Ignition: The Spark You Need for the New Year

REFLECTING ON THE NEW YEAR

As you know, tax season is upon us. If you haven’t already had clients and prospects making contact with you, you will soon. This year is not without challenges: BOI reporting, congress contemplating retroactive changes, and a shortage of tax professionals. As we look around our tax professional community, we see many of our fellow tax pros are burned out, or are promising this year will be different, or just looking to make changes. 

Maybe you want to make changes, too. One advantage to owning your own business is that you can make adjustments when you want. Yes, it can be scary. None of us want to lose clients; however, sometimes losing a client makes room for a better client.  Most of us have a sense of what the profile of our ideal client looks like. What’s yours? 

As you think about what you want for your clients and your firm, remember that there’s not one single way that’s best. Sometimes tax-pro conversations–particularly those on social media–suggest there’s only one right way to run your firm, and anything else is wrong. Here’s the truth: social media narratives are meant to generate appeal and flatter the creator. It is easy to convince yourself that you are doing things wrong when you look at social media as absolute reality. It isn’t. None of us has it all figured out, and each year we all engage in some trial and error. 

MY EXPERIENCE STARTING IN WITH IGNITION 

I’ve had two years’ experience with Ignition, my firm using this all-in-one business software for proposals and engagements. The first year we used it with a few clients, and it worked well. In most cases, we didn’t collect our fee up front, as I was concerned that this would be a turn-off to clients. The second year, we used it for all tax return engagements and collected our money up front about 95% of the time (only one client pushed back at this, and it was one who had a less-than-stellar payment history). This year we will collect all money up front–-no exceptions. While this might seem like a scary choice (nobody wants to lose clients), if a client feels that payment in advance is a problem, then we’re not a good fit. 

The Good 

The beauty of Ignition is in its simplicity. It just works well and is visually stunning. In setting up the customer interface, you upload a brochure for your firm; Ignition can even create this for you with your input (templates are available for use or simply inspiration). You have the option of payment collection upon signing or later, or you can trigger payment collection manually. Ignition shows you when clients view their proposal (lessening the likelihood of the “I-never-got-this” client response). Like any time you engage with new software, you might have questions that arise, and Ignition shines here. Simply click the ignition logo in the bottom right on the platform, and a chat window opens. Assistance is usually available immediately; if not, they answer quickly. The Ignition team checks in with you throughout the year, letting you know about valuable features and upcoming webinars. 

The Not-So-Good: Pricing

We all want to get paid for what we do, and Ignition is no exception. It isn’t cheap. The lowest plan is $1188 a year or $125 a month. While this may work for you, it wasn’t an option for me for two reasons: my firm has more than 25 active clients, and I need more than one signature on proposals. The middle plan–-$2388 a year or $199 a month—is what works for me as it allows for up to 500 active clients and two signatures on a proposal. Plus, this middle plan has a discount on credit card processing fees. Fortunately, Ignition is transparent about its pricing and plans; read more here: https://www.ignitionapp.com/pricing. 

To Charge or Not to Charge: Pesky Credit Card Processing Fees 

Speaking of credit card fees, you now have the option to pass them on to the client, a hotly debated topic on X/Twitter a while back. Tax pros are split on passing on credit card fees to clients. While I won’t tell you that charging this kind of fee is wrong (we can all run our practice how we want), I will never do this. I’m against the concept and hate it when a vendor surcharges me for this. In my mind, this is the cost of doing business.

Engagement Letters

Before we used Ignition, we’d send out an engagement letter, get it signed, complete the work, and then send an invoice. Yes, we got burned a couple of times. Ignition has reduced the headaches around dealing with accounts receivable, making sure we have signed engagement letters for all work before we perform it. 

You might ask: How do I know what to charge? What if there is a surprise when I’m doing the return? Certainly, we all know the client who says, “My return is very simple. I only have a W2,” leaving out the information about their five foreign bank accounts and crypto investing. To accommodate for these kinds of revelations, our engagement letter states that anything outside of the proposal is subject to an additional charge. 

With Ignition, you can highlight parts in your engagement letter. For example, I highlight our communication policy to emphasize these details for my clients. (In case you’re curious, it says: “All calls must be scheduled. Emails are typically returned within 24 hours during business hours. We are closed the last two weeks of the year, but emails are monitored for emergencies.” The closing of the last two weeks of the year is something I decided on recently. Between Christmas and New Years nothing is happening, and I like to do some planning for the new year after I’ve done my Christmas shopping. If I'm honest, I’m still working just not doing client appointments.)

All in all, Ignition’s cost is well worth it, saving my firm countless hours and forcing us to stick to a process. This alone has increased revenue. 

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While this article has been a little light on the tech and more on the tax practice management side, I want to remind you that change is hard and can be scary, but it is essential. When I first started out, I made most of the classic new-firm mistakes: I charged too little, gave discounts, and felt sorry for people. I looked at how much time I spent on a client instead of the value I was bringing. No one should be working 100 hours a week and doing $100 tax returns unless you enjoy that. Time, experience, and learning to value myself taught me I needed to make changes. You can, too. 

Charge your worth, and enjoy your life. If you drop dead tomorrow, your clients will replace you—your family and friends don’t have that privilege. I can’t take the credit for inspiring all the positive changes in my firm. I attribute much of my growth to what I learned in “Tom’s Inner Circle” — I highly recommend you check this out if you want to increase your technical tax knowledge and gain valuable insights on how to have a successful practice. 

As always, if you have any questions about any of the topics I’ve covered, please reach out to me. No one is paying me for my recommendations in this article. I paid the renewal price for Ignition a couple of months ago, and I’m enjoying how easy it is to send out renewals!