Want to help clients comply and make money for simply the referral? Join Eric Green and Frank Tumminello of FileForms as they discuss important deadlines for filing annual entity reports. Discover how FileForms simplifies this process for tax professionals and their clients, offering partnerships and referral incentives. Learn about the costly legal and tax repercussions of missed deadlines, and why Eric relies on FileForms for automated tracking. Don’t let your clients risk penalties or defunct entities – explore the simple solution to state compliance.

Check out file forms here: https://partners.fileforms.io/l/TAXREPNET/

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Boost Tax Pro Revenue: Mastering Annual Entity Filings With Frank Tumminello

File Forms: Business Compliance & State Deadlines

Everyone, thanks for joining us again on the show. He’s been here a few times. Frank Tumminello from FileForms. Frank is back. We talked about BOI. We’ve talked about what was going on with all that craziness. Tax season’s over, Frank. I know I’ve started dealing with this with my clients. Just the annual filings, LLCs, and S Corps. I don’t know that people realize, but FileForms does all that.

That’s right.

We got known for BOI, but the reality is you do all of this. For these accounts that email, we say, “What do you think about, or do you guys do this?” I use FileForm. I wanted to get into that, specifically second quarter. There are a lot of states whose filing deadlines I think are coming up.

That’s right. Whole bunch of big states, in fact. Delaware has a franchise tax due on June 1st. Florida, where we’re based, May 1st is the annual report filing deadline. A couple of states here certainly have some entities to get filed. Broadly speaking, every state has a different deadline. Some states have what we call rolling deadlines or anniversary-based deadlines, which are a little tricky to keep track of in other states. Like we mentioned, Florida and Delaware have more fixed deadlines. Generally speaking, the fixed deadline states will have deadlines in the first half of the calendar year. The rolling deadline states have anniversary dates, deadlines throughout the year. It is a little bit of a calendar exercise every year for folks managing clients or a large amount of entities.

Again, to get into it, one of the things I like about FileForms is I go into the dashboard and I see everything versus I need to remember and now I need to go figure out what deadline is which entity or which client or whatever. I used to calendar of these things. Now it’s just there.

 

 

That’s right. We found a really strong product market fit early on because we could resonate with the experience that is the status quo. We find that people end up having these spreadsheets that end up having tons of different colors on them and a million different dates and columns and rows, and they get stale very quickly because not everyone’s managing the same version. A lot of times, folks will either be conducting business or running their portfolio, or buying real estate.

Before you know it, you’ve got 10, 15, 20, hundreds of entities all managed by different vendors in all the different regions and states. These spreadsheets just get out of hand. They’re too hard to manage. That’s where we felt like there was a huge need for a platform. A single place to manage all your state and federal compliance so that it’s easy to keep track of all these deadlines with the reminders and notifications to keep you aware of the work that’s coming. We try to outsource that work so you don’t really have to think about it.

You talk about spreadsheets. For those of us who do a lot of estate planning and a lot of tax planning, I have entities I’ve set up in Delaware, but they’re doing business in New York and Connecticut. Now I’ve got three different states that all have filing deadlines, all different. You might know that a lot of folks use Nevada. South Dakota.

Again, if you’re doing more heavy estate planning, South Dakota and North Dakota were really attractive because they allowed dynasty trusts and all of that stuff. A lot of capital flows there. You people with entities there. They say, “I had a lawyer set it up. I’m sure they’re on top of it.” Most lawyers don’t. I’ll be honest. There are different degrees. It’s like a CPA. There are some that I just do returns. There are some that really get into planning and sophisticated complex stuff. There’s a big, huge range between them.

There are some corporate departments where they do everything for their clients. For those who have been thinking about public or going public corporations, they keep the minutes, the books, the stock, every transfer is all booked and never, and then you’ve got folks, “That stock book thing, it’s in my basement from 30 years ago. Do you keep minutes?” What are minutes? You got those people. There are lots of folks who assume that everyone else is taking care of this. “My accountant knows all about that.”

