A non-profit came to us one day because they received a bill from the IRS for over $120,000 plus penalties and interest for failure to file their tax returns. They were in a panic and had no idea what to do. This is where we stepped in.
The Issue
This non-profit thought they had been compliant. That is, until they realized their treasurer had been stealing money from them. Additionally, they had no idea that the treasurer hadn’t been filing the non-profit’s tax return for the past three years. Per the IRS, “the maximum penalty for any return is the lesser of $10,000 or 5 percent of the organization’s gross receipts for the year. For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000.”
The Plan
First, we knew we had to work quickly. We had to get all their information into a QuickBooks file so that we could produce financial statements. Then we had to have a tax preparer utilize those statements to file the past due tax returns. Lastly, we had to put together a letter explaining the situation this non-profit was in and their plan to keep this from happening in the future.
The Work
We quickly started putting together their numbers for the years they had not been compliant. This was not an easy task as they did not have all the information readily available. They had to go to their bank and request paper copies of their prior year bank statements because they were no longer available to download online. They also had to speak to their bank and request copies of checks that were written because they had no idea what some of their expenses were. Once we had all the information together, we entered it into QuickBooks and produced financial statements.
The Wait
As soon as we had everything together and handed it off to the tax preparer, we put together the letter explaining the situation the non-profit was in and the systems they had in place to ensure future compliance. Our letter also outlined the financial situation this penalty was putting them in and asked that the penalties and interest be waived. We knew that the IRS might not be so lenient, but we had to ask as trying to pay this amount would surely put this non-profit out of business. Once our CPA put the tax returns together and sent them in with our letters, all we could do was wait.
The Outcome
Several weeks passed without any word from the IRS. Then, approximately two months later, our non-profit client called us. They were giddy with excitement! They had just received a letter from the IRS informing them that all fines, penalties, and interest had been dropped. The non-profit owed nothing to the IRS. They couldn’t thank us enough! So, if you find yourself in a situation with the IRS, give us a call. We would be more than happy to help you work your way through these issues and we have an amazing CPA that we partner with to take care of your tax issues.
I’m not sure what got me thinking about this, but I’ve realized that creating good relationships with my clients is just like any relationship: they require work. To have great relationships with our clients, we have got to be willing to put in the time and effort to meet our clients’ needs. But what does that mean? Let’s look at what some of the experts say a good relationship requires and compare that to the vendor/client interaction.
Communication
Communication really is key. Often, we ignore the little things that bother us and sweep the issues under the rug. This doesn’t create a healthy relationship. I’ve found that if we don’t express our needs to one another, we can build up resentments. The other half of this equation is active listening. Too often, we listen to reply. We listen for key words coming from our clients and prepare our response instead of listening to their words, tone, and body language. Once we’ve heard them, we can take time to respond in a way that addresses not just their words, but the subtleties they are communicating as well. One technique I utilize is feedback. I repeat back to the client, in my own words, what I think it is they just said. It’s amazing how much miscommunication can be stopped with this simple practice.
Trust
Transparency is a great way to build trust with your clients. Being honest with them when you make mistakes or miss deadlines will help build trust. If you make an error, discuss why the error happened, what you are going to do to rectify the situation and what you will be doing to make sure it doesn’t happen again. Apologize and be humble. Your client is also more likely to trust you if they can see that you value their relationship. By putting effort into the relationship and believing that you have something to offer your clients, they will see that they are important to you.
Respect
In the book, The Four Agreements, author Don Miguel Ruiz encourages us to be impeccable with our word. This means that we say only what we mean, we don’t gossip about others, and we speak with truth and love. Respecting our clients means that we don’t talk about them negatively with others. It could also be demonstrated by giving our clients one point of contact for all their issues. This shows our clients that we value their time. We can also show respect to our clients by showing them kindness and gratitude. Customers report that they will spend more with a company because of historically positive interactions.
Quality Time
It doesn’t really matter how much time you give your clients. What is important is the quality of this time. Make sure that you really listen to your clients when they are speaking. You can do this by delivering the unexpected. Listen to what they express about “nice to have” items. Can you do something to make those wishes come true? What are your clients’ pain points? Are their processes flawed in some way that you could fix?
Misunderstandings Happen
Again, this comes down to communication. There will always be times when you and your clients fail to understand one another. How you approach these misunderstandings will make all the difference. Put together a strategy about the best options to fix the issues before going to your client. Once you have that plan in place, discuss it with your client but start with humility.
Other times, your client may be wrong. I’ve found the best strategy here is to keep from pointing the blame at them, but to ask key questions to help them see their own mistakes. Sometimes, a client will fail to listen to key points of a plan and that is cause for the issues at hand. Talking them through it and offering more details or education about the missed points will help your client feel like you really are there to help them.
Conflict Resolution
Conflict is an opportunity for growth. Utilizing conflict in a positive manner can improve communication with the client. I’ve found that I must choose my battles. Like any good relationship, there are times when some conflicts just aren’t worth the time and energy necessary to resolve them. If I find the issue is worth confronting, I try to make sure that I’m using the right body language if I’m addressing it in person. Appearing positive and open will go a long way to helping the client relax and accept what you must say. I try to focus on the facts and leave opinion or emotional responses out of the resolution process. I choose my words carefully and use statements that begin with “I” to avoid casting blame. Often, a client simply needs to be heard, so approaching them with understanding and empathy is really all that is needed.
Don’t Make Assumptions
This can go both ways. Don’t assume that you understand what your client is relaying to you and don’t assume that they understand your meaning, either. To help keep your messages clear there are three steps you can take: 1) be specific – give the who, what, where, when, and how details and spell them out if necessary; 2) ask questions – ask the listener specific questions about the information you provided to them to make sure they understood you; and 3) feedback – repeat what you just heard back to them in your own words. Utilizing these same tools in reverse can keep you from making assumptions about your clients’ statements as well.
Follow Through on Promises
If you tell your client you will do something, do it. If you say you’ll be there at a certain time, show up or text them as soon as you can to let them know you’ll be late. Blowing off promises systematically destroys trust. Great relationships require trust to thrive. If you have a horrible memory, utilize a calendar or make lists. There are a multitude of reminder apps out there to help keep you accountable.
Be Realistic
It’s always better to under promise and over deliver. If you consistently tell your client that you can do it all and then regularly fail to do so you are eroding the trust. This means you are going to need to know your limits. I manage these by trying to explain any potential obstacles, choosing flexible deadlines, and maintaining open and honest communication with my clients throughout the entire process.
Be Generous
Does your client have a charity they are fundraising for or a non-profit they help? There are many ways you can show your clients that you care about their interests. Most feel that the easiest way is to donate funds. Perhaps that doesn’t work for you. There are still ways you can contribute. Can you give an hour every month or quarter to volunteer? What about putting a flier up in your office window to alert the community to the cause? Maybe you could send some of your employees to help at an event. There are a bunch of different ways you can show that you value that your clients are passionate individuals. Showing them this compassion and caring about their cause will go a long way to reinforce that you are someone they wish to continue a business relationship with.
Are you interested in working with a firm that puts their clients first? Contact us for a free consultation now!
