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How to Step Up Client Communications Ahead of New Tax Changes

It is important to be proactive and clear when communicating new tax changes to clients.

Most firms send tax law updates by email, leading to information overload for tax partners as well as clients. It’ll only get worse as the Biden administrations starts to revamp tax laws and roll out new tax changes. Here’s how to fix the problem before it’s too late.

Overview

For all the considerable resources large accounting firms devote to keeping up with tax code updates, they do a remarkably poor job of communicating the impact of those changes to their most vital constituencies: front-line accountants and their clients.

It’s not entirely their fault. The federal tax code is enormous. Tax bills and the regulations they produce can number in the thousands of pages. The government itself doesn’t always do a great job of making clear what’s new and what it means. The process is often opaque. Key details can be shrouded until the last minute, as deals among lawmakers come together or fall apart.

There’s not much firms themselves can do about this process. What they can control, however, is how they communicate myriad changes internally and externally.

With a new wave of potential tax legislation coming in the Biden administration, accounting firms have a new opportunity to learn from their mistakes in 2017, and do it right this time around.

What Doesn’t Work

Let’s start with what doesn’t work. When parsing a new tax law or regulation, a typical accounting firm will have their experts study the source text, such as the bill itself or new agency guidance. Then they’ll identify what’s changed and what the changes mean for the firm and its clients. Finally they’ll blast out emails to the firm’s accountants summarizing their findings.

In cases where the changes are far-reaching and obscured by a halting government rollout, as was the case in 2017, accountants may receive waves of emails. Many times these are from several different policy teams working on different aspects of the changes. In cases where the government pushes out new guidance to aid understanding of the reforms, new emails can appear to contradict previous guidance.

The result is a cluttered inbox stuffed with dense, overlapping and potentially contradictory messages from different corners of the firm’s brain trust.

It doesn’t work.

While there isn’t a single silver-bullet solution to the communication problem, firms that aggressively start innovating in this area will be able to field a roster of accountants confident in their understanding of what’s new in Washington. In turn, this makes them better equipped to advise clients than their competitors who are still toiling under an archaic system of blasting out unread emails.

One way to innovate is to adopt automated processes that can greatly accelerate a firm’s ability to analyze the upshot of a major tax overhaul, identifying the most significant elements for its accounting partners and gaming out what it will mean for clients. This can help firms be more precise and targeted in their communications, trading information overload for information optimization.

Firms can also help their cause by reducing the distance between accountants and the information they need to understand the impact of tax changes. Here, too, technology can play a role. Firms can make the source text of the tax changes available through an organized, searchable platform, where front-line experts can easily seek out how the new rules will impact specific clients with simple keyword searches.

They can also field a team to build widgets such as tax calculators that will help accounting partners plug in real numbers from their clients’ finances to determine the actual impact of a tax change.

Should you try to break the Google habit?

But all those tools can become overwhelming. A senior leader at a large accounting firm told me that his company has more than 30,000 digital assets designed to help the accountants understand aspects of the tax code and perform calculations.

How do you avoid tech overload? Push notifications to alert accountants of the various technical tools available as they are brought online can help. Ongoing training is also essential, though product teams often lament how much time they devote to teaching the accountants about new tools to help them understand the tax code only to have them revert to a Google search.

Here it’s important to note that trying to break accountants (especially younger ones!) of their Google habit is a losing battle. Rather, the in-house technology that a firm develops must work alongside Google. If firms can improve the search engine visibility of their own public content so that it appears at the top of a search, so much the better.

But in any case, a sensible research policy should direct accountants to cross-reference the information they find through Google with the firm’s in-house tax research resources.

Determine which clients are most impacted.

Finally, the challenge of disseminating tax code changes is much more manageable for firms that have detailed and accurate profiles of their businesses. After all, some new rules will affect certain clients more than others. When firms can identify who among their client base will be most impacted by a change, they can alert the accountants about what’s new and how it will affect those clients.

The next step? Have those accountants get on the phone and proactively alert their clients about those changes. Not only will that reassure the clients that their accounting partner is looking out for them, there’s a good chance those phone calls will result in a fair amount of new tax work for the firm.

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