The commoditization of the tax preparation business pushed many people away from hiring accountants. Dawn Brolin, a Certified Public Accountant and Fraud Examiner, joins Eric Green to emphasize why the focus must be shifted to relationship pricing, which makes the client-accountant connection much more meaningful. They review what taxpayers get wrong about their tax professionals and why the idea of hiring accountants must never be set aside. Dawn also shares how adopting a subscription-based model allowed her to improve her accounting strategies, work closely with her clients all year round, and achieve consistent cash flow much easier.

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How Relationship Pricing Works With Dawn Brolin

Understanding The Concept Of Relationship Pricing

I am joined by Dawn Brolin, CPA and CFE. What we’re going to talk about, Dawn, is how people work with their accountants. What prompted this, is you and I have been talking a lot about relationship pricing. We can get into how you made that work. The big problem for all the accountants reading this, the way relationship pricing works, if your client understands the relationship they’re supposed to have with you.

Unfortunately, due to the commoditizing of the tax preparation business by those large national chains, people assume, “Let’s take my stuff tax season, and give it to someone they do the return.” If you’re in business, that’s not how you work with your accountant. Especially if you’re in business, we have monthly reports. You should be meeting with your accountant at least twice a year, mid-year and year-end, for the owners. For the accountants, you should be meeting with your clients and reviewing where they are.

The reason being is, as an accountant, the tax return is one thing, you bring specialized knowledge. The only way to help the business owner is if they have that. If they show up in March to get their return done, it’s a post-mortem at that point. You could put money in an IRA. The truth is, there’s not much you can do for them. The problem we have, correct me if I’m wrong, is that clients don’t want to pay for it. They view it as, with the accountant, it’s overhead. It’s an expense. What we’d love to hear about, define what relationship pricing is and then how did you get your clients to buy into this?

Relationship pricing is the same as subscription pricing. I happen to call it relationship pricing because I feel like I want to build this relationship that has value with the client. Being on a subscription, I feel that naming is more of a commodity in a way too, because you think about Netflix and these subscriptions that you subscribe to. You don’t have a relationship with Netflix. You just use their platform.

I like to say relationship because I feel that is so important for the business clients to be working with me throughout the year and working on things so that they don’t hesitate to call me. They have an issue, or have a question, should they buy something? When we approached them and told them how we wanted to move to this model, it was a business model shift for us. There are many reasons behind that. We said, “We want to work with you through the year.”

 

 

One of the clients said to me, “That would be good because I was wondering last September or October if I should buy a new vehicle and save money on taxes. I just never called you. Not just because I didn’t think about it.” There wasn’t a relationship there. It was just as you said, “I’m just preparing a tax return. What’s the big deal?”

When we wanted to shift to that, some clients were doing their books all year round. Some of them do their own books, and they’re good at it, or they have an outsourced bookkeeping company that does it, and they’re good at it. We tell the clients, “If you’re doing your own books and you’re terrible at it, we’re taking over, and you’re going to pay for that.” I’ve learned so much about my clients since we switched to relationship pricing.

I know what their goals are and if they want to grow their business or if they want to sustain their business. I know what their estimated tax payments are or when they’re getting paid. When it comes to tax return preparation, that’s just an afterthought. We have to do. Historically, because it’s the way we always did it, it would be like, “We service people and put out fires constantly. This one needs a reasonable comp analysis.” We weren’t even doing those back then.

We were doing entity selection on moving someone from a schedule C or a partnership to an S-corporation on a guess. “It looks like we could probably save them some money. If they’re making $150,000, we pay them $75,000. That’s reasonable.” We calculate employment taxes they’re saving. It was not real calculated, and was never discussed because here’s the big thing, I made assumptions that the business clients wouldn’t want to pay for it. There are many of them who don’t want to pay for it

Those are not in my ideal client profile. Those people who don’t want to do it right and don’t want to build a relationship with me, it’s okay. It doesn’t mean that I don’t like you. It doesn’t mean that you don’t like me. It’s just that I want to be in control of the relationship in my business model. If you’re a business owner, as you said, Eric, you should be talking to your accountant.

