Five Most Pressing Relationship Challenges Facing Tax Accounting Firms

The accounting profession is undergoing a significant transformation. However, nowhere is the pressure more pronounced—and the opportunity more powerful—than in tax services. With constantly changing legislation and digital filings, along with increased client scrutiny, tax professionals are navigating not only increasing complexity but also relationships that can either promote long-term growth or gradually decline over time.

As a student of Relationship Economics® for the past two decades, I assert that relationships are not merely soft skills; they are essential skills and strategic assets. They are measurable, improvable, and—when managed proactively—yield extraordinary returns. In discussions with leaders in the Avnir Beta Early Access Partner program, it is evident that small and mid-sized tax firms encounter ongoing relational challenges that impede their ability to scale and stand out. 

Here are the five most pressing—and solvable—relationship challenges in the tax segment and how your firm can address them with intention, insight, and measurable outcomes:

1. The Compliance Mindset Trap: From Reactive to Relational

For most tax firms, the annual compliance cycle feels like a treadmill. Clients drop off documents, you prepare returns, answer a few questions, and move on. It’s reactive, repetitive, and transactional. But in the eyes of the client, that’s all they think they’re paying for.

This “compliance trap” devalues your insight and restricts your role to mere execution. The antidote is a relational mindset: viewing every client interaction as a strategic opportunity to add value. For example, mid-year tax planning, business structure reviews, and wealth transfer strategies demonstrate to clients that you’re not just a tax preparer—you’re a proactive partner in their financial lives.

 Tactical tip: Institute a "Post-Filing Planning Meeting" as a standard service. Use it to discuss how the client’s circumstances may evolve this year—and how your firm can support them.

2. The Stakeholder Disconnect: Beyond the Primary Contact

Many small firms establish relationships with a single person—often the business owner or finance lead. However, critical decisions about tax strategies frequently involve multiple parties: legal advisors, wealth managers, and even spouses or future heirs. Failing to understand and engage these stakeholders can result in misunderstandings, mistrust, and missed opportunities.

Relationship Mapping, as I describe in Relationship Economics®, assists firms in identifying and establishing credibility with everyone who influences the relationship. In a tax context, this might involve aligning with a client’s estate attorney during a trust restructuring or proactively collaborating with their investment advisor to reduce capital gains exposure.

Strategy in action: Create a straightforward stakeholder map for every high-value client. Record those who influence tax-related decisions and devise a plan to engage them consistently—not just during filing season. 

3. Digital Convenience vs. Personal Connection

The tax industry has embraced portals, document scanners, and e-signature tools to streamline processes. However, the push for digital efficiency has sometimes come at the expense of the human connection—the kind that fosters client trust and loyalty.

 Clients value speed, but they remember thoughtfulness. Tax firms that succeed in the long term are the ones that combine technology with empathy. A tax planning email is helpful. A personalized handwritten note referencing a client’s recent life event—and its impact on their taxes—is unforgettable.

Client intelligence is crucial. Utilize data (client history, past returns, known life changes) to create more personalized communication—even if it’s delivered digitally.

4. The Risk of Turnover: When Expertise Walks Out the Door

In a tight talent market, employee retention isn’t just a recruitment issue—it’s a challenge of maintaining relationships. When a seasoned tax preparer or planner leaves, their deep understanding of client history, nuances, and preferences often departs with them.

Relational continuity should be a key component of your talent strategy. This begins with pairing junior professionals with senior leaders during client meetings, documenting institutional knowledge, and fostering a culture of mentorship.

Program idea: Launch a “Client Legacy Notes” initiative—encourage your team to note important client relationship details (preferences, personal context, risk tolerance) in your CRM, making it accessible to successors and teammates alike.

5. Trust as the Ultimate Differentiator

Clients may switch accountants for cost, convenience, or better software—but they remain for trust. And trust isn’t established through perfect returns; it’s founded on reliability, clarity, and shared success.

In Relationship Economics®, I frame this as Return on Relationships (RoR)—the compound interest of relational investments over time. You earn RoR by showing up consistently, educating rather than merely informing, and being transparent when plans change or expectations shift.

Trust-building tip: Conduct a mid-year client relationship review. Don’t just discuss estimated payments or deductions—explore what’s changed in their life or business and how tax implications are evolving alongside them.

Relationships: The Most Undervalued Asset in Tax Firms

The firms that grow most profitably in today’s hyper-competitive environment aren’t the ones who generate the highest returns or offer the lowest rates—they’re the ones who prioritize strategic relationships. Technology will continue to evolve. Tax codes will keep changing. But one lasting asset remains: your ability to build trust, provide value beyond the transaction, and prioritize relationships.

Ready to Turn Your Relationships into a Strategic Advantage?

That’s exactly what we’re creating with the Avnir Beta Design Partner program. Our platform assists tax firms in visualizing and mapping critical client relationships, identifying gaps, strengthening connections, and activating networks to grow intentionally. Learn more or apply to join the beta program at www.avnir.com 

This is a three-part series. In the next couple of articles, I’ll address audit and advisory practice challenges:

· Audit Edition → Five Relationship Challenges Keeping Audit Firms from Growing Sustainably

· Advisory Edition → How Advisory Firms Can Use Relationship Economics® to Move Beyond Transactions