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Buy now, pay later’ might sound like the makings of a scam - but the truth is that offering customers the ability to access a tax professional's services without the need for an upfront cost, brings more value to a business than it does harm. When it comes to tax-season, this is known as a refund-transfer, and is quickly becoming the norm in the tax-world.
Besides the obvious value that clients receive from utilizing a refund transfer, this a business practice that also builds brand-reputation, allows for a broader marketing approach and larger audience, and is on a fast-track to becoming an industry-standard. Considering big-tax-prep software like TurboTax offer this service in their basic package for regular full-time employees, refund transfers are an essential tool for any and every tax professional as it also helps to secure payment for services rendered.
Before implementing a tax refund service it’s important to understand how they work, how to best package the service for specific target markets, and the many benefits that they bring to both the tax professional, and the clients.
Inner Workings of Refund Transfers
As refund transfers grow in popularity, being well-versed in how they work allows one to provide clients more depth, clarity, and understanding in how they can benefit from selecting a refund transfer.
A relatively simple process; refund transfers work how they sound they would; when a client is to receive a refund, they can, instead of selecting to receive the full amount - opt to pay for the tax-prep services with a portion of the refund, prior to receiving the remainder. This payment method is normally only available once a client is confirmed to be receiving a refund.
Before the tax-professional, or the individual receives their respective portion of the refund the money needs to pass through a special refund-settlement bank which will divide the refund, deduct fees, and distribute the proper amount to the parties owed.
While there can be additional fees associated with refund transfers that the client needs to be aware of; the pure convenience of paying for the tax-service with a portion of the refund carries higher value than the relatively small fees associated with refund transfers. This makes refund transfers a desirable payment method, and there’s a growing consumer market seeking tax refund transfers when it comes time to flipping the bill for tax-prep services.
In offering refund-transfers as a payment method, clients are more likely to volunteer referrals, as it’s a business practice that innately possesses a connotation of goodwill, which contributes to the reputation, and overall brand quality of the business, individual, or firm.
Importantly, if a client isn’t to receive a tax-refund, they may not be eligible for a refund-transfer, and would likely need to seek alternative funding methods. This could include an upfront fee, or in specific circumstances to be advised on an individual basis - with an agreed upon installment agreement.
Tax refund transfers bring an array of benefits to the clients like massive convenience and no upfront cost, and the tax professionals, by increasing brand reputation, generating referrals, and ensuring payment - ultimately benefiting both sides of the coin, literally.
Becoming the industry standard among the most competitive tax professionals, tax refund transfer services are an absolute necessity for an individual or tax firm. Refundo’s refund-transfer processing platform is powerful, user-friendly, and compatible with any tax software, making it flexible, versatile, and accessible.
Not only that, Refundo’s refund-transfer processing platform has one of the lowest fees in the industry, and is dedicated to helping tax professionals and tax firms grow their book of business with a variety of tax-professional products.
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