This shouldn’t be a March project where, all of a sudden, you’re like, “Can you save me on taxes?” No, because that ship has sailed. It’s too late. At least by July or August, let’s take a look at where you’re at. By October or November, what should we do for planning? Let’s pay every supply house that we possibly can by the end of the year. Those types of things.

It’s changed everything, to be honest with you, because we are in control of the relationship because we know what needs to be done. If you’re a business owner out there, it’s not your fault that you don’t know, but it would be your fault if you didn’t make a choice to build a relationship with an accountant and you just fly by the seat of your pants. That’s not a success plan.

A successful plan is going to be working with people and surrounding yourself with people who are smarter than you. I don’t hire dumber people so I can be in charge. I hire smarter people so that I can be successful. If you don’t have an in-house accountant, you should find an accountant who wants to build a relationship with you, returns your phone calls, and emails you back when you email them. Those types of things are important.

Achieving Consistent Cash Flow

What prompted this is another show, the Success Tax Show, which is for entrepreneurs. I was talking with my co-host, Tony Carter, and I said, “This is a topic for entrepreneurs. In starting a business, you need a relationship with an accountant. You need to get your arms around your numbers.” The first thing he said is they don’t want to pay for it. I get that, but it’s a huge mistake.

If you’re a CPA or a tax preparer and you’re reading this, this is where the fun is. I would do these talks and I would do the talk about, we’re going to convert into an S-corp, save the money, start a profit-sharing plan, and take the savings and put it into a profit-sharing plan. If you are a licensed financial professional as well, you can make money with that plan.

You now have the S-corp client and you’re meeting with them a couple of times a year. This, to me, is the strategy. This is the fun. If there is fun in tax, it’s this. It’s not doing returns. Accountants would literally say, “I wish my clients would do that. I wish my clients would pay for that.” When we were talking about this, you said you’re on this relationship pricing. They just pay monthly.

 

 

This way, they don’t have to worry about, “Am I going to get billed for this call?” It’s all built in. First of all, consistent cash flow makes your life easier. You don’t have to run around trying to bill people and collect the money before you do the return. It’s all built in. The other thing is you can now focus on those clients. Not that you couldn’t, but you didn’t want to because they didn’t want to pay.

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Eric, I love that you say that because it’s so true where they’re like, “You’re going to send me an invoice.” The cashflow consistency is a game changer. It’s an absolute game changer. For the client, when they send something over, and this is one of the things, when you move into relationship pricing, you don’t need to list out all the things you’re going to do for that client.

People get so hung up on those details. Business owners, don’t get hung up on, “These are the seven things they said they would do for me for that monthly fee.” That’s not the point. The point is, “Here’s at least the basics.” These are things you can count on, tax return prep, planning, past serenity tax planning, the oversight of your books or doing your books, and reasonable comp analysis. All these things. We’re going to definitely do this stuff for you.

We know other things are going to come up. Conversations that we need to have about various things, and questions you may have. We jump on a call or a Zoom. We’re involved in what’s happening, and we’re only working with such a smaller amount. I was doing 60 business tax returns. It’s a big deal. We’re working with 25 businesses that we work with all the time. We’re in touch with them constantly, and they love that. We’re not going to take every call that comes into Powerful Accounting.

This is how we do it. It’s a minimum of $750 a month. For us, that’s where we are, ideal client profile. If you’re just getting started, I tell people right from the beginning, “I am not cheap, so if you’re price shopping, I’m happy to send you somewhere else.” I get that right out in the beginning. That’s how we lead. We lead the conversation now with, “This is how we work. This is how we operate. If that doesn’t work within the scope of what you’re looking for, then we’re not your firm.” We’re okay with turning people away.

What’s interesting is, for the taxpayers who may be reading this, and you had some interesting conversations with people that makes perfect sense. A lot of stress goes away for them. They don’t have to worry about, “Am I getting billed for that?” If I have an issue, I can now talk to Dawn before I make the decision.

