Richard Lavina, Co-founder and CEO of Taxfyle, is using financial technology to bring efficiency and innovation to the tax and accounting industries not traditionally on the forefront of rapid change.
“Usually accounting is one of the last industries to see progress in software and innovation. CPA firms are conservative by nature and their corporate structure as partnerships doesn’t allow for innovations usually seen with traditional corporations,” Lavina said. “Which means there must be a more efficient way to get your taxes done.”
Lavina continued, “I thought about empowering CPAs to do their work more efficiently and effectively, while reducing costs. That same day, I took an Uber to my office and thought about the driver's freedom to clock in and out. My thought was to combine that model with more efficient accounting software."
Thus was born Taxfyle, an on-demand tax filling app that connects you to a tax professional within minutes. Through several different product offerings, the app empowers firms, helps individuals file their taxes and give CPAs the opportunity to work independently and remotely. Think of a ‘gig network’ similar to Uber or Postmates, but instead of drivers, Lavina has assembled an army of CPAs – 2,500 to be exact.
"It's as simple as uploading your documents and letting an expert on the other end do your taxes," Lavina explained. "All follow-up is done through the app. We also have a web-based, browser-friendly login so you can work on your desktop. It's extremely simple. What's easier than passing the buck?"
Since launching Taxfyle in August 2015, Lavina has expanded his product offerings from the original ‘business-to-consumer’ tax app to include two additional products. The newest products are focused on partnering with other businesses – primarily CPAs – to allow these organizations to “uberize” their network and empower their staff to work better remotely. Larger enterprise organizations even have the ability to license Taxfyle’s software – a platform that includes sophisticated algorithms and artificial intelligence designed to pair jobs with available CPAs.
“We acquire market share by teaming up with CPA firms to staff them with our virtual network,” Lavina said. “It helps them reduce cost and gives them access to ‘just-in-time’ work and deliverables at up-front fixed rates. CPAs love it because they can work from home and have full control of their schedule. They can simply log on whenever they have time to work.”
For individual tax filers, Lavina shared that options such as TurboTax are not always a one-size-fits-all solution. “TurboTax is a ‘DIY’ approach,” he said. “That’s great for some people, but for others, such as freelancers, those filing multiple years or for those with more complicated returns, our solution makes more sense. These people prefer to hand it off to someone else and not worry about it.”
For Lavina, the enjoyment of running a business and creating your own opportunities is what he enjoys most about being an entrepreneur. “You can’t put a price on that,” he said. “It’s the essence of the human spirt. You’re going to work harder, more hours and have more stress, and there’s no safety blanket, but you’re given a blank canvas. You have the opportunity to create whatever you want to create. You see this with the independent contractors in our network. We’re providing them with opportunities with no strings attached. That’s the American spirit.”
Looking ahead, as we enter a world dominated by discussions of COVID-19 and the economic ramifications, Lavina is convinced that all businesses, especially CPAs, need to have a virtual play in their toolbox. He’s positioning Taxfyle to be the carriers of this message and to continue to drive their solutions to market while creating opportunities for tax professionals and more options for consumers.
Lavina's advice for aspiring entrepreneurs is that you must be fully committed and ready for hard work. "It's easy to think the idea is everything, but that can lead to pitfalls in fundraising or establishing a business," he said. "You have to realize that things in practice are harder than on paper so the best way to assert some sense of confidence in potential investors or co-founders is to just go ahead and create the product. Create the beta and try to get some customers. You do that and you check a lot of problems off the list, like how does this look and is there a product/market fit. Entrepreneurship is binary. You're either in or out. If you're going to do it, do it. Dive in head first."
Lavina continued, “In terms of advice for those seeking venture capital – it’s all about relationships. You can have the best business plan and make millions of dollars and you’re still not guaranteed to get noticed. Meet with as many people as possible and don’t focus on superficial relationships. Remember, at the end of the day, they will find something wrong with your company. It’s their job to lower the valuation. That’s why it’s critically important to build strong and meaningful relationships with these people and make them believers.”