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To take or not to take last-minute clients? January’s question for accountants

23rd Jan 2024
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Sage is the market leader for integrated accounting.

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As January’s home run gets closer, accountants are once again facing the perennial dilemma: to take on more last-minute clients or not. 

With potentially over 3.4 million customers scrambling to file their Self Assessment tax returns (HMRC,  2023) and a million people expected to be last-day filers, there is a temptation for practices to grow their client base and revenue. But at what cost? 

Here are some of the benefits and challenges of taking on last-minute clients in January, as well as some practical tips for managing them to ensure that you have capacity while protecting you and your team from potential burnout.

Pros of taking on last-minute clients

  1. Revenue boost: With HMRC statistics revealing around 5.7 million outstanding tax returns at the start of January 2024, the potential for additional income is significant. Charging £150 per return could mean £855m worth of tax return revenue to be taken. 
  2. Client relationship building: There is every chance that a late filer could be tomorrow’s loyal client. By assisting in a pinch, accountants can build a relationship that may flourish into a lucrative, long-term engagement. 
  3. Streamlined onboarding: Modern tools like GoProposal by Sage, the pricing and proposal software for accountants and bookkeepers, can simplify the onboarding process, reducing the administrative burden and making the addition of new clients more feasible.
  4. Market positioning and growth: Accepting late filers can position a practice as responsive and client-centric, appealing to a broader market segment. This approach not only attracts immediate business but can also enhance the firm’s reputation, leading to referrals and organic growth.
  5. Opportunity to increase efficiency: In the long term, if you see this as an opportunity to introduce AI and automation tools to streamline the process of handling late filers out of necessity, you can roll out these efficiencies to clients throughout the year and see efficiency gains across your practice

The challenges and considerations

  1. Impact on service quality and quality control risks: The influx of last-minute clients can strain resources and your team’s capacity, potentially the quality of service provided to existing clients. Rushed work might also lead to errors, which could lead to reputational damage and, in worst-case scenarios, legal implications.
  2. Client type analysis: Late filers might indicate a pattern of behaviour that could lead to recurring stress and workload issues in future years, particularly if you spend hours chasing for documents. This raises the question: are these the types of client that your practice wants to attract? 
  3. Regulatory compliance: As the crackdown on Anti-Money Laundering (AML) continues, these regulatory checkpoints are still as crucial as they were in quieter periods. The rushed nature of last-minute engagements can compromise thoroughness in compliance, increasing risk.
  4. Setting a precedent: Regularly accepting late filers might set an unwanted precedent. Clients may start to assume that the firm will always accommodate last-minute work, leading to a cycle of stressful Januaries and potential disruptions in the firm’s regular workflow.
  5. Resource allocation: The most significant challenge is likely resource allocation. Existing clients, particularly those who have been compliant and timely, deserve the highest service quality. Balancing new, urgent work with ongoing commitments can stretch a firm’s resources thin, potentially leading to burnout among staff.

Practical tips for managing last-minute clients

  1. Clear communication and expectation setting: Clearly communicate the risks of penalties clearly to late clients upfront and in writing. Setting expectations at the very start can mitigate any misunderstandings and establish a professional tone from the outset. You might also want to explore a tiered fee structure, where last-minute filings incur a higher charge. This not only compensates for the extra effort but also subtly encourages clients to be more timely in the future.
  2. Efficient workflow management: A well-organised workflow management system is crucial. The ability to track progress and manage workloads efficiently ensures both new and existing clients receive adequate attention and reduces the risk of anything falling through the cracks. With Sage for Accountants and Bookkeepers, you can easily and quickly streamline onboarding, AML, client management and tax returns whilst minimising manual data entry.
  3. Implementing a triage system and prioritising returns: Tacking simpler tax returns makes space for more complex spaces, allowing you to optimise the high-level workflow. To take this one step further, develop a system to triage simple returns or more complex cases. 

If they’re too late: contingency plans

  1. Filing estimates and late filing fees: For clients who are beyond the help of timely filing, guiding them to file estimates and prepare for late filing fees is a pragmatic approach.
  2. Preparing for next year: If late filing looks like a problem across your existing client base, use this as an opportunity to educate clients about the importance of timely filing and the benefits of early preparation for the next tax season. Sharing success stories of clients who filed early and reaped the benefits, such as quicker refunds or lower stress levels, can be powerful tools in convincing procrastinators to change their habits.

Conclusion

The decision to take on last-minute clients is a balancing act. While the opportunity to get extra revenue and expand your client base is strong, it’s crucial to weigh this against potential service quality issues, client behaviour patterns, regulatory compliance, and of course, protecting the wellbeing of your team. 

The key lies in finding a balance that allows your firm to capitalise on the opportunity without compromising on core values or service quality.

Learn more about how Sage for Accountants and Bookkeepers can help streamline your onboarding and workflows here.