I now feel better that I’m making smarter decisions. There’s another example for the people reading. If you came to our firm for your estate planning, we would like your accountant at the meeting and your financial advisor. Everybody on the team. This is why there’s been this growth of family offices. It is because wealthy families realize, “I want a team dedicated to me, my stuff, looking at everything. Keeping everything compartmentalized is not helping me and them.” Everyone’s now flying blind.

If everyone’s on the same page, people around the table might be able to say or if I say, “An irrevocable life insurance trust, that sounds great.” The financial advisor and the accountant are like, “There’s cash value. You don’t want to go locking that.” It’s important to have everyone on the team on the same page. If you’re reading going, “I don’t know if I want to pay.” I’m just telling you.

When you first open your doors, you might have to do hourly because cashflow is an issue. You don’t need the accountant there. First of all, honestly, you’re not doing a whole heck of a lot. As things get going, it’s to the accountant’s benefit but it’s also to your benefit to be in a situation where you can get answers to your questions when you need them. Not after the fact, what is the fallout from this? That’s not good.

Only to be green and sparse, we’re having meetings with our outside CPA firm, the controller, and the partners as we approach those last 60 days of the year but also midway. Where are we? Where are we with hours, collections, receivables, and all that stuff? We need to make decisions and you don’t want to be making them blind.

Going For A Monthly Subscription Model

One of the things I think is important to point out too, because just you mentioned collections. Being an attorney is a whole different world than being an accountant. For our firm, the way we’ve shifted, and this has only been going on for a while, where we don’t invoice at all. We don’t invoice people. The only exception is that I have a supplemental needs trust and I have to do their periodic accounting. I get that to the court, and I have to wait for court approval.

That’s the only example. The rest of the clients that we work with, if you’re a business owner, you’re in relationship pricing. If you’re a tax client, you prepay for your tax return. We don’t start any work whatsoever unless you have paid for it. That’s where it is like a subscription, Eric. You pay on the first of the month, let’s just say the first of the month to Netflix. You’re prepaying for that months’ worth of work. That is what is very similar.

This is what I also tell people about relationship pricing. It’s like a subscription like Netflix. You prepay and sign up. It’s only a monthly fee. You watch as many movies as you want. You call me as many times as you want, which people get freaked out. Clients aren’t going to call you every day. Everyone’s like, “What if they abuse it?” I’m like, “I haven’t had it.”

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We have almost 400 tax rep members, and it’s very similar. They’re always surprised. It’s like, “I can contact you? What’s the limit?” There is none. People are like, “What about the people that abuse it?” I have some people that are a little more active and are busier. I get probably more frequent questions. You’re the help desk and I get an email. It’s like, “Dawn Brolin. Eric, got this collection issue. What do you think?” Sometimes, I just message back, “Let’s get on a Zoom.” It’s easier for me to explain it than try to type it to you.

Ninety-nine percent, it’s an email, then there’ll be three days where I get nothing. No one has a question. I’ve had a few folks get very hung up on things. We’re going back and forth a lot because it’s a complicated issue. I’ve not seen the abuse issue. How do you abuse your accountant? How many accounting questions could you possibly have? I’ve yet to have anyone tell me, “You’ve worked with who have moved to this.” By the way, if you’re reading this, Dawn consults with firms on how to implement automation and move to a subscription model. In fact, it’s funny, you hung on for two years but you didn’t want to do this.

Eric’s like, “Come on, Brolin. Somebody has got to get these people over the finish line.”

Maintaining A Good Accountant-Client Relationship

It wasn’t even me. We won’t name them, but it was one of the other big national speakers who’s been pushing people to make this shift. A lot of people are like, “Sounds great. I’m not doing it. I’m too nervous.” On that note, how did you pick your top five clients and call them? How did you broach this with them?