Maybe not, but there’s an opportunity for the CPAs. That’s one of the other reasons I wanted to get you on, because for the CPAs that now have just met with their clients, and I haven’t talked about, reasonable cop, S Corp, LLC conversions, all that stuff. This is another opportunity, one, to make sure your client doesn’t f*** everything up. Let’s just be blunt.

Two, there’s an opportunity to get paid simply by making sure that they’re with the FileForms. Either you can do the stuff through FileForms, or you can just offload it. That’s right. Say, FileForms, here’s the client. Client, meet FileForms.” You guys can take care of all of that. Again, for folks reading, what is an annual report? You and I talked about it, you have an annual report. What is that? Is that like an audit? Can you explain to the folks reading who don’t talking about?

What Exactly IS An Annual Report? Business Compliance Explained

Let’s take it a step back. When you initially form an entity in a state, you mentioned Delaware, a very popular state to form, which gives your company the initial registration at that formation jurisdiction. A lot of people will form in Delaware. Now they’re going to have to file in Delaware every single year because if information changes for that business, say the ownership changes or the name of the company changes, or the address changes, for example. Now that businesses will have to let the state know that they have a registered agent that they can receive mail.

It’s a publicly listed address. That’s part of the initial process of forming. You disclose the information on the business, and you elect a registered agent, which is a publicly listed address. Now that the business gets formed. Now, every year going forward, that business will have to file an annual report with that jurisdiction, and that gives the state the most current information on that business. Now, as your business expands beyond that initial state of formation, it basically has to go incorporate at that new state that it’s operating in.

How does it do that? It does so by filing what’s called a foreign qualification. Now that the foreign qualification is pretty similar to the formation process because it also does require a registered agent address. That registered agent address, plus the go-forward annual report requirement, is something that is pretty omnipresent state to state, with very few exceptions. Effectively, the registered agent is going to be a publicly listed address in that local jurisdiction where you are going to be able to collect mail, legal notices, service of process in that local state, and that’s required.

[bctt tweet=”Good standing is really what’s going to allow you to accomplish things for your business.” via=”no”]

That’s not something that’s optional. If you say run a business out of Florida, but have a nationwide footprint, you’re going to need registered agent addresses in all 50 states. You’re going to need to file an annual report in all 50 states. You’re going to have to form and qualify initially in all those states. There are quite a lot of requirements to maintain compliance at the state level. If you don’t file these things on time, the penalties are quite significant.

As we mentioned previously, the deadlines vary state to state, which is the perfect use case for technology. You don’t have to continuously keep track of these things. The unfortunate part is that none of these state portals talk to each other. There’s this need to go literally to each state’s clunky portal to file this information each year. Once again, if you’re operating in a lot of states or you have a lot of companies in a few states, this is two weeks of work.

Every single year, you can count on it. Why not take a proactive step and outsource this to someone who does it every single day, can be guaranteed to save time, can be guaranteed to save money, and can be guaranteed less wear and tear on your resources. You can then offer this to your entire book of clients who definitely have this need. Unlike BOI, there are no exceptions.

For an annual report, just for the folks reading, because I know a lot of CPAs, a lot of VAs are thinking, “The financials, what if we’re not together?” That’s not the annual report. The annual report for Green Smart LLC, they know who the members are, correct, confirm the address, our home address. We have a statutory agent, which happens to be me. That’s it. That’s really about the report, and there’s a small fee depending on what state you’re in. That’s it. If you don’t do that, first of all, they can revoke the entity. I’ve had clients where we’re dealing with the IRS only to find have the IRS comes back and says that the entity was revoked three years ago. I look at them and say, “Haven’t you been filing your annual reports?” They’re like, “What’s that?”

