A Perfect Match: Choosing Referral Partners That Add Value
Today’s CPAs serve as true partners and trusted advisors to clients, becoming intimately familiar with each client’s growth, plans and struggles. This means that when the need may arise to augment in-house services, most CPAs won’t partner with just anyone. Many CPAs are wary of recommending consulting firms, concerned that an unsuccessful engagement might damage the client relationship. No matter what type of referral partner is being considered — financial services, insurance, 1031 exchange, cost segregation or any other — the CPA firm must do their research and carefully select someone they trust to take care of their clients.
Why Can’t We Keep Things In-house?
Depending on the nature of your firm, maybe you can. However, as the tax code gets deeper and more complex, it’s becoming difficult for all but the largest firms to have every necessary expert just down the hall. For example, cost segregation is a specialty service requiring knowledge of construction methods, engineering and the Internal Revenue Code for fixed assets including applicable tax court cases and revenue rulings. The concept of accelerated depreciation may seem simple, but depreciation law and building technologies are anything but. A detailed, defensible cost segregation study can only be performed by an experienced engineer, and most CPA firms don’t have the volume to justify keeping those niche resources in-house. Partnering with a qualified cost-segregation firm allows a CPA firm to provide a value-added service without keeping engineers on staff.
What Will the Right Referral Partner Do for My Firm?
The right referral partner (RP) will provide new services and financial value to your firm. The ideal RP will collaborate with you in a way that increases profitability and enriches your client relationships, with minimal time invested on your part. Client satisfaction and retention will increase, and the ideal RP will make the process easy for you while strengthening your position as trusted advisor. The ideal RP possesses the following qualities:
- Trustworthy. The CPA must implicitly trust the RP to take care of the client while respecting the primacy of the CPA/client relationship. The ideal RP understands that his or her role is to augment the CPA’s expertise and strengthen the CPA’s relationship with his or her clients.
- Qualified. The ideal RP is a skilled subject-matter expert with appropriate experience and certification.
- Accessible. Good communication makes a good RP. Frequent, transparent communication between the client, CPA and RP that defines goals and roles is key to success.
- Adaptable. The ideal RP will tailor their level of engagement to your preference. In general, clients aren’t one size fits all, and you want an RP that can and will customize their approach. Some CPAs prefer that RPs act like an extension of their staff, while others prefer that RPs be behind-the-scenes players. Some firms want to be involved every step of the way, while others prefer to just be copied on the final product. Whatever your preference, the ideal RP will customize a unique method and will institute a consistent process that meets your needs.
- Consistent. The ideal RP will make sure that their entire team understands the process through education and onboarding that institutionalizes the knowledge and stresses the value of the relationship. With the right RP, you can look forward to consistent processes and outcomes every time, knowing that you and your preferences are valued.
- Candid. The right RP will be candid about what’s best for a client’s bottom line. The right RP isn’t in it to sell something but to suggest strategies that will create a successful outcome. When a RP occasionally says “I wouldn’t,” it means that you and your clients can feel confident proceeding when they say, “Let’s do it.”
- Upstanding. The ideal RP will stand by their service.
Finding the right RPs for your firm might not be easy. You might have to kiss a few metaphorical frogs. But it’s worth investing the time initially to find the right partners, and you’ll know when you do — they’ll make you look great, make your clients happy and make the whole process easy.
Terri S. Johnson
Terri S. Johnson, CRE, is a co-founder and partner at Capstan Tax Strategies. She works closely with commercial real estate owners and accounting firms to provide practical, creative and customized engineering-based tax solutions.
This article appeared in the May/June 2019 issue of New Jersey CPA magazine. Read the full issue.