At the height of a busy tax season, it is understandable should a CPA experience feelings of burnout. Combine that pressure with a pandemic that has surpassed a full year, and it would be surprising if one did not go through some internal turmoil. To discuss ways for CPAs to prevent getting run down by their many responsibilities, we reached out to Loren Fogelman, price and profit coach at Business Success Solution. For more information, feel free to check out Loren’s time management tips for busy firms.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

Two weeks ago on CPA Conversations, we covered the importance of monitoring CPA mental health as the pandemic creeps past its first full year in existence. However, even if there were no pandemic, when tax season hits the height of full activity, it's easy for any CPA to experience feelings of burnout. To discuss ways to make sure that you don't get too run down this busy season, today we are talking with Loren Fogelman of Business Success Solution. She is a price and profit coach for accounting professionals, and we are happy to have her here today.

What would you say the reasons are that CPAs experience burnout during tax season?

[Fogelman] I think that CPAs overall are very, very hard workers. They put a lot of effort and energy into the work that they do. They want to make a difference to their clients and they absolutely can do that. But some of the reasons that they experience burnout specifically during tax season is because they are service-based professionals. As a result of that, so many of them may say “Yes” when they really mean “No.” It's because they don't want to disappoint their clients or let someone down, or maybe end up in what might feel like a confrontational conversation. They need their clients. They don't want their clients talking bad about them. But what happens is a lot of times there are clients that are uncomfortable talking about taxes. It overwhelms them and their clients might procrastinate and, as a result of that, you'll have those clients that always show up at the last hour wanting to have you make time for them, get the taxes filed.

When you say “Yes” to that, it interferes with your already busy schedule and workflow. What happens as a result of saying “Yes” when you're already busy and trying to squeeze them in is now you might be adapting to their process of how they want you to work with them instead of them adapting to yours. That's something to think about. Are they coming in with a bag of receipts? Is it possible that they haven't had their books kept all year long and now they need their books cleaned up first before they can even file taxes? Those are some things to think about.

But the other thing too is that you might continue to be seeing yourself as a technician in your role, as opposed to a CEO firm, and this applies even if you're a solo practitioner. But the bottom line is you might be spreading yourself too thin, agreeing to work outside your scope, starting to feel that burnout, and when that happens, there might be resentment, there might be cynical thoughts. The main thing is it is not sustainable during tax season or any other time of the year.

One of your tips for avoiding burnout during tax season is setting those manageable guidelines and saying no to clients when they have unreasonable requests. How can a CPA do that without running afoul of the client?

[Fogelman] I'm going to break that down into two parts of the answer. The first is how that happens and then what your choices are. How this happens is, first of all, you decide whether you want to run your practice, or if your practice runs you. Who is really in charge and making the decisions? Once you decide that you want to run your practice, then determine what your guidelines are. Just like processes give you freedom, systems give you freedom. Determine your guidelines and really set ones that you feel comfortable and will make your workflow a lot easier as far as efficiency and effectiveness. Once you set up those guidelines, communicate them to your clients. Let them know. It might be in the beginning when you're sending out your tax planner or sending them a letter regarding tax season and scheduling. After that, you want to, also if you're doing work agreements, include your expectations in your work agreements as well. That way you know that they are being informed in a couple of different ways about your workflow and your policies.

Then the last part of that is stick with your policies. Now, we all know there's going to be a couple of clients who never read the email. They appear right before the tax filing deadline. They'll share their reasons of why this is such a crisis, and they want you to buy into their crisis and squeeze them in. When that happens, now you have three choices. You can either say “Yes,” where you're going to go ahead and adjust your workflow to accommodate them. But realize that when you do this, you're teaching them that your guidelines are actually suggestions. They're not really policy. That's the first thing. So, they're negotiable. The second option is to say “No,” remind them of the policy and let them know that you will file an extension. To be caring about their story, but you don't have to buy into this story. You can just acknowledge it, but then stick with your guidelines.

