A refund transfers allows your clients to pay you for your tax preparation services directly from their refund.
The refund transfer process starts with the IRS directing the taxpayer’s money to a refund settlement bank. The bank deducts all relevant fees and splits the money between you and your client.
Your clients can choose to have their fee deducted from their refund using a refund transfer rather than paying it upfront, a beneficial option for both of you.
1. Refund transfers Lets You Provide a New Option
Refund transfers are a great way for you to provide a new option to your tax clients. With a refund transfer, your clients can move money from their refund to pay you for tax preparation services.
Compared to your traditional payment options, like check or credit card, refund transfers provide a less costly alternative for your clients.
In addition to being less costly, refund transfers make it easy for your clients to pay you. Your clients don’t have to write a check or go out of their way to deposit it.
2. Broadens Customer Base
The refund transfer process specifically serves clients who can’t pay upfront due to a low income or poor credit score.
The refund transfer process eliminates the need for your clients to obtain a checkbook or credit card. It’s also a convenient option for clients who lack checkbooks or bank accounts.
3. Promotes Punctual Payment
Refund transfers allow you to collect payment promptly. When you receive your clients’ refund, you receive a payment at the same time.
The refund transfer process is unlike the check or credit card payment option. These two payment options allow your clients to leave it up to you to collect the payment.
4. Provides Instant Cash Flow
Refund transfers provide instant cash flow for your small business. When you receive a refund transfer from a client, that money is coming directly from the IRS, meaning it’s not yet subject to the typical wait time associated with receiving a paper check.
This all translates to a quicker cash flow and a higher overall payment than a paper check.
5. Reduces the Risk of Missed Payments Refund transfers
A refund transfer also reduces the risk of missed payments. Your clients can pay you from their refund even if they lose their checkbook or forget to make a payment.
The refund transfer process gives you the option to deduct the fee from the refund before sending the money to your client. This is a huge perk for you, especially if the client often misses payments.
Conclusion
Refund transfers are a great method for you to accept early payment for your tax services. While this option may seem similar to the refund anticipation loan, refund transfers eliminate the need for you to make a credit decision. It’s also easier on your clients, given they’re not required to pay upfront in order to receive their money. While refund transfers may not be ideal for everyone, they’re a great option for those who can’t afford to pay upfront. Try it, and see for yourself how valuable an option it is!
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