Modernize and virtualize your tax practice: Part 2

By Michael Whitmore, CPA

Editor: April Walker, CPA, CGMA

In the midst of the second tax season dealing with COVID-19, the global pandemic has continued to cause disruption in the management of a firm's tax practice. Rethinking all aspects of tax practice is critical to continue to thrive during these unprecedented times. As a vaccine is distributed, the hope is that someday soon the country will be operating on the other side of the pandemic. Even with that optimistic stance, evolving the current tax practice into being more "virtual" still makes a lot of business sense. Firms that can think outside the box in terms of growing the client base will emerge healthier.

Part 1 of this column discussed challenges in dealing with clients and others in a virtual practice and provided suggestions and recommendations to overcome those challenges (see Lagarde and Cutrer, "Modernize and Virtualize Your Tax Practice: Part 1," 51 The Tax Adviser 816 (December 2020). Part 2 focuses on maintaining and sustaining firm growth in a more virtual way. Traditional marketing services (such as in-person proposal meetings, taking clients and prospective clients to lunch, and chamber of commerce mixers) may still not be commonplace or advisable in 2021, but there are different strategies to consider to help grow an accounting firm.

Focus on key clients and prospects

While one strategy might be to try to hold on to all clients during this uncertain time, since 2020 tax work is currently underway, this could be an ideal time to evaluate clients. And while considering current clients, give some further thought to what an ideal client looks like for the firm.

It might be helpful to remember this paraphrase of the classic line from George Orwell's novel Animal Farm: "All clients are equal, but some clients are more equal than others." Reviewing the firms' client list and categorizing them into A, B, C, and D groups can clarify which clients should be the focus of time and resources.

Here are some characteristics of these classifications to consider:

A clients

  • Top clients — make up 50% to 65% of firm revenue.
  • Multiple services are provided.
  • High realization.
  • Easy to work with.

B clients

  • Good clients, but are probably being underserved — they usually make up about 50% to 60% of your clients.
  • Differ from A clients in one or more ways — maybe only one service is provided, or the type of work is less profitable.
  • Time and energy necessary to turn these into A clients.

C clients

  • Likely are good clients, but, generally, they generate a small amount of revenue and do not have big growth potential for other service opportunities or as a source of referrals.
  • Low focus from a business development standpoint.

D clients

  • Require a lot of time and attention but do not generate a large percentage of revenue.
  • Strongly consider terminating the relationship.

Free client evaluation tool

The AICPA Private Companies Practice Section offers a free client evaluation tool for AICPA members that can assist a firm in ranking its current clients. Focusing on this effort will help a firm plan its business development activities appropriately.

Don't forget about referral sources

As you are thinking about classifying clients, remember to include key referral sources (whether they are clients or not) on your A list. These referral sources, such as attorneys, bankers, financial advisers, and former employees, should be included in your business development planning. Be sure that you are able to describe the characteristics of your firm's ideal client and why your firm is best suited to serve this type of client.

New needs, new services

Consider businesses' new needs of trying to operate in a new business environment. By advising and assisting clients in overcoming obstacles, a firm continues to be a critical component to their business rather than just another expense to budget. Firms likely already pivoted in this way during the Paycheck Protection Program application and forgiveness process. Businesses are still going to be in recovery mode during 2021 and beyond — so think about how you can assist in that process. Cash flow and budgeting projections, debt restructuring advisory services, and outsourced accounting services are some service offerings to consider. Proactively discussing these services with clients rather than waiting for them to call for help keeps your firm top of mind.

Scheduling business development

Categorizing clients can help reduce the stress and pressure of determining how to allocate the firm's time. Finding time for business development and strengthening client relationships can be challenging. Be intentional with your time. Block off time in your calendar to focus on relationships that grow the firm. During this schedule block, check in with clients and referral sources. Due to COVID-19, you may not be able to meet in person or gather for lunch or other functions with clients as you did in the past. Now it may be necessary to think a little outside the box.

Some ideas to consider include:

  • Schedule lunch delivery to arrive for you and the client at the same time so you can have lunch together virtually.
  • Find a place to meet outside for lunch or coffee.
  • Schedule a walk at a local trail to connect and catch up.
  • Coordinate a virtual happy hour with a small group.
New ways to market (to current and future clients)

With new barriers to meeting in person with clients and perspective clients, it remains important to stay connected with individuals who help grow your business or are key prospects. Use technology to stay in front of these key audiences.