Basically, I sat down, and it took me about six months to start to implement. We started talking about it in April of ‘22, I think it was. By the fall of ‘22, I was ready to go. I had my pricing nailed down. The key for us was that we do reverse engineering, which was beneficial. People are like, “How do you do it?” I sat down with my staff, looked at my expenses and said, “I need to do $300,000 a year for all of us to be happy with what we were getting paid.” Everything was cool.

We said, “Let’s print our client income summary for what they’ve paid us.” We took the top to the bottom. We went through, and the business owners were at the top because I don’t have a high-profile individual tax return. The highest revenue was business owners that we’d been billing by the hour, typically, and all the rest of it. We said, “Let’s take the top five.”

We started with, not necessarily the top five in revenue, but the top five clients that we like to work with. “These are good people. I think we can help them. They’re always kind to us. They’re not nasty in any way.” We went through and highlighted the top five. We said, “We’re going to do it.” I’ll never forget the first one. I remember it like it was yesterday, going into their office. It’s was a heating, cooling, and piping business.

We went in and said, “We’re changing our business model. We are moving to a monthly subscription instead of billing you by the tax return and by the hour for doing your bookkeeping. Every time you call us, we’re billing you. I’m sick of doing that. I want to steady my cashflow.” I was honest and open with them.

“I have a goal for our firm, and we want you to be part of our process. We want to work with you, and we want to keep working with you. This is the capacity we want to work with you.” We listed out, “You’re an S-corporation. We need to be doing reasonable comp analysis. That’s something you don’t have to worry about paying for because it’s included. We’ll do your tax returns, your personal tax returns, tax planning, and we’ll do your books, and consulting with you on whatever else you may need outside of that. We can meet on a regular basis. You can call anytime you want. You will get an immediate response.”

They were like, “Let’s do it. This sounds great.” We ended up with about eighteen clients that first year that were into it like, “We’re good.” We met our goal of what we needed to make. Anything like tax returns that were not for those people were all gravy. That first year, I still billed after the return was done. In 2024, I started where I’m like, “Prepayment for tax returns.” By the end of January, I had $100,000 sitting in my bank account.

That’s why we’re both big fans of Ignition, automating that process. We’re both going to be doing a whole series on why we love Ignition. For those of you reading, Ignition is a software program. It’s not terribly expensive. The pro account is like $199 a month. You get fifteen licenses. It’s not expensive. You automate your engagement letters, and we get everything signed and paid upfront. You should not be doing a tax return this tax season if you haven’t been paid.

The big hangup is, “What if I do an extra schedule?” That’s fine. I can live with that. First of all, you can do it quickly in Ignition, send it out, and get paid for it immediately. If you’re that busy that you can’t do that, why not get 90% of your money upfront? On April 15th, 90% of the money is in the door. If you have to send an extra $200 for an extra schedule E or whatever. That can be your main project. If people tell me again that in November, they’re trying to get their bills done for the stuff that they did. No.

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It’s not a best practice. That’s the key. Again, it’s this mentality of the way we’ve always done it and that’s the way I always thought about it. This is critical, especially for those of you who are reading, to think about, where are the true frustrations in your practice? What are you frustrated about? I was frustrated about invoicing and waiting to get paid knowing I had to pay my staff on Fridays. We pay now on Wednesdays.

I was just constantly worried about the money. Now, because I have people on a subscription, the 2nd of every month, the money is in my bank account for my payroll for the whole month. I don’t think about worrying about pay. I transfer that money into my payroll account at the beginning of the month. Any other money that comes in the rest of the month pays the bills, technology, and all those types of things. I have a savings account. I follow the Profit First program, which is awesome.

That money just goes and sits there. I now invest that money, and it sits there all year. By the end of the year, I pay myself a bonus or whatever. I don’t think about the money anymore. That is life-changing in your practice. If you’re somebody who’s struggling with money, I wouldn’t admit it. I knew it was probably taking ten years off my life, but I finally realized that I didn’t have to live that way.

