Identifying Your Firm Type to Select the Best Tax Tools

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Identifying Your Firm Type to Select the Best Tax Tools

Investing in the right tech stack will save your company time, money, and energy, whether you’re a perfect fit for one of these five firm types or somewhere in the middle.

If you work in the financial services industry, you are aware of how important having the appropriate tools is to running and expanding your business.

This is especially true for business owners, but with so many software options available today, businesses frequently end up with an ad hoc mix of services that comprise their technology infrastructure. Payroll and client financial planning require additional time due to these services’ frequent lack of seamless integration.

Optimizing your technology infrastructure, or “tech stack,”, begins with determining the type of business you run and your specific needs based on that profile. While every company is different and there is no “one-size-fits-all” tech stack, we’ve divided these into five broad categories


They are the sole owner of their company and operate as a one-man show with no additional staff. Most provide tax preparation services as a full-time or part-time job, though some also offer bookkeeping, accounting, and payroll services.

They range from new professionals aspiring to do multi-service work to established tax preparers, but retirees are the most commonly seen in this firm type. This is frequently your colleague who has been “retiring” for the past five years but still works for friends, family, and long-term clients.

Typically, one preparer handles around 200 tax returns per year, the majority of which are of medium complexity.

The Digital Nomad

The nomad frequently travels to meet clients at their workplaces or in the field while working remotely, sometimes without a central office. They consider themselves concierges and typically provide tax returns and bookkeeping services, ensuring that both client needs are met.

While it’s been seen sole proprietors and other firm types use the remote approach more frequently, nomads typically employ a team of about 2–5 staff members and three preparers to help them either seasonally or year-round.

Nomads typically handle around 450 simple to medium complexity returns.

Niche Firms

These companies target specific clientele and are pickier with their clients, frequently focusing on a narrow area of expertise or sector and mastering all aspects of that particular industry. These firms tend to use their network of other boutiques for referrals based on business type because they are more selective.

Unlike digital nomads or sole proprietors, boutique firms operate year-round, providing a variety of services such as tax, bookkeeping, payroll, financial planning, and more. They’re also picky about who they file tax returns for, often reserving that service for business owners and their children.

A typical boutique may receive around 350 returns per year, ranging from simple to complex.

The Brick-and-Mortar Store

These are the companies that put a “tax prep” sign out front every year in the hopes of making money during the first three months of tax season. They specialize in tax preparation and provide a few other services.

It employs a sizable staff, which typically scales back after tax season and ramps back up in the fall. However, in recent years, we’ve noticed more instances of staff members staying on longer to handle more extensions. Storefronts frequently witness tax professionals stay for a single season, while people frequently stay for years at a boutique firm.

Each season, a typical brick-and-mortar store may handle up to 1,500 returns of simple to medium complexity.

The Multi-Service Company

The multi-service firm is a sizable business that offers a variety of services, including advisory accounting and tax services. Due to the fact that their clientele is made up of both seasonal and non-seasonal customers of various sizes, they usually arrange their staff according to the services they offer.

The multi-service firm combines different firm types, employing seasonal workers like a storefront and concentrating on particular clients like boutiques. They are increasingly employing employees who work from home.

Multi-service firms frequently manage 900 returns annually of varying complexity because advisory services are being prioritized more and more.

Choosing Your Firm Type

We encourage you to consider which firm profile most closely resembles yours, as well as how your firm has evolved. Have you switched from one profile to another in the last few years?

Investing in the right tech stack will benefit your company whether you perfectly fit one of these five firm types or fall somewhere in the middle.

The tax laws are very complex. Our short blog articles cannot cover in full all the nuances of the rules. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it all out on your own. Consider giving this marketplace a try by posting your project and signing up here.

If you are a licensed tax professional and are interested in helping others either part or full-time, or ad hoc, come on in! Happy to have you. Our marketplace has the full suite of tools to communicate with clients including compliance calendars, task and message management, and billing. You can also quickly connect to knowledgeable colleagues who can complement your services with the ones you do not provide. Register here

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