The problem
New clients often start without a signed engagement letter, add extra forms halfway through and sometimes never pay. If 5 of 80 new clients a season leave a $450£338€403A$650C$636 fee unpaid, that's $2,250£1,692€2,013A$3,248C$3,180 a year written off, on top of 25 minutes each to print letters and take payment.
What the AI does
Canopy is practice management software for tax and accounting firms. In its engagements feature you build an engagement once with the services, prices and terms, and the client signs it with Canopy's built-in e-signature. You can take a deposit up front and require payment details before work starts, and the workflow starts the moment the client signs. Canopy also gives the client a portal for documents and secure messages. The preparer writes the engagement terms, including what isn't covered, such as IRS notices or amended returns.
A worked example
A two-preparer tax office in Atlanta takes on about 80 new clients a season, with an average fee of $450£338€403A$650C$636. It moves new client intake to Canopy: an engagement with a $150£113€134A$217C$212 deposit, signed online before the office books an appointment.
Before
25 minutes a new client and $2,250£1,692€2,013A$3,248C$3,180 a year in unpaid fees
After
About 8 minutes a new client and about $450£338€403A$650C$636 a year unpaid
What it's worth
About $226£170€202A$326C$319 a month, averaged over the year, against a $148£111€132A$214C$209 cost. Unpaid fees fall by about $1,800£1,353€1,611A$2,598C$2,544 a year ($150£113€134A$217C$212 a month); the work was already done, so that money is almost all profit. Time saved is about 22.7 hours a year (17 minutes x 80 clients), worth about $76£57€68A$110C$107 a month at an assumed $40£30€36A$58C$57 an hour. Standard is $74£56€66A$107C$105 a user a month billed annually; two seats cost $148£111€132A$214C$209.
How to set it up
- Write one engagement for individual returns and one for Schedule C clients: services, fee, deposit, and what costs extra.
- Have the owner, as the enrolled agent or CPA bound by IRS Circular 230, approve the wording before any client sees it.
- Turn on the deposit and required payment details, and decide whether clients pay by ACH (1%, capped at $10£8€9A$14C$14) or card (3.30% plus $0.20£0.15€0.18A$0.29C$0.28).
- Send the engagement from Canopy to each new client and book the appointment only after it's signed.
- Record Canopy in your written information security plan (IRS Publication 5708), since it will hold client documents and payment details.
What goes wrong
- Canopy's pricing page doesn't say which plan includes engagements. Confirm it's in Standard before you commit.
- Canopy bills per user on an annual plan; a seasonal preparer who needs access is another $74£56€66A$107C$105 a month all year.
- A deposit that's too high puts off price-shopping new clients. Test $100£75€89A$144C$141 to $150£113€134A$217C$212 against your average fee.
- Canopy says its system handles the reminders, but its pages don't spell out reminders to sign. Check the settings and follow up by phone if needed.