Thoughts on this?

[kcjenkins]

http://www.accountin...1496a:&st=email

A new Web site aims to establish a competitive bidding system where tax preparers can compete for clients.

[Lynn EA USTCP in Louisiana]

I would never do this - it is not in my best interests to enter into such an agreement. Sight unseen I never quote a firm fee; I might give a fee range, "$xx - $yy, or more depending on circumstances". This might be an option for those just starting out in this business, in an attempt to build their client base, but as a well established tax professional, this type of arrangement would not fit my business model. These days most of my new clients are from direct client referrals.

Lynn Jacobs, EA

Enrolled Agent

Civil Law Notary Public

Kenner, LA

[rfassett]

I agree with Lynn's comments. And I would add additional commentary and suggest that this is just another attempt to prostitute the tax prep business. Tax preparation is becoming more and more a commodity at the lower level and spreading to the middle level prep work. Fortunately for many of us, there is still a need for non-commodity prep work. And that is where my practice will continue to reside. I probably have a half dozen clients that might sign up for such a service, but they are not my mainstay clients. If my practice ever gets to that level of commodity brokering, I will get out of the business because it would mean the business and the work I do for my clients is no longer challenging.

[Catherine]

No way. Ever. I am not interested in entering a bidding war for clients who will then expect top-notch service for cut-rate pricing (and despite their site's words to the contrary, that is what it will devolve to).

I've told people over and again over the years, "You can get your taxes done cheap, or you can get them done right. Your choice, but you only get to pick ONE."

I will also note that, over the years, the _only_ people who have "stiffed" me are ones to whom I gave a super-deep discount because of some temporary but legitimate reason/sob story or other.

[Tax Prep by Deb]

No way. Ever. I am not interested in entering a bidding war for clients who will then expect top-notch service for cut-rate pricing (and despite their site's words to the contrary, that is what it will devolve to).

I've told people over and again over the years, "You can get your taxes done cheap, or you can get them done right. Your choice, but you only get to pick ONE."

I will also note that, over the years, the _only_ people who have "stiffed" me are ones to whom I gave a super-deep discount because of some temporary but legitimate reason/sob story or other.

Same here!

I am always up-front with clients, I tell them that they can get it done cheaper, but if ever there was a problem, concern, ect.... how easy would it be to get in touch with the cheaper preparer? They can call me at any time and know I will do what ever I can to help. I also get stiffed from time to time with a client or two that I've done a favor for. My fix for this is not again, and I will only work for them again when I'm paid and I expect payment up-front before I even begin.

Deb!

[Guest Taxed]

Some of us are our own worst enemy! I have seen many tax preparers trying to undercut the other by lowering their price, or bad mouthing the other just to get a new customer. I get questions from new customers (will you take competitor's coupons, or will you match their price). I am always careful when i quote a price. It is a range, but I do say that I will give them a firm quote once I review all their documents and do my free initial consultation. If they don't like the price quoted, they are free to leave without any obligations. I have learnt over the years that a customer who is always looking for the cheapest price, really does not appreciate quality work and if your business model is quality work it is not the right fit. Several years back i acquired a new business customer via a referral who is in the business of designing and operating websites for commerce. He wanted to design a website for me where I could do taxes online for my clients, market my services nationwide etc. I politely refused!

[jainen]

>>entering a bidding war<<

I don't think it is an auction. Lots of industries are setting up online searches for easy marketing to our mobile society. I mean, if you can find a DATE online, that's got more individual variables than any tax return I've ever seen!

We never know about any one new client, but in fact many taxpayers have simple tax returns that are similar to the prior year. Others may be looking for a specialty like N.O.L. or small LLCs. More models of competition is a sign that our economy is changing. So I'd give these guys a year or so to sign up some large firms who will demand the usual sophistication--customer privacy, protection from price-fixing, links to preparer web sites, reliable rating system, etc. It might catch on.

[Lynn EA USTCP in Louisiana]

This subject is also being discussed on another webboard. Sign up fee is reported to be $500. It looks like the business plan is to provide bids for tax prep. The purpose of taking bids, of course, is to drive down the cost to the client.

Payments pass through Prosado, & Prosado acts as intermediary in disputes between preparer & client.

It's not clear whether the brokering by Prosado is indefinite going forward.

I stand by my earlier post - I still take a pass on this one.