I see it all the time. We see folks come to us, “We want to file for the present year.” We have to circle back to them and let them know, “You haven’t filed in the last three years, and your company has actually been disilluded.” Which is a huge issue because sometimes folks are at the cusp of raising capital or doing a big transaction or getting a bank loan or something like that. Good standing is really what’s going to allow you to accomplish these things for your business.

We’re selling a Ferrari.

Exactly. You can be shifting mindsets pretty significantly from we’re in growth mode to we’ve got to go do a bunch of housekeeping to allow us to get back to growth mode. Why not stay on track the whole step of way?

Real-World Risks Of Compliance Neglect

I have a client of mine in another state calls me up and says, “I need you to set up a Texas LLC by tomorrow.” Like, “You’re now doing work in Texas.” “No.” Do you remember when Ferrari came out years ago with the last true turbo? It’s the aspirated engine or whatever. I’m not a car.

Of course. It’s a piece of art.

 

 

I’m like, “There’s a Ferrari dealer right by where you live. Go get one.” He said, “No, they’re gone. Each of them only got two. The guy in Houston or wherever has one, but he can only sell it within his geographic range. I need a Texas LLC by tomorrow.” We set it up. Now he paid $400,000 for it. He just sold it for 1.6 million. The entity was defunct. The buyer starts balking, saying, “Your company’s defunct. You cannot sell this.”

Now I had to hire friends of mine in Texas to, on an emergency basis, pull strings to get him reinstated, and we got the sale done. I have to tell you he had now had legal fees with the attorneys in Texas, I didn’t charge him anything. He’s a friend of mine. I’d say he spent probably about $7,000 or $8,000 getting everything straightened up to do the deal. Now, he still made 1.6 million. The bottom line is, if you’re raising capital, I got to be honest with you, even if you go to close down, if you have not filed in Connecticut, they’re not going to let you dissolve it.

You need to make all that up with the late fees. No, it is a big deal. I’m willing to bet that for the accountants reading to this, if you think about how many of your clients you think are actually on top of this? More than that, I’d say, “Do any of you think more than 10% are on top of this?” Probably not. This is an opportunity for you. One, again, make sure they don’t screw this up. Two, it’s got to be dealt with.

FileForms has a partnership program with accountants where you can actually get paid for helping your clients. Just deal with FileForms. We’ll get into that in a little bit. You mentioned some deadlines, Frank. Just quickly, any of them, any big one, like Florida, is a big one. Florida it’s a big state. There are a ton of businesses there. Any others that jump out at you that people should know about?

I’ll double emphasize Florida again because Florida’s got about over 3 million operating businesses in itand a lot of a lot of folks post-COVID are moving to Florida, setting up entities in Florida. Florida is a big one. It also has a big buying of $400 if missed. If you have a bunch of entities, 100 entities. It’s a $40,000 liability on your hands. You don’t want to miss that. Also in May, you have Arkansas, Rhode Island, and then in June, you have Delaware and Maine, that are two big ones. As I said, there the rolling deadlines like California, New York, or a couple of other large states that have these rolling deadlines.

Throughout the year, if you operate entities in those states, you’re to be marking your calendars. You’re going to be like, “That asset is in those entities that were filed on that date every year. You’re to have to file on that date for those entities.” There’s an alternative. You can simply put your compliance on autopilot. Our software can actually track all those deadlines for you so that you don’t have to be calendaring these things out every single year. That makes a huge difference for a lot of folks. I would say right now is filing season, and they’ll continuously be filing. Those big states do stand out pretty significantly.

Again, I’m just going to not beat this point. For the accountants, the CPAs are reading. This is an opportunity to make money. I’m going to, so I’m putting on my entrepreneurial hat. If you look through who has LLC’s S Corps, and if you have C Corps still in your clients, of course, there are people who probably should be. No one should be a sole proprietor anymore. You may have people who should be LLCs.

