Accounting covers a huge array of services, not all of which your firm may provide. When you have a client that asks you for something that’s outside of your scope, how do you handle it? One way is to set up partnerships with other firms to handle that part of your client’s needs. In this week’s Grow Your Firm podcast, we’re speaking with Sylvia Dion of PrietoDion Consulting Partners LLC. Her firm’s specialty is state & local tax compliance, an area that has become particularly tricky since the Wayfair decision changed how state and local tax presence is regulated. She partners with other firms who need assistance with this complex area of tax compliance and talked with us about how her firm handles these partnerships.
Sylvia’s history in accounting
Why you might consider partnering with a firm
How Sylvia’s firm handles payments, updates, and client interactions
Why building a referral network of other firms can help you grow your business
Let’s say you do federal tax compliance. One of your current clients comes in and says that they’ve started selling online and have questions about state and local taxes. How do you do that in a way that delivers a great client experience and without losing your client to a larger firm? While you could hire someone to handle it, another way is to partner with a firm that specializes in a particular tax area. That’s how PrietoDion Consulting Partners grew their firm. They specialize in SALT compliance and offer their services to businesses, including other firms, who need help with this complex area. Their business has been growing a lot since the Wayfair decision, which in essence removed the requirement of having a physical presence in a state in order to be liable for doing business in that state. A major part of their business lately has been creating voluntary disclosures so businesses can avoid liability thanks to the changes caused by this ruling. Many of the firms they work with have clients with multistate contacts and they don’t know the tax implications. When you have to deal with the rules for all 50 states, it gets complicated quickly. Firms can find themselves in over their heads if they don’t have the in-house expertise necessary, so they reach out to Sylvia’s company. A partnership like this can be a great boost to your business. It lets you expand your services and helps keep your clients happy. Let’s look at how PrietoDion handles its partnerships with firms.
The Initial Contact
When working with a firm, they make the introduction to Sylvia and explain the situation. Depending on the needs of the firm and the client, Sylvia will either partner with the company to handle the problem or she will work independently with the client on SALT issues and keep the firm in the loop as needed. The key thing to ask is what can you offer to the table so that both the client and the partnering firm get what they need. If you can work in a collaborative way that makes everyone happy, the chances of future referrals will go up and you’ll get a good reputation for helping out with particular issues. As part of this, she also gives free one-hour consultations with firms and clients so that she can understand the scope of their needs prior to making a bid. Given the complexity of this area of tax law, this makes perfect sense.
How Is Pay Decided?
If Sylvia’s firm is partnering with another firm, she depends on the referring firm to charge enough to pay her rates. She does not charge the client directly in this case. However, if she does contract directly with the client then she gives a 10% discount on her rates for the referral. This makes it easier for the client to pay and it’s a nice gesture to the referring firm to thank them for the referral. Her firm does not do percentage cuts of her revenue to the referring firm, e.g. 20% of her fee goes to the referring firm if they send her a client. This lets her keep her revenue strong for her specialized services and doesn’t undercut their value.
Sylvia keeps her firm flexible. She is the main point of contact, but she works out with each client and firm on communication styles. Some firms want a single person to do all the communication with the firm. A larger firm may allow anyone to reach out to Sylvia. Part of her advisory services package is to teach others about SALT issues, so having an open communication style helps her do that part of her role, along with her blog and column writing.
Updating The Firm
In addition to talking with the client, the partnership firm also needs regular communication based on their needs. She prefers to use email for this. She will CC her CPA contact whenever she sends the client finished work. Along with that, she takes the time to explain her analysis and how they can use it to do what they do better, whether it’s for monthly compliance, reconciliation, or whatever the original firm does for their clients. Clients will have different needs as they grow and your firm may not be able to handle all of those needs. By making partnerships with firms that handle areas of accounting that you don’t handle, you can prevent these clients from jumping to a larger firm and start forging relationships that can help you diversify your services. Even if you don’t make a formal partnership, having a CPA you can reach out to for particular issues can be really beneficial. They can serve as a mentor or advisor to help you learn enough of what you need to know what to do for a particular client. Sylvia Dion has kindly offered her email address for any of our listeners and readers to talk about SALT issues or partnering with firms. You can find it in the resources section at the top of the page.