I call it the fight and the challenge to get paid like calling people and sending invoices. By the way, Eric, from a relationship perspective, you know this. You never want to bring money into a relationship if at all possible, so why are we doing that? Let’s eliminate the money from the conversation. Being upfront about it and being honest about it, and saying, “It would be nice for me not to freak out about payroll every week,” or whatever the case may be. Maybe you’re a practitioner out there who’s just getting by.

Wouldn’t it be nice to not just get by but to crank and have money when you see somebody who is struggling? I’m not bragging about this. I’m just saying. I had a friend of mine who was going through some tough financial times, and a few of us got together. The kid played summer league softball or baseball. They have the travel leagues and everything. They were struggling, but the kid wanted to play baseball. He didn’t have $1,200 to pay for the kid to play that summer.

I was like, “Let’s go pay for this.” That’s not because I’m bragging. It’s because I want to help people. If I can’t help myself, I can’t help other people. It’s being honest about it and then doing something about it. This is the biggest part, Eric, in getting people over the finish line. You’ve got to understand, face yourself in the mirror, look at yourself, and have a conversation. It might be weird. I’m willing to take the chance to tell all my clients they have to prepay me for taxes, that they’ll all go away.

 

 

It is a false fear that enters your brain. They are not all going to go away. My approach was, “I’m going to ask you to prepay this year because I’m changing my business model. I don’t want to chase money. I want money out of the way. I hope it puts some skin in the game for you so you get me your stuff faster. It makes it a priority for you because you’ve already paid me. I hope you harass me. My goal is, the minute you get that thing in, within 24 hours, we have your return completed. We will work with fewer clients, and I’m okay with that.”

I was very upfront about it, and I think people appreciate that. You have to sit with yourself, be willing to take a chance, and be willing to battle that false fear in your brain, “My clients aren’t going to do that.” Not just with prepaying taxes, Eric. It’s the same thing with your technology stack. “My clients will never use Lysio. They’ll never do the organizer that way.” It’s false. Once you get over that, it’s a home run, Eric.

How A Subscription Model Transform Accounting

Across the board. A couple of things. First of all, the whole subscription thing, it levels out your cashflow. You don’t have to worry about that anymore. Also, you’re getting paid appropriately. It allows you to work with the client the way you’re supposed to work with them. If you’re sitting there reading like, “How do I tell them I need more money?” First of all, you don’t go to them and say, “I need more money.”

What you’re going to say is, “The way that I work with my best clients, this is how I do this. We meet a certain number of times a year. You call me when you have an issue. We can’t do this with this billing hourly thing. We have moved to a subscription model. I’d love to keep working with you. Here’s what it looks like. I want you to know I’m here. You don’t have to worry about picking up the phone or emailing me thinking you’re going to get a bill. It’s all billed in.” That is going to go over well with your clients. You now get to work with them on strategy, the planning, and the fun things. You even out your cashflow, and you will make more money doing less work.

Imagine, Eric, because you’re working with fewer people, you’ll have a lot less extensions. I don’t know about everybody else in the world, but I don’t like to do tax returns twelve months a year. I want to do tax returns from the end of January until April 15th, understanding that there are some K-1s and all that. Your business will have fewer business extensions because you’re working with them throughout the year. Now, you’re just plugging in the tax return, but you already know everything that happened.

When people dispose of assets or things like that, we can go in and make those journal entries. Was there a gain? Was there a loss on the sale of that asset? How about telling them that before they sell it? “I’m going to trade in this truck, Brolin. I’m going to get $20,000 for it.” “What’s the implication? Do I have a gain there?” “You fully depreciated it. You’re getting $20,000. You have capital gain of $20,000.” If you’re not talking to them about that stuff, they’re not thinking about it.

Throughout the year, imagine, they buy a new truck. You know about it. Get me the paperwork so I’m prepared. Now, I got to factor that in because that doesn’t hit a P&L, folks. That hits a balance sheet. Everybody’s always looking at the P&L. The balance sheet is critical. It just changes everything, the way you approach everything. It has a positive effect on the other end when it comes to getting tax returns done because you already know what’s going on.