Consider some of these ways to stay connected and relevant:

  • Webinars can be a way to provide updates on the latest information, with a focus on advisory and other services. These could also be recorded and posted on the firm's website.
  • Provide a callout on the firm's website highlighting continuing COVID-19 relief efforts.
  • Blogs and newsletters can provide helpful and current content. Remember that consistency is important with blogs.
  • Targeted emails can draw further attention to upcoming events (webinars, deadlines, etc.).
  • Social media is another potential touchpoint that, used correctly, can help humanize the firm.
  • In a coordinated marketing effort, all of these methods can build on one another (social media posts can drive people to blogs and the firm's website, for example).
Website updates

With more business being transacted virtually, more eyes are on your firm's website than ever before. Be sure your branding is modern, fresh, and current, and, if not, make plans to move in that direction. In the author's experience, most potential clients at least take a look at a firm's website prior to entering into a business relationship. And an outdated and hard-to-navigate website does not make a good first impression. In this area, it will likely be best to contract with a website developer who can help you make the most of the firm's digital presence.

Analyze which methods work

It can feel overwhelming to try to implement new marketing strategies on top of trying to stay current with ever-changing tax legislation. Taking a step back and thinking about what will work best for your firm is important. You could also survey clients and referral sources to see which methods most resonate with them. Considering what competitors are doing is also part of the puzzle. There are also methods and tools to help you analyze data to determine how your marketing is performing. Take a look at Google Analytics, for a start.

Making it personal

In a classic episode of the television show The Office, Dwight Schrute steals Michael Scott's Rolodex, which contains personal notes on all of Michael's clients. Dwight begins to meet with Michael's clients and attempts to use the information in the Rolodex to build relationships and credibility with the prospects. Unknown to Dwight, the Rolodex lists topics never to bring up with each client. Dwight is quickly embarrassed, and Michael joyfully keeps all of his clients.

Despite Michael's quirks as a salesman and a leader, he is good at remembering what is important to his clients. Similarly, for your business, remembering important dates such as anniversaries or birthdays goes a long way. Sending a personalized card for a milestone shows that you value the relationship. Your firm may have CRM (customer relationship management) software to help track client preferences and special events, but it may be underused. In these challenging times, it is important to stay top of mind with those A and B clients.

During the pandemic, you may not be able to meet for coffee, but, if you can, send a gift card for your client's favorite coffee shop, along with a note. A client recently told the author a story about a financial adviser trying to win the client's business. During casual conversation, the client mentioned that he collected antique cuckoo clocks. A week later, the client received a package with a personal note and a book on the history of cuckoo clocks. The book itself was not unusual, but the small gesture was enough to prompt the client to move his substantial portfolio to the adviser. Attention to detail matters.

With the growth of artificial intelligence and machine learning, tax practices are being commoditized more every day. The profession needs to shift its mindset. Rather than considering themselves to be in the tax compliance and planning business, CPAs need to be in the relationship business — trusted advisers. Personal touches are the hallmark of any successful relationship. In a time of social distancing, personal touches are still extremely important.

Encouraging younger staff

Speaking of being in the relationship business, it is important to remember that relationships are not built overnight. They take time and effort to develop. Encourage new staff from early in their career to build relationships. Making strategic investments in business development training can pay big dividends in the future. Consider providing a financial incentive for staff to generate new business opportunities, or encourage business development activities by including incentives as it makes sense. Reach out to see if new staff would like to write blog posts or participate in firm webinars. Brainstorm with everyone in the firm on new and innovative ways to bring a personal touch to reaching out to clients.

Relationship building in a virtual world

Building current client relationships and attracting future client relationships is certainly more challenging while still operating during the pandemic. Change is difficult. But exploring different ways to build those relationships in the virtual world will likely reap rewards in the future. To learn more, listen to the "Modernizing Your Practice" series on the Go Beyond Disruption podcast, available at



Michael Whitmore, CPA, is a shareholder with HMA CPA PS in Spokane, Wash., and is a member of the AICPA Tax Practice Management Committee. April Walker, CPA, CGMA, is lead manager—Tax Practice & Ethics, Public Accounting, for the Association of International Certified Professional Accountants. Ms. Walker is the staff liaison of the AICPA Tax Practice Management Committee. For more information about this column, contact


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