3 Challenges For Your Accounting Practice During Tax Season
The accounting profession is an ancient one, historically bringing to mind visions of the stereotypical tax pro with phone lines ringing, computer whizzing, adding machine praying for mercy and hundreds of forms spread out over well-worn desks. To go a step further, mention “work-life balance” to a tax pro or accountant in March or April and you’ll get a sarcastic groan coupled with eye-roll gymnastics. You may even have to dodge flying office accessories.
For the truly forward-thinking firm and practitioner, there is another way, however. Even outside of government delays, I consider tax season a large project that needs to be managed. Tax season is a marathon where preparation, teamwork and after-performance analysis leads to higher firm profitability, happier clients and maybe even fewer late nights.
Here are 3 major challenges you’ll face this tax season – and how to successfully deal with each one.
Challenge One: Set Realistic Client Expectations
Tax season is scheduled this year to launch late due to the 2013 government shutdown – between January 28 and February 4, 2014. Tax preparers already face stiff deadlines and frustrated tax clients. Add to this the additional delay for return acceptance and you may need to invest in some tougher running shoes.
In interviewing tax firms for this piece, the frustration and having to work through these common delays was a common complaint.
Peter Griffin, an Enrolled Agent and president of CBS Tax in Cincinnati, Ohio, summarized the situation well. “[Knowing the software well] is not a problem after a few years of heavy use. However, the late tax changes always affect the software. At that point the largest challenge is simply time management … everyone wants to come in at the same time, and no matter how you staff, someone will probably have to wait.”
Client education is crucial. Many clients are aware that you are working on their taxes, but may not be aware of just how many clients you have and what a typical turnaround will be. And, while aware that a high level of expertise and knowledge is required to complete returns accurately, clients may not be completely conscious of what to expect given their personal tax needs.
Making sure a client is aware of average turnaround time at the beginning of tax season, prior to submitting their documents, can help a great deal. This simple act empowers your clients to get their documentation in as soon as possible to beat the rush and may allow a little breathing room for the preparer.
In addition, many preparers are proponents of sending tax organizers to clients prior to the launch of tax season, instead of taking a reactive approach and waiting on client submissions. Sending communicative newsletters leading up into the season, and following up with clients after the season has wrapped, are other common recommendations.
Challenge Two: Firm Preparation
Once you successfully set client expectations, the next step becomes self preparation. Any CPA or accountant running a firm larger than a sole practitioner has experienced the rapidly evolving force that we know as “staff management.” Identifying staff roles and successfully implementing a strong delegation method becomes synonymous to managing workflow. The last thing a CPA needs is a firm lacking consistent management policies.
According to Jim Thelen, a CPA and shareholder at Bramel & Ackley, P.S.C., asking new employees to adopt firm practices first, and then recommend ideas for improvement once acclimated to the firm, has been a winning strategy which encourages firm practice adoption, and facilitates working dialogue between new hire and established team.
In addition, as your firm prepares and advances through the season, working with an outside HR firm or within internal structures to develop and prepare staff becomes a strong asset.
Consistency is key and every member is a key part of the tax process, capable of either providing valuable insight and productive turnaround or, on the other side of the spectrum, creating bottlenecks and interrupting an already working process.
Ensuring that your accounting systems and IT infrastructure are prepared to handle heavier volume, adding new staff with time to train prior to busy season, and completing or delaying any large firm-wide projects prior to January are other thoughts to keep in mind.
Challenge Three: Evaluating Performance
After your season concludes, how do you evaluate the performance of your team? Many firms advocate team or staff meetings to evaluate problems or ideas for improvement.
Technology can be a tool in this process as well. Evaluating staff turnaround time based on time and other system records, measuring these results against firm metrics, and enabling staff to pursue continuing education in weaker areas, can strengthen your firm for the next season and show investment in your firm’s largest asset: people.
In addition, a firm must have a client follow-up system in place. How was the client experience during this process? Were you able to maintain responsiveness in the hustle and bustle, or did clients feel ignored? Were returns processed efficiently and with little error?
However the firm decides to measure success, development of data year over year and related metric development is a key part of this process. If you can successfully manage these three major challenges and maintain momentum through the season, your firm is poised to be successful for years to come.