You add all that up, and you reach out to them and say, “Who is doing your annual report? Do you want us to help you with this? We work with a partner, FileForms. They will calendar, they will do this automatically. You don’t want to get fined. You don’t want this thing to go defunct because you’ll find out when you get sued.” When something happens and now you get sued, that is a plaintiff’s dream to find out that the entity, the LLC or the S Corp, that owned the cement truck that ran through the red light and plowed into sixteen cars and killed ten people. We had that here years ago in Connecticut.

That there’s no entity, and now I can sue the owner. Taking care of all of this. There are some accounts like, “I don’t want to be bothered with it.” If you’re entrepreneurial and you recognize this is an annuity, I can get paid every year. This is how you make money. Again, you’re doing the right thing by the client. I’m not trying to tell you to sell something to the client they don’t need. They need this. If they’re already taking care of it. They already got a corporate lawyer, great. I just want to make sure you’re taking care of.

[bctt tweet=”Many companies are brand-conscious, investing heavily in marketing to build their brand. Losing good standing can result in losing your trade name.” via=”no”]

There are a few components of this too, which I think make it an educational information-type conversation where, one, folks might not be aware of it. They could actually be assuming liability by not taking care of it. You mentioned being disillusioned. Businesses could lose their names. A lot of companies are very brand-conscious. They spend so much time and marketing dollars on building a brand. If your company loses its good standing, it could lose its trade name. It could actually have to restart to some degree, depending on whether another competitor swoops in and grabs your name, for example.

I will tell you this, I don’t want to name them. My brother’s in Hollywood, for those people who don’t know that. A friend of his had his entity go defunct while the copyrights and trademarks he had were under the entity. They got bought by a competitor out from under him because it went defunct. It wasn’t in his name. It was in their name. They then went and filed for it. It was a mess. It was a real mess. That litigation might still be going on.

The point is, there’s a lot more than just the headache of I got to pay the $50 or $100, whatever it is, for the annual report. You have this legal entity. Everything that it owns, every contract that it has signed, all of that stuff is now on the line. I have a question for you, Frank, and I want to ask you this. What do you think about Delaware? For those folks reading, years ago, their corporate body of law, not only did they have the most robust set of statutes, but they had a history of case law.

It was comforting for investors because they knew what they were getting. We know what Delaware is going to do. We get it, we understand how they treat multi different levels of shares of stock or whatever it is you were doing. Are you still so hype on Delaware, or is that just they just riding on their reputation?

Delaware Vs. Other States: Choosing The Right Jurisdiction

I think Delaware is pretty expensive to incorporate in, generally speaking, relative to other states. If you’re a corporation in Delaware, that actually requires above and beyond what typically other states do require. You have to break down the different classes of shares, and share thresholds can actually lead to even bigger amounts owed to the state. It’s definitely a state that has a lot of credibility in the institutional capital world or the corporate world, broadly speaking.

It’s definitely the most well-known place to form an entity. I think over time, the word got out and other states wanted to start soliciting businesses and figured out ways in many ways to reap the same benefits of forming in Delaware in their state and doing it a lot less costly. Regardless, that does typically lead to a foreign qualification event because Delaware has about upwards of two million active LLCs in it, but only about 60,000 active businesses operating locally.

You can bank on the balance, really, the lion’s share of those businesses having to then go foreign qualify, which is just another step in the process of considering where you’re actually going to form your entities. There are a lot of costs, there are also a lot of benefits. At a certain point, you want to ask an expert when you’re getting out on this journey, “Here’s my situation, what’s best for me?” Our team is there to help. We have attorneys and CPAs on staff as needed. The technology is obviously used to streamline the filing based on the outcome.

Let’s just go into the foreign qualification. Again, for people who are explaining, “Wait, I thought we were talking about Delaware in like Nevada, what now we’re into foreign?” First of all, a couple of things. I decided what because Frank Tax rep is going public. I’m telling you.

No problem. I believe it.