Then the third one is to adjust your rates as a tax deadline approaches. Basically, clients that get you everything in February receive the best fees, the fees go up in March, and once we get to April, it is premium. I would say it's similar to surge pricing with airlines and hotels. The closer you get to that date where you have to get that last minute seat on an airline, you're going to be paying a premium price to sit in the middle of two other people in coach, and it might be the same fee as someone who booked earlier and is sitting in first class. So, you can actually go ahead and do surge pricing with your tax work as well. Those are some of the things to consider. You can say “Yes,” you can say “No” and remind them of your policies, or you could do surge pricing and adjust your fees as you get closer to the deadline.

Another tip that you offer, and I definitely want to make sure to mention that these tips came from a great article that you wrote for AccountingWeb, which is called “How to Avoid Burning Out during Tax Season.” But another tip you offer is “avoid confusion.” Make sure what you say to clients and what you do aligns, right? Can you tell us a bit more about how CPAs can best accomplish that?

[Fogelman] The first part I want to give you is a little bit of an overview where we communicate in so many different ways. We communicate with our words and we communicate with our actions and our body language. When they are not on the same page, what you do has more relevance than what you say. Because you might actually unknowingly be giving some mixed message where you're saying one thing, but then you go ahead and you negotiate, you're flexible, you say “Yes,” once again, when you really mean “No.” If that is going on, where you might be giving confusion and you're not being firm, then you want to ask yourself if you feel that what you're saying and what you're telling them are guidelines that might be two different things. Once again, as I was saying, your actions give the truth. But I'd like to give an example as to how one of my clients went ahead and applied this.

Let's call him Jeff. He's a CPA, and just like so many CPAs, he had a prospect come to him that had this urgent IRS tax filing deadline. Well, because it's already the middle of tax season, Jeff was saying that to prepare his return and to get everything filed in time for this client's needs it was going to mean adjusting his busy schedule, and he quoted a premium fee for the rush job, just like I was saying that you can do with surge pricing also. At that point, this prospect attempted to negotiate the rate. He decided to go ahead and shop around the price. He found someone else who was going to do his return for half the price, which was fine with Jeff. But the real takeaway was that Jeff stood by his rates and resolved that he had this insight. He realized that caving into this new client's demand would actually lower his rates and would teach this person that Jeff's rates were negotiable.

As a result, this client would always want to negotiate on the fees and that's not the type of client that Jeff wants to be working with. The other thing to realize, and Jeff got this insight also, is that by having a premium fee that also guaranteed a fast turnaround it’s similar to what FedEx and Amazon Prime do. They charge the speed of delivery and people will pay for that when that is of value to that. But the bottom line is Jeff is teaching his clients how to be a good client and that he is really taking charge of his practice by doing so. If this is something that appeals to you and you want clients to respect your boundaries, then your words need to be in sync with your actions.

Say what you mean and be willing to stick by it. Not everybody's going to agree, and even if they don't agree some of them will go ahead and follow through anyway, and some of them will move on. But those clients that move on were probably your headache clients anyway, or they were very, very price-sensitive and didn't value what you did for them.

One of the tips here is you advise CPAs to not be too hard on themselves if they end up violating their own rules that they've set up. What does it mean to not “throw in the towel?”

[Fogelman] I think that with anything new that we attempt to put into place, there are going to be some mistakes along the way. You might have a setback where you go back to an old way of doing things. Think about when you first started your CPA practice, your accounting practice. I am sure that some of the things that you did then, you wouldn't even think about doing that now. You would be just horrified about doing something like that. Therefore, it is a learning process. You need to give yourself a little bit of slack as you start to create new boundaries, because maybe you really haven't had boundaries up until now. But you are burnt out, you're exhausted, and your current way of doing business is not working for you any longer. You want to take back your personal life again.

That is the first thing: give yourself some slack, that therefore there might be times that you do loosen that upper boundary or you cave under pressure. Do not be critical to yourself where in your own head you are being mean, you call yourself names, you are just putting yourself down. That is not going to benefit anybody. That's why you need to go back and listen to the last podcast about mental health. Then, if that happens where you've made these mistakes, you went back to your old ways, once you realize it, instead of quitting and just saying, "I can't do that, this isn't meant for me," go ahead and gain insight as to why you actually caved in and you went back and you actually bought into somebody else's story instead of sticking to your guidelines.