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How many hours do you save not doing all that billing?

Eric, the billing, the remembering to invoice, and all of that stuff. Tracy would do a reconciliation of who has and hasn’t paid. She’d do it in like August. It’s like, “Brolin, you didn’t bill these seven people.” I now look like a fool because now I have to get, “Can you call them and let them know we forgot to bill them for their tax return from six months ago?” All of a sudden, they may not have the money. It’s like, “I got to go on a payment plan because I don’t have that money anymore. I budgeted for it when I got my refund. You never billed me, so I spent the refund.”

You now have to finance them like you’re a bank.

Not doing that. Again, it’s all about your mindset, changing the way you’re doing things. I would say also to business owners who might be reading and are not working with their accountant this way. You probably want to give them a call and say, “I read this episode about how I should be working with you. I would like to be able to call you more.”

Give them that chance. Give them the opportunity because that accountant may be the one making assumptions. It’s not because they’re a bad accountant either. It’s that they’re making assumptions about you, and you’re making assumptions about them. Let’s clear the air and say, “I want a better relationship with you. I want to be able to call you when I want. Can we start a new process?” As the business owner, you can take that control as well.

Episode Wrap-up And Closing Words

For anyone reading, if you want to get in touch with Dawn, I’ll put your email so accountants can reach out to you. In terms of the issue of how clients should work with their accountants, this is all just part of it. It’s the relationship and the relationship pricing. If you’re reading, what I hope you take away from this is, it’s a win-win. It’s a win for the clients. It’s a win for you. Everything goes smoother.

You get control over your life again. I think, you don’t want to be a retail shop. If you do, you can go work for one of the big chains. The reality is, you’ve got these skills. You should get paid for them but, even if you enjoy doing returns, the strategy, the planning, and all of that stuff that clients don’t want to pay for but they need. You can now do all of that as part of this relationship. I think it makes it more fun.

Agreed.

Dawn, thanks for taking the time to do this. Everyone, thanks for checking this out. We’ll do more. We have 25 other topics to do.

At least.

If you’re watching this on YouTube channel, please like and subscribe. It helps the channel. We keep growing. Keep spreading the word. Dawn, thanks.

You bet. Anytime, Eric. Take care.

 

Important Links:

• Dawn Brolin Website
• Dawn Brolin on LinkedIn
• Success Tax Podcast
• Ignition
• Lysio
• Tax Rep Network on YouTube

 

About Dawn Brolin

The Designated Motivator Coach for Firm Owners

Dawn Brolin is a passionate coach, speaker, and the founder of Powerful Accounting Inc., who specializes in helping accounting firm owners transform their businesses and lives. With a deep understanding of the struggles that firm owners face—long hours, unpredictable cash flow, and client overwhelm—Dawn coaches her clients to build sustainable, profitable businesses that offer both financial and personal freedom.

Through her own journey, Dawn has successfully shifted her practice to a subscription-based pricing model, stabilizing her monthly recurring revenue and eliminating the stress of cash flow concerns. By focusing on fewer, high-value clients, Dawn was able to increase her firm’s revenue by 18% in just the first half of 2024. She now works just five hours a day, even during tax season, and has achieved her goal of running her business without the need to hire additional employees.

In 2011, after years of frustration and burnout working in a traditional firm, Dawn decided to open her own practice. But the road was not easy—she faced the same challenges many firm owners do: working tirelessly, chasing clients for money, and struggling with inefficient systems. In 2020, Dawn faced the pressing need for change, embracing technology to solve workflow and process issues. After testing and refining a range of software tools, she developed her signature “Starting Lineup” system, which, along with her relationship pricing model, revolutionized her practice.

Today, Dawn is not only living the balanced life she dreamed of, spending her free time on her boat or the golf course with family and friends, but she’s also dedicated to helping other firm owners implement these same strategies for success. Dawn’s mission is to empower accountants to take control of their business, increase their revenue, and work less while providing more value to clients.