I’m going to spend five million getting all the SEC, all that paperwork, all that stuff done, and we’re going to go pump. No we’re not. Anyway, the point being, let’s assume we have a business, and that’s what we’re thinking. From the outset, this startup, we think this is going to really go. We’re going to want to attract institutional money. Of course, I’m told, “Go to Delaware.” Now we go, “I register in Delaware, but I’m not in Delaware, I’m in Connecticut.” For the folks reading, I registered in Delaware.

[bctt tweet=”Delaware is definitely a state that has a lot of credibility in the institutional capital world or the corporate world.” via=”no”]

I need a statutory agent, someone physically in Delaware. There are companies, this is all they do. Talk about a whole industry built on this. There are people who are statutory agents. You hire them, you pay them. FileForms can also act as a statutory agent. Basically, I now have to pay some statutory agents cheaper to use FileForms. Some statutory agent, usually a lawyer, who will be your agent, and all they do is get service of process. If somebody sees you in Delaware, they deliver it to the statutory agent. What are they going to do?

Charge you to open it, scan it, and send it to you. That’s what it is. Now I’m going to do business in Connecticut. I’m physically tax rep is physically in New Haven. I need to get approved in the foreign jurisdiction because I remember I’m at Delaware LLC, but I’m going to be doing business in the state of Connecticut. Connecticut is going to have a registration fee, and I need a statutory agent here in Connecticut, which of course would be me. Again, if it’s not me, because maybe I sit in Florida. I’m going to have to hire a statutory agent to accept service in Connecticut.

It’s always funny. I have these people who’ve read about this online, Frank. You guys must get these calls, and they’re going to have the next Amazon. No doubt. It’s such a killer idea, and they got to register in all 50 states. They’re going to all this big, and you start adding up the cost, I get this from doctors. I’m going to set up a Nevada LLC, but it’s got to qualify in Delaware, and it’s going to own an entity because they read online, and I said, “Time out. Why don’t we see if the idea even has legs first? We can set you up in an LLC here.

If this gets going, why? It’s because now you’re making money.” If you’re making money and you’re going to move and start doing business in New York, now it’s a no-brainer. Of course, we’re going to spend the money in New York because we’re making money. Let’s take this one step at a time. The one exception I could think of is big public companies that are going to spin off like a sub. They’re already doing business everywhere. They’re going to just register them in all 50 states and be done with it.

For folks looking at this, this can get very expensive. It can get very complicated. Your client, who’s very caught up in the being-entrepreneurial frenzy, sometimes overlooks this stuff. I’ve had people who I found out they’re doing business for ten years said, “Where’s your registration in New York? I looked and I don’t see it.” They’re like, “We registered in Delaware.” “Did you register in New York?” “No.” “Do you pay sales tax in New York?” “No.” “We have a problem.” We love problems. Anyway, it gets crazy.

Home Address Risks & Junk Mail Deluge: Why Registered Agents Matter

I just want to double-check on one thing, Eric. A lot of folks are working from home these days and age. A lot of folks use their home address as their business address. That’s a bad approach. Maybe not the most pragmatic approach because a lot of people don’t realize their home address is now exposed. Their home address is on Google. Their home address is on the company website. It’s on a lot of different search engines in fact. Why also risk your home address and being your own registered agent? Now there’s a cost benefit to it, don’t get me wrong. You can be your own registered agent in that local state, but is the cost savings of less than a few hundred dollars worth exposing your home address to the public?

As an attorney, I can assure you it’s not. If somebody called me, I’d be like, “Spend the $200 or whatever it is and have the resident agent use their address. If anyone shows up, they’re angry, the apples were rotten, or whatever. Let them go show up there. They can complain. The statutory agent couldn’t care less.” They’d be like, “I’ll take notes. I’ll let them know. Thanks.” You don’t need them showing up at your house.

