Find the “Right Solution” for the Client (custom fit)
When a client approaches you with a problem and leads you down the path of what they think the possible solutions are, it is always wise to back-up and see if there are alternative solutions.
Your SALT Partner, or YSP, is always looking out for the best interests of the client, in search of the most practical and cost-effective (legal) solution. In addition, YSP does not attempt to sell a “cookie-cutter” pre-packaged solution because his or her firm is pushing the product. YSP does not put his or her firm’s sales goals ahead of providing the “right solution” for the client.
In other words, put yourself in the client's shoes. Think from their perspective and tell them what you would do if you were them. Isn't that what the client wants?
What do you think?
Please leave a comment or send me an e-mail with your thoughts. Thanks.
Click on the following links to access the first 4 best practices:
Greatest SALT Consultant: Part 4
Greatest SALT Consultant: Part 3
Greatest SALT Consultant: Part 2
Greatest SALT Consultant: Part 1
2 comments:
I agree with most of your “Best Practices” however I do not completely agree with the Fixed Fees component. With Sarbanes Oxley, AICPA’s rules, Circular 230 and now IRS Notice 2008-43 consulting firms are now often limited regarding what they can do, when they can do it and how they must charge for their services. However, I feel as though many clients still want a contingent based fee so that if no value is added, no fee is paid.
Since there are many different areas of the tax return that are subject to esoteric interpretation and analysis, many companies choose not to address these difficult issues during their compliance process since they simply don’t have the resources. They may do this out of ignorance or knowing full well that money is being left on the table. Similarly, since many of this work is so time consuming and not guaranteed to yield savings, even service providers such as accounting firms can not provide this level of analysis in conjunction with preparing the returns for the client. The clients may think that they are getting such in-depth review, but they are not. If they were, their compliance fees would be dramatically higher.
Accordingly, consultants that knows where the soft spots are on a return, whether its apportionment of income issues, business vs non-business issues, unitary vs. non-unitary issues and so on, their expertise can be developed and then rolled out to targeted clients that meet the necessary fact patterns needed to take advantage of the developed expertise. In return, the client gets the expertise and pays for it out of the additional tax they paid when the additional analysis was not undertaken and only pays if the additional analysis was warranted.
Paying for this level of analysis otherwise is a waste of money.
Dear Anonymous,
With my "fixed-fee" best practice I was mostly trying to state my preference of using fixed-fees versus billing-by-the-hour.
Now, in regards to contingent-fee based work, I would still do that type of work if it is warranted, allowed, and preferred by the client. However, I would suggest using fixed-fees and a phased approach whereby the client pays for one phase at a time. This helps improve communication between the client and consultant regarding what is being done, and what is being found by the consultant.
In regards to your comments surrounding "gray areas" or items open to interpretation, and how much or when would a client be willing to pay for it; I would say this. This is where recommending or helping the client decide what is the "right solution" for them is extremely important. Consultants should not push a solution that is not practical or where the value does not outweigh the cost. Hence, it is usually beneficial to do a cost/benefit analysis based on all of the facts and circumstances.
With that said, would a company rather pay a consultant now, if they could pay less in tax, interest and penalties later?
States are not becoming less aggressive. They are becomeing more aggressive as they face financial budget problems and declining revenues.
I think the day of the "wait and see" approach may be over.
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