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Two weeks ago Lorraine Beste took a leap and wrote a
I thought her article hit every issue on the head and, while I have posted many columns on that topic, hers seemed to perfectly state the situation and she did it as an employee of a CPA firm. My postings are as an "insider" suggesting changes. Her perspective is from an employee being subjected to conditions that she believes are untenable. I cited her column on LinkedIn and received a record number of views. I also received many more direct emails than I usually do, and this got me thinking about a solution that I am presenting here. Think of this as a first salvo to get a discussion started or a plan developed, although I think my plan can be immediately put in place as is. We are a few months away from tax season, so there is still time to institute changes if you so desire.
Issues
- Tax season has a much greater volume of work than the rest of the year.
- The added volume comes from tax returns from many once-a-year clients.
- The added volume also comes from financial statements and tax returns for regular business clients.
- Tax season can range from mid-January to mid-April, i.e., three full months.
- Some firms have a second tax season in September and the first half of October.
- Almost every business has a busy season, and tax season is ours, so being busy during parts of the year is not so unique to accounting firms, but perhaps the length is.
- Many firms require a minimum of 60 hours a week during tax season, forcing humongous overtime.
- Payment for tax season varies. Some firms build it into the annual salary; some pay a bonus, either determined at management's discretion or based on some objective criteria such as chargeable hours worked. Payment could be made anytime from the end of April until the end of June; some pay overtime at straight time rates and some at time and a half; and some make the overtime payment in the next paycheck or it is accumulated and paid in one check later on, as is the bonus.
Consequences
- Staff who want a better "work-life" balance quit.
- Some leave to go to other firms with the promise of a better tax season, and some leave our profession.
- When someone leaves, it hurts the firm and they need to find replacements. Further, many that quit do so before tax season, leaving the firm shorthanded going into that busy time.
- Some owners and partners assume very few staff will remain for their entire careers so they accept turnover. This acceptance then causes shortsightedness about efforts to retain them.
- Many firms that do not have a structured tax preparation system spend added time onboarding new staff and this process is repeated with each new staff person. This takes away efforts to grow the practice.
Objective
- To reduce turnover;
- To reduce onboarding costs;
- To establish a system where it is easier to onboard staff;
- To allow staff to have a more comfortable work-life balance;
- To get better and more productive performance from staff that are happier and who enjoy their roles; and,
- To have clients who are more satisfied because of higher on-time deliveries of tax returns and financial statements.
Suggested solutions
- For tax season, staff should have a 40-hour work week requirement plus two nights where they have to work three hours each night.
- No dinner will be provided, but dinner money would be, and it would need to be eaten after work.
- Staff would need to work four hours on five Saturdays or Sundays (of their choosing) only if they have tax returns to work on, starting March 1. No other work should be permitted on these weekend workdays. Lunches and lunch time would not be provided.
- This configuration would total 50 hours a week, at most. I don't think this would infringe too much on your staff's work-life balance and they should be fully productive, especially since time is not taken for dinners or lunches on the nights and weekend days they work.
- While this seems rigid, it is likely less rigid than many firms are presently experiencing.
- Add in staff flexibility in scheduling their work time and the location they will work at.
- Staff that need to interact with others should be responsible for scheduling those meetings. An example is to have a reviewer prescheduled to review a large return and for the preparer to be available afterwards at a specific time to make any necessary changes, or for a discussion of certain issues.
- When employing flexibility, it might be helpful to have one period every two or three days when everyone is available at the same time should interactions be necessary. Alternatively, a half hour or 45-minute "town hall" meeting can be held with everyone present for updates and sharing of knowledge of unusual situations and tax season progress.
- Staff would be paid for all overtime over 40 hours a week at straight-time rates in their next paycheck. Non-accounting staff would be paid at time and a half. The ready payments would provide immediate benefits for the added work and remove any doubt about how much they will be paid and when. This also provides a calming effect on spouses or other family members. Whether "bosses" realize it or not, adequate and fair compensation is an important part of someone continuing with an employer. Overtime payment is a pretty important element to this.
- Review all tax preparation processes to eliminate unnecessary, unproductive and duplicate steps. I find that many firms follow procedures the owners learned when they started out and that they are comfortable with, but which no longer present any benefits. These should be eliminated or at least updated based on current reality.
- Hire students as interns, or other part-time people, for at least 20 hours a week to work with each tax preparer. The preparer would train and supervise this added person. The tax preparers can use this staff person any way they want to save the preparer's time or to increase production on tax returns. This will only work if you have uniform processes and procedures for the tax processing and training and buy-in by the preparers. The preparers can delegate some of their detailed or repetitive work, data entry, follow-up and admin work to the added person, or they can train the part-timer to prepare the simpler tax returns. Properly used, the added person could accomplish more than 15 hours of work that would have otherwise been performed by staff preparers. This would add to the aggregate output. Comment: If you have preparers who do not want to "take the time" to supervise, I suggest these staff might be dead ended and that would retard any growth you might want to have.
- Staff who do not want to work any overtime will not have to, but they will still have the added part-time person. Schedules will have to be managed to make sure they are not overloaded with work that would "force" overtime on them. I also would hold them to organize their workload so they do not exceed the time they said they want to work.
- I find that tax season is more efficient and effective if work does not need to be redone to correct errors. Because of this, you need to adopt a culture that proscribes errors. This culture development needs to be given top priority. An owner or partner must oversee it and be unbending in its implementation. I know this works because I did it.
- Error-free work relieves the reviewers and owners or partners from being subjected to upward delegation where a staff person's rushed error-laden work is left for the higher ups to fix so the return could get done and delivered on time.
- Serious thought and investment should be given to establishing a tax preparation system within the firm with uniform procedures, checklists and self-review processes.
- Invest in technology to reduce repetitive and data entry processes in tax preparation. Excellent software exists for this.
Added benefits
- You will have happier staff.
- Staff will have a better work-life balance.
- Turnover will be lower.
- Staff retention will be extended. I believe staff who want to leave will stay a year longer than they would have if these new procedures weren't implemented. This will create a more stable practice.
- Work product will be better with fewer errors, making everyone in the firm more productive.
- Better-quality work will make everyone feel better, reduce stress and have your people going home feeling good about what they did.
- Clients will get better service, quicker turnaround and a higher-quality deliverable.
- You will have a better and more valuable business.
What do you have to lose?
- If you are satisfied with your practice and how tax season functions, then there is no need to try anything new or different.
- If you are not as comfortable with your practice as you feel you should be, then I suggest you consider some or all of my suggestions. None of these suggestions are onerous, difficult or costly to implement. None of these require a massive overhaul of your practice. None of these are illogical, outside the box, or off the wall. Some suggestions might be new, but that doesn't mean they shouldn't be considered.
- You can make all of these or some changes and see if there are benefits and if not, you can revert back to what you have been doing beforehand.
How to guarantee that none of these suggestions will work
- Neglecting to put someone in charge who is committed to the success of the new procedures.
I believe the above presents a workable plan that can be easily implemented. It might not be perfect, but any part of it will make things better for you, your staff and their families, and your clients. Alternatively use the above as a model and adjust it anyway you feel comfortable. I do not see the problem as being oppressive tax season hours; the problem is failure to manage a business the best way it can be managed.
Good luck with your tax season and in your accounting business.
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