Post-Tax Season: Streamlining Annual Reports With File Forms

You also, by the way, are going to get the deluge of junk mail. You need the employment posters. You want, I’m trying to think what other should. A certified copy of your LLC articles of organization. I don’t know who wants to take this stuff and frame it, but they’re going to try to sell it to you for $150. All that stuff, let’s go to their office. That touched my feelings. Let’s talk about this. You mentioned now to accountants filing season just ended. For annual reports and stuff, we are getting into filing season.

For the rolling states, it never ends. It just goes year-round. Is there a best time to streamline your agent relationship? I have my thoughts on this. Let me put it a different way. Isn’t this a good time of year for the accountants are now coming off of hopefully a few days of vacation, knowing their deadlines are coming up? To me, this is a great time, this is why I wanted you on, to get your arms around this for your clients. Again, build an entire revenue stream with the partnership, but if nothing else, it’s a good time to at least remind your clients that they need to deal with this.

As folks who worked with us on the Beneficial Ownership Information Reporting, we provide everything clients need for you to share with them. We like to say we give our partners a bear hug because we give them the tools, the technology, the email copy, the templates, the social media assets, and our time and access to our schedules in order for you to educate your clients what they need to know to keep their businesses on track.

Avoid a lot of these issues that we’re speaking about here in the open so that folks can learn from the mistakes that have been made in the past. We can effectively give you everything you need to educate your clients and then allow them to click a button to get compliant, get the support from our team without draining your time and resources, but really building that trust with your clients.

I think you’re going to see there’s going to be a lot of light bulb moments out there where clients are going to be like, “Thank you so much for getting me back on track.” They’re going to save a bunch of time doing it. There’s the possibility that clients are doing this with their attorneys, chances are we’re a lot less expensive than an attorney. Attorneys do great work, but they will charge an arm and a leg for mundane legal work, manual input into a state portal. I think every attorney wants to be doing something more sophisticated than that.

I can tell you. When my clients ask me about this, “If you’re working with like my corporate partners and we’re doing leasing and other stuff?” We’ll do it. You’re already involved in all this different stuff. If it’s one of these set it and forget it type of relationships, we’ve set up the LLC and all that, we send out a reminder, they could hire us, I would rather just direct them to you. Again, to just do an annual report, I will be honest, it’s not worth our time. We want to do. This is work we don’t want. More headache work. Honestly, you’re better off with a portal. Again, for the accounts that the client does want, this is something you can help them with. Again, FileForms will take care of this. They have people who do this all day long.

We also white label our technology. If you want to instill a branded experience that feels very much like you’re looking and feel of your firm. We do white label our technology. We do offer custom pricing and custom bundles. I’ll just re-emphasize. We do everything from the entity formation of LLC’s S Corps, and C Corps across all 50 states. If you need an entity for one of your clients or for your business as it expands, we help with that, and then we put these businesses on these plans going forward so that they don’t have to keep track of all these filing requirements.

They’re getting the notifications to their email. They’re able to interact with our team. You won’t miss a deadline, and you’ll have a single solution to store and keep track of all of these different things that need to be managed. Ultimately, it should save you weeks of work every single year. If you’re looking to serve your clients with this technology, it will create a nice recurring revenue stream, which I think everyone loves these days and age.

Expedited LLCs & Why CPAs Should Reconsider Offering Compliance Services

It is. To answer another question, which I do get, like the Texas LLC. You guys have people from the Secretary of State’s office from these states. I know nothing about Texas LLCs. Now, look, I could figure it out. Do you really want to be paying me to figure this out? Why don’t we go to people who already know what they’re doing? Same way, so that’s why when we had to reestablish that. I sent them to a law firm down in Texas. Whereas, if I had to do that, you guys have somebody, that’s what they do.

We can get these things done expedited. A lot of times, when it comes time to do a transaction, you need an LLC in short order. We can help with that. We thrive in situations like that, in fact. Folks will get to that point where they need a solution. They need to no longer do this internally. It gets out of hand, and that’s where we really step up and make a big difference. CPAs, for maybe quite some time, have avoided offering this service.

