Question

Suppose you have a tax accounting firm that serves a broad range of individuals and businesses. You are about to begin offering strategic tax planning services and hope to derive significant new income from it. What kinds of challenges will you face in getting this new service off the ground? How will you meet these challenges?

Answer 1

A tax accounting firm typically provide services of tax return preparation, tax return submission and tax payment. Hence it enters into strategic tax planning services following challenges can be faced-

a) Resources - currently the employees and partners of the firm would have theoritical and practical knowledge on the areas they are providing services. To be able to provide quality services on the new service offerings, the firm needs to invest in getting their resources trained for new servcie offering.

b) Practical knowledge - At a lot of time in service offering like this, practical experience comes very handy. The answer is not necessary through theortical knowledge. The firm may struggle to provide quality and satisfactory advice to the client. Also, client may ask the firm how they have dealt with similar situation at other assignments for which there might not be any response.

c) Global tax law - Strategic tax planning services would at times require knowledge of global taxation and tax law of various jusridictions. The firm needs to evaluate how is it planning to equip itself with various laws.

d) Internal strategy - The firm needs to decide how much it wants to invest for this new service offering. Does it want to hire new resources at various level, which pool of educational material does it subscribe to and most importantly how to it approach to each strategic tax planning assignment they receive. The firm cannot randomly start an assignment or service without any internal planning. The planning has to be accurate.

e) Converting clients - Since this is a new service offering, it would be difficult for the organisation to convert clients for this services. The clients may ask prior experience of this service offering before willing to give the account to the firm. Hence, it would get difficult in the beginning to gets client.

f) Competition - The firm needs to evaluate who their competitors are for this service offering, what quality of work do they delivery, what price do they charge etc. Establising and surviving is one of the biggest challenge in an existing market. They need to determine their differentiator from the competition to establish itself.

g) Regulatory challenges - The firm needs to evaluate the various regulatory bodies it is reportable to. It should evaluate of the new service offering creates a problem to the existing service. Also main challenge would be evaluate the risk in the new service offering from regulators and client if they give any incorrect advise to the client.

h) Firm's goodwill - The firm has built a goodwill for its existing services. The biggest challenge would be to provide high quality of new service offering and build the client base for new service offering to maintain its existing goodwill. Otherwise, the existing client base and source of income would be affected.