Our competition - Collective - business strategy with AI

[Strongsilence-CPA]

I lost a client to this company - Financial Solutions & Resources for Self-Employed Businesses (collective.com)

I have never heard of them. 

She informed me that she is taking her S corporation to Collective because I don't offer payroll or legal formation services (but keeping her individual work with me.) To which I said it is better to keep all her work in the same place due to the tax interrelationship of the owner and the corporation.

They use the Subscription model, and they are expensive.

They use artificial intelligence.  "...we will deliver internal AI co-pilots to help us better serve our members and add robust new AI-powered, member-facing capabilities – a new bookkeeping dashboard, task tracking, financial insights and more – to our all-in-one platform."

Is this the firm of the future?

They don't offer Individual tax preparation and I'm very curious about that.

[PATAX]

I never heard of them.

[IRonMaN]

Interesting website.  I decided I was a barber for the day and threw some numbers at a dart board.  They are going to save me $9,000 a year.  $4,000 in taxes and $5,000 in time savings.  What a bunch of malarkey ----------------- but I did see it on the internet so it has to be true.   As a side note, I wonder if Intuit has looked at buying the thing yet ---------- it looks like it is right up their alley.

[TaxGuyBill · Accepted solution]

I wouldn't call it competition.  It's sad that your client wants to waste their money like that.

Their basis is blindly pushing the S-election on taxpayers and they almost certainly hide the negative aspects (such as reduced potential Social Security benefits) in teeny, tiny fine print.

Yet despite them doing the S-election, they repeatedly refer to the taxpayer as "self employed".   It seems quite clear they are using marketing terms to lure people in rather than providing a skilled service.

And of course any personalized recommendations will be minimal or non-existent.

[PATAX]

Also, in my opinion S-corporations that do not pay sufficient wages to the owners are at a high risk for an IRS audit, and since they do not like no change audits, it may be a full audit on everything.