It might be time to actually start providing this service because now you can in a way that’s not going to require you to hire seasonal staff or is not going to require you to pull your hair out right after 415 deadlines. I’d be curious, actually, how CPAs approach those that do. To me, it makes sense to try to get these things done all in one fair swoop during tax season, but I think a lot of folks refuse to do so. Maybe there’s a reason to rethink that approach now that things have been made easier.

To get into that, a few years ago, if the accounts were going to have to go find the forms online, do it through these crappy state portals, I think what you would get from them is, one, they’re starting to wander into the practice of law, a little nervous. Two, it’s the last thing they need to add to their tax season morass. Now with the portal, with the automation, combine that with the automation you can do in your tax practice, automated bookkeeping, Liscio’s automated tax organizer, and Gruntworks automates the completion of the return.

In that scenario, if for the accountants who have really embraced the technology and built the leverage, you would want to absolutely do this at the same time. I’m already reaching out to my clients. F*** doing it twice. We’re doing it once. By the way, while we’re getting all your tax stuff, confirm this information is correct so we can file your annual report and just take care of that.

[bctt tweet=”Recurring revenue is the easiest revenue to diligence. ” via=”no”]

That’s the thing is I just want to emphasize how easy we can make it because a lot of folks do have all of their client names, all of their client addresses, all of their client contact information in either a spreadsheet or in their tax prep software or in their client relationship management system. You can literally export that into a sheet, send that to our team.

We will upload it to our portal. It will be a portal that you’re granted access to. All of your client information will be there, and it will push a link direct to your client and they can click, see their information pre-populated from their previous annual report, update any information that might have changed, swipe with the credit card to check out, and they’re compliant for the next year. Now going forward, they’ll get a reminder 120 days before the next deadline. They’ll get reminders until they file, leading up to that deadline.

Think about all you just accomplished in just a quick two-minute upload with a notification sent out. Now your clients are on autopilot. You’ve consolidated invoicing. You’ve consolidated the vendors that they’re managing across all 50 states. You have everything in one simple place to keep it easy. You’ve now created a recurring revenue stream for your firm while saving your clients hours of time. Does it get much better than that? I’m not sure.

File Forms: Modern Compliance Game-Changer

In fact, Frank, one of the things that my team asked me about is that we want to record some of this for the tax rep members’ area to actually show them how easy this is. I wish we had it twenty years ago. I remember doing this stuff when I was really starting my practice. I’m setting up single-member LLCs, all this stuff, and you’d have to go get the forms. We’d have to type the forms because there was no PDF adult filler, and I had a typewriter just for stock certificates and for filing these stupid forms.

We’ve seen that. We’ve actually seen people say, “If we had this technology when we started our firm, our practice would be 3 or 4 times as large.” When someone comes to you and says, “I’m trying to start a business, I’m looking to form an entity,” and your first step is to send them somewhere else, that doesn’t make any sense. You’re working hard every single day to build a brand, build a reputation, and build a network. Why are you going to go send them somewhere else where they could potentially go to an attorney, and that attorney introduces them to another CPA or an accountant?

Next thing, you just lost that business. Now you can offer them that experience without having to bear the burden of time or making decisions that you’re not comfortable with. Our team will walk them through the entity formation process using our technology. Ultimately, from there, you have that client relationship forever.

This is just as much of a lead generation and new business development tool as it is for maintaining the current book of clients. I guarantee you will have clients come to you asking for questions on this stuff without a doubt, especially this time of year. The best part is, you say, “There’s just not enough time before that Delaware entity deadline on June 1st.” Guess what? Clients are going to either do the work or not do the work in the next 5 to 6 weeks here leading up to June 1st.

If they don’t do the work, then they’re going to be very happy to hear from you on this topic because they effectively got some cleanup on their hand. If they did do the work, they’re going to know exactly how much time they spent, exactly how much money they spent, and exactly how much of a hassle the process was. It’s going to be the perfect timing to swipe in there and say, “There’s a better way. Talk to Fileforms. Go ahead and upload your information, and they will take care of this so you don’t have to waste that time in the fire drill scenario that you just got out of.”