Setting boundaries is a process, but I'll let you know that once you set boundaries in your accounting practice, they actually overflow into your personal life also. Earlier this week, my coaching group of accounting professionals that I meet with and work with, we were on a group coaching call and one of the things we were actually celebrating was the fact that they are lowering their tolerance levels. This means that they are no longer making exceptions for clients that keep data on Excel spreadsheets, or continue to use Desktop when they've moved all their other clients to QBO. They are not going to be working with those exceptions any longer. They'll have a conversation with these clients. If these clients decide to adapt to what is in their best interest and works for them as far as their workflow, they are happy to do that. But if they're not willing to adapt, then they are welcome to let those clients go and move on and find another CPA firm to do their taxes and accounting work for them.

If a CPA faces a difficult decision as to whether to stick to the guns of the busy schedule that they already have set up or adjust that schedule for a client request, are there any effective processes for weighing that decision? Anything concrete there?

[Fogelman] This is really, really easy and if you are keeping notes on your yellow legal pad or in your spreadsheets, this is from Suzy Welch. W-E-L-C-H. Basically, she developed what's called the “10, 10, 10” method for difficult decisions. It's asking yourself three questions. Number one, what are the consequences of my decision in 10 minutes? Question number two, what are those consequences going to be in 10 months? And number three, what will those consequences be in 10 years? This way you're not just looking at the immediate impact, but you're looking at long-term implications too, because if you might be setting a guideline, setting a boundary with someone, they don't agree with you, they might be moving on, that might be really critical in this 10 minutes of what's going on, but will it really have an impact or how will it have an impact on your life and your practice in 10 months or possibly 10 years?

This is like looking through the viewfinder of a camera and you're giving it a wide-angle lens instead of a zoom lens.

We're in the thick of tax season as we record and we're going to be getting this out really quick so it can benefit people, but there's also talk of the fact that there might be an extension of the tax deadline. A lot of these things are going to be able to be put to use this tax season. But for next year, let's say, are there long-range steps CPAs can take to ensure that they can reduce the chances of tax season burnout?

[Fogelman] One thing that they could do this year is if somebody's coming in at the very last minute ... I mean, we're in March already. You could start to adjust your pricing and give a 10, 20, even 30% increase for surge pricing and people coming in at last minute. Therefore, there is something you could be doing this year if you chose to. But I would say as a firm owner, I don't think that tax season is very friendly for CPAs that are doing taxes and they are actually in the trenches. Therefore, I want to challenge that maybe there's a better way to do things. I've seen a lot of tax professionals that are following my protocols where they're not burned out next tax season. One of them wanted to go back and start playing golf again. She started doing it during tax season, taking Fridays off and playing golf because of the fact that she was going to be more effective as well as efficient in the way that she worked with her clients.

If that's something that appeals to you, I would say let's look forward to next tax season, and if you have clients that are sending things to you early, do early-bird pricing with them. Let them know about that, set your guidelines, teach them what's going on this next tax season. But one of the things that a current client is doing is he decided in November that he was going to change this tax season around and start to take charge of it. What he did is he sent them a letter and it was in their tax planners as well about how he wanted to encourage them to prepay for tax season and getting their taxes filed and that if they wanted to reserve a date, that he was encouraging them to prepay and reserve a date with him to have their work done.

Well, about 50% of his clients actually prepaid in December and January to reserve a date because they absolutely loved working with him and his firm. But by having 50% of his clients going ahead and prepay, first of all, it gave him a cash influx that he normally wouldn't have had until after April and it allows him to plan better for his workflow during tax season. Now, this was phase one for him. Phase two that he's going to be putting in place for next tax season, the 2021 tax season, is that he's going to be enrolling all of his clients into packages where they can opt into a package that best suits their needs, they're going to be prepaying for their taxes throughout the year rather than getting an after tax season invoice where they need to be paying him all in one big chunk.

This way, we went ahead and we carved out three different package options for them. They choose a package that best suits their needs, and they will be paying him monthly throughout the year. That way it makes it easier for them, it allows them to budget instead of getting an after tax season invoice, where it's a big chunk for them, and it's a win-win on both sides. That's something to think about. He sent a preseason letter and 50% of his clients opted to prepay to reserve a date for taxes to be done this year. Next day, he's rolling all of them into packages, and they will all be prepaid before taxes are done.