Lynn

[Jack from Ohio]

PASS!!! I do not need clients that badly. If a client shops you for price, next year he will shop again for price. Lose Lose

[taxxcpa]

This reminds me of someone who asked what I would charge them. I gave them a pretty low estimate, and they replied, "That's pretty steep. I only paid $ 15.00 last year." Apparently they thought it should only cost $10 or less.

[kcjenkins]

It did not sound good to me, but no doubt there will be some people who will try it. I don't doubt, though, that they will regret it.

[Guest Taxed]

I was talking to an old friend and she said that her daughter saw a blog or ad about this service on twitter. So she registered just for fun because it is free for the customer. They require you to fill out a questionnaire and list your tax documents to get a bid from a participating tax preparer. Once the tax return is filed and client approves the payment is released to the tax preparer minus a 10% commission. My issue is how does the client and tax preparer interact when there are issues or missing documents. What if you find out after accepting a case that it requires more work (the shoe box full of receipts)?? I can see lot's of misunderstanding with an arrangement when you don't get a chance to meet the client and discuss issues upfront before starting the prep. Perhaps it may work for the clients with 1040EZ or 1040A, but then they can always do it themselves on the many "free" online prep sites.

[StanP]

I'm always intrigued by new marketing ideas because picking up new 1040 clients from internal referrals has always been a long and slow growth road. I checked out the website and went through the FAQs. Most of this is mentioned on there. I wonder if people will choose the lowest bid or go with someone they feel is right for them, even if it costs a little more. I get new business from website searches each year and often I'm not the cheapest but people pick me anyway. Maybe that will be the same case here. Got nothing to lose by trying but I certainly won't be bidding any crazy low amounts.

[jainen]

>>won't be bidding any crazy low amounts<<

I'm sure the crazy low amounts will not be legitimate, just like mortgages or insurance or car rental--look at the on-line comparisons for any product or service. The main thing (from a marketing perspective) is to get potential prospects to click on your link, where you provide all the details. I don't know if anybody has noticed, but not every company has the lowest price in any field. Usually it's just the companies that nobody would go to otherwise.

[JohnH]

Agree.

Buying quality is like buying oats.

For a reasonable price I can get you good-quality oats.

But if price is your only concern, then for slightly less cost I can get you oats which hace already been through the horse.

[kcjenkins]

Stan, if you have not already done so, look in the forms list for 'Client Referral' and check it out. It's an easy way to increase the number of referrals you get, and to also let you keep up with who your best 'referrers' are. Those folks should be on your special Christmas list for some small gift, just so they know that you appreciate them.

[tetspa]

Time for some ugly truths on this topic:

There are some people out there who don't believe we deserve to get paid for preparing a return...that they can do it themselves for free, so the service we provide just isn't worth anything (or not worth much). Then there are the cheapskates, who once a year, get into their car and start driving around looking for "someone to do the return for $ 25 or $ 50 dollars. If they have to spend 10 hours going to 10 different places, they will until "we find someone who will do it for this price"...they see the 10 hours in their car as "the price of doing business".

Sites like this attract these types like honey attracts flys. So yes, they will "race to the bottom" and pick the lowest bidder. And yes, they will pull out 1099's and k-1's that they "forgot to mention" out of their pocket at the last minute and expect you to still honor the quoted price.

The type of clients you really want (or should want) to have will NOT be found through this type of site. Perhaps one good thing is that it will keep those types busy on the internet and keep them off the phones calling real preparers for quotes.

Just my humble opinion.

[Catherine]

Stan, if you have not already done so, look in the forms list for 'Client Referral' and check it out. It's an easy way to increase the number of referrals you get, and to also let you keep up with who your best 'referrers' are. Those folks should be on your special Christmas list for some small gift, just so they know that you appreciate them.

My best clients get those forms -- and a $25 discount on next year's return for every paying referral. One caution: do NOT give those forms to folks who are pains to deal with, slow to pay, or other problems - the friends they send you will be the same or worse!

[kcjenkins]

That is a good point, Cat, They do tend to run in packs, don't they?

[mcb39]

The funny part aout that is that I got more Christmas Cards and small gifts from clients than I did from relatives. Go Figure! I have often had a client tell me that someone asked them who did their taxes and my client said "I would never refer someone like that to you". Sure does make you feel good.

Here's another one. I just recently filed a long time and good paying customer just because she was driving me crazy with her constant demands on my time and other things. What happens, last week she sent me a referral. Again, Go Figure.