused health complications that made me question whether i could continue in the accounting profession. this wakeup call forced me to reevaluate not just my business model but also my life.
implementing the roi method allowed me to delegate tasks more effectively and to elevate staff members into roles that aligned with my beliefs and methods. i’m now free to focus on what truly matters – my health, my family and the strategic direction of my businesses, including the launch of taxplaniq. in short, this method gave me back my life.
i’m grateful for the incredible business coaches who guided me on this journey, and i’ve since taken on the role of a coach myself. the most rewarding part has been seeing the success of hundreds of firms i’ve had the privilege to coach. their achievements serve as a constant reminder that the principles of the roi method can drive growth and well-being for financial professionals at all stages of their careers.
five kpis to measure success
still skeptical about the roi method? here are five proven ways to measure its effectiveness:
- average revenue per client due to enhanced tax/financial planning. the higher the average revenue per client annually, the higher quality that can be provided.
- client satisfaction. measure clients’ satisfaction levels through feedback and testimonials. as we transition to the roi method, a net promoter score (nps) should increase each year. in our firm’s case, we achieved an nps of over 80 percent—double the average nps for accounting firms in 2022, according to a study by clearlyrated.
- tax savings. evaluate the tax savings achieved for clients versus their investment roi. aim to provide an average of 200 to 400 percent immediate tangible roi. but also track total tax savings for clients to motivate your team.
- net profit margin. while outsourced cfo work might bring in $100,000 a year for a single project, it often requires a significant amount of work, especially from the managing or senior partner. the net profit margin on outsourced cfo work is good, but it’s not as good as tax planning using the roi method of tax planning. for example, one of our clients transitioned from outsourced cfo work to our tax planning services and saw a 30 percent increase in net profit margins while reducing their workload by 20 percent.
- the philanthropic ratio, which measures the percentage of net income donated to charitable causes, is a powerful indicator of a company’s commitment to social responsibility. the philanthropic ratio can be included in annual reports, marketing materials or stakeholder communications to showcase the company’s impact beyond just financial metrics. for example, if a business has a net income of $1 million and donates $50,000 to charitable causes, its philanthropic ratio is 5 percent.
for those ready to embrace new paradigms, the roi method can lead toward an era of innovation, success and unprecedented growth. but let’s be clear: in this rapidly evolving landscape shaped by artificial intelligence and natural language processing models, adaptation isn’t optional; it’s imperative.
the roi method isn’t merely a set of guidelines; it’s a philosophy that reinvigorates your sense of purpose, passion and profit. i call this the c3p method to measure success:
co-pilot (mentorship/coaching) + passion (what you love) + purpose (what others value in you) + profit = success
by integrating this groundbreaking approach into your practice, you’re not just changing your business model; you’re revolutionizing your entire mindset. you’re joining a movement that’s setting new standards and challenging us all to think differently about what it means to be in business in this age of technological advancement.