Consider this question from a staff accountant to a client during a tax planning engagement.
“How much in interest and dividend income do you expect for 2015?”
Silly millennial! He pictures the client poring through a file cabinet of brokerage statements to get us the answer. From the question, you might expect the client to have $20K of investment income. Nope, about $200. What’s the result of a question like this? Absolutely nothing…and the project sits…and sits.
The first rule of asking tax questions is that you have to ask a question that the client can and will answer. Here’s how I changed the question.
“How much interest and dividend income do you expect for 2015, or do you expect it to be about the same as in 2014?”
You and I both know the client has no idea what his income was in 2014, but we don’t really care, since the amount isn’t material to the 2015 tax projection. However, we really do need to ask the question in case his rich uncle died.
The second rule of asking questions is that you must ask the question in terms the client can understand. Here’s the type of question that preparers commonly ask.
“What was the adjusted basis and the acquisition date of the Ford stock you sold in January?”
How many of your clients understand the concept of basis, let alone adjusted basis? What in the hell is an acquisition date? Here’s a better question asked through the client’s eyes.
“How much did you pay for the Ford stock you sold in January, and when did you buy it?”
The third rule is to ask for the answer you really want. I used to see this frequently in our office until we stamped it out by standardizing the question.
“Did you pay any personal property taxes last year?”
Do you really want a yes or no answer? I even used to get this client response, “Should I have paid some?” Here’s how to ask it and get the answer you need.
“How much, if any, did you pay in personal property taxes last year?”
The answer might be zero, and you really want the amount, not a yes / no answer.
If you’re the most experienced preparer in your firm, you might know all of the above. But I’ll bet a lot of others in your office are still sabotaging client answers and killing your average turnaround time for tax returns.
Standardize your questions, and stop the madness. Most of the questions you ask clients, you ask over and over again. Why should everyone in the firm use different wording? Create a standard questions list, with proven wording, that preparers can use.
You can do this either in a shared Word document, or in your practice management system. Your doesn’t have that capability? CPM does.
Thanks for reading!
Frank Stitely, CPA, CVA