Boost CPA Value With Compliance Revenue

Let me tell you something. I was just speaking this morning to somebody who does a lot of M&A work with the accountants. We’re talking about a particular practice, and they asked, “Is there any other source of revenue?” From their mind, they’re going to come in and establish this so they can take that existing practice and create more revenue, more value, because the CPA or the EA hasn’t thought of it, hasn’t implemented this. Therefore, it’s not going to get paid on it. In many ways, by creating this, again, it’s a win-win.

You’re helping the client, making sure they do what they’re supposed to do. You’re getting paid, and you’re adding value to a digital practice that you’re hoping to sell, I assume. Listen, Frank, just as we wrap up some resources for the readers, I’m going to put the link in the description below for the FileForms. They do have a partnership program. There’s no cost to join. You can partner with them. Again, help your clients without you now becoming the corporate expert in 50 states. You don’t have to. That’s what they’re here for. You also have some other. There’s a state-by-state compliance calendar. I think you have our checklist.

 

We have an interactive map, so if you’re more of a visual learner, you can click your state. Deadlines will pop up right there. You can click to get started. As I mentioned, our teams are on standby every step of the way, so maybe you just need a one-pager or a short list of slides to send to a few of your entities or clients that have a large amount of entity filings to be had. Happy to follow up with those materials.

We’ll continue to innovate every step of the way. We’re a nimble software platform. We actually really do value the feedback because we can bring features and things to life very quickly. If you do have pain points within the filing process or the regulatory process of running your firm, our goal is to help streamline solutions so your workflow can be more automated. Especially as there’s a prevalence of private equity capital flowing into the purchase of CPA firms. Every month, there’s a different headline of a brand-name firm getting acquired or emerging.

That’s going to trickle down over time. Eventually, all those big aggregators are going to start picking up the single shingle shops, and the more recurring revenue that you can produce before that exit opportunity is going to pave the way for your retirement, because this recurring revenue is the easiest revenue to diligence. It’s not one time. It’s not recurring in nature as PE folks love to say. This is a recurring revenue opportunity for you and your firm, and doing it in a way that is ultimately going to create more trust, more engagement, and more stickiness for you and your client relationships.

Again, everyone, I’m going to put the link below. Check that out. I highly recommend it. It’s what I use. Frank, listen, thanks for being here as always. We are going to be doing a webinar again late spring on this topic because it’s a topic that never goes away. Again, as Frank said, it occurs at least every year but for many of these clients, it’s ongoing. Never a better time to implement this than now. Frank, listen, thanks for taking the time to be here again. It’s always great. I wish we could be in person. I wish I could come to Fort Lauderdale.

Come on down. I’d love to have you. Thank you so much.

It’s a little chilly up here.

I can tell.

Thanks, everyone, for reading and checking out this week’s episode. Go click on the link, check out FileForms. I’ll see you next week on the show.

Thanks, Eric.

 

Important Links:

• Frank Tumminello on LinkedIn
• FileForms
• FileForms on Facebook
• FileForms on X
• FileForms on LinkedIn
• FileForms on Instagram

 

About Frank Tumminello

Frank Tumminello is CEO and Co-Founder of FileForms and comes from a decade-long background working in the financial services and technology industry. Prior to FileForms, he was an investor, acquirer, and value-creation resource in several financial services, insurance, and healthcare businesses throughout his private equity, corporate development, and investment banking career.

Frank began his career at Raymond James, followed by Oppenheimer & Co. and Century Equity Partners. Most recently, he led a pre-tax healthcare benefits third-party administrator through eight successful acquisitions and a sale to a multi-billion-dollar private equity firm. Frank holds a Bachelor of Science in Physics from Bates College, where he minored in Mathematics and wrote a year-long thesis in Computer Science