IMGCAP(1)]Let’s face it. Whether we are talking about water (especially in California), oil or time, we are all unfortunately limited by the resources available at our disposal.
As we begin planning for tax season 2016 (where did the summer go?) it is important to think about the resources we have to ensure a successful tax season.
If your practice is anything like my experience, you have headed into tax season thinking to yourself, “I’m staffed right. We have all of our systems in place. The work is going to come in early. Tax season is going to be a breeze.” But by April 15 you are exhausted!
One staff member may have not been up to the task and bolted within the first month of tax season. Another struggled understanding the systems in place within your practice. A manager in your office got the flu from their young child and seemed to pass it around the office. Spring showed up, and while your colleagues left at 6 p.m., you stayed in the office past midnight and “hung out” in the office all weekend because at the end of the day, you were responsible to your clients if the work failed to be completed. You missed your kids’ soccer game and you are personally unfulfilled by all the busy work that you are left with!
It’s a fact that people, time, water and oil are not always reliable resources. It’s important for our firms to plan now for the hiccups that will surely arrive during tax season. Focusing specifically on the people and time issue (as I doubt you are interested on an accounting site to hear about California water or Alaskan oil-drilling issues) for the last couple years, I have engaged with a software and outsourced service provider (SurePrep) to guide our mechanized tax practice. Below are the four steps our firm took to ensure we maximized our available resources during tax season:
1. Rank your tax returns. Each tax return in the office has its own issues, ranging from individuals with only a W-2 and some 1099-INT’s to corporate returns encompassing several consolidations. The firm methodically grouped returns into multiple buckets. Once we were able to group our returns in some specific buckets, we could link the new (or existing) resource that would be able to efficiently standardize the process of completing the project. Please don’t skip this step. It truly can make or break your outsourced tax preparation experience.
2. Assign the appropriate resource. Based upon the ranking system you have developed, you should employ the same resource (or mix of resources) to each group. Simple returns can be completely outsourced. Returns with several technical issues and customization should be wholly prepared internally (while utilizing a standard template filing structure). The returns in the middle can be partially outsourced, though the workflow description needs to clearly delineate the responsibility of the various roles. From my experience, during the first year I outsourced tax preparation, I took a conservative approach and tended to apply a lower-level service to each project. In doing so, it allowed the staff to get an understanding of the changes in the way the firm utilized resources.
3. Train your staff. It is human nature to continue to do what you have done in the past. CPAs love the term SALY as it’s the easiest way to train your staff in the heat of the moment. Well, now that we are moving from all internal preparation to automated and outsourced preparation, our staff need to clearly understand their new role. Based upon prior experience, I have seen staff duplicate the functions that SurePrep has performed. It is our duty to educate our staff about any new expectations and responsibilities they have due to their available time.
4. Add value to your clientele (and add to your client base). An unexpected result of outsourcing tax preparation was that we had additional time within the office to go above and beyond for our clients. In utilizing an automated tax preparer you will find, as I did, that specific groups of returns returned an unexpectedly high margin on the project. Once we identified that type of project (for our firm it was self-employed individuals with Schedule C’s), we took two actions:
a. In prior years we had not provided these clients with analysis of their annual activity, as the margins on these projects were low to begin with. Now we add a brief write-up on trends that we see from their annual activity, while only raising rates marginally. Clients love it!
b. We found a niche that we love and our clients love. We now know exactly where to spend our marketing time to increase the bottom line of our practice with the greatest efficiency.
By mechanizing our tax practice, we were able to shift our reliance to systems rather than people. But more importantly, we were able to do the right work at the right level. I focused on the work I enjoyed, and my staff was able to test themselves on challenging problems, while leaving the data entry (mind-numbing work) up to a computer. As we move forward, our staff is focused solely on consulting efforts and value-added services for our clients. As a firm, we are providing greater satisfaction to not only clients but the staff as well. Cheers to an efficient tax season!
I hope to hear about the smiles your firm beams on April 15 rather than your sense of relief!
Adam Blitz is a CPA and a relationship builder. Through his website
