3 Reasons Tax Outsourcing is the Key to Planning Tax Season 2022 Early!

Tax Season 2021 is over and done with. All accounting firms, CPAs, and EAs are heaving a huge sigh of relief for a job well done. Many of them are looking back at the tax season and analyzing what they could have done better. This is the time to analyze, evaluate and address festering growth-limiting issues. These are the issues that stopped you from earning more revenue from the tax season.

These were barriers and they need to be overcome.

We know you don’t want to think about Tax Season 2022, but we think you must. You want to plan for it, starting right now, if you want to do better than Tax Season 2021. When we say better, we mean increasing productivity, generating more revenue, and managing client expectations better. The last is very important because a happy client drives client retention, and we all know it is more expensive to acquire a client than retain one.

Also, satisfied clients are more inclined to refer clients – a customer acquisition strategy with the lowest cost. So, think long and hard. Would you say you managed client expectations better in the tax season that just ended? If you have doubts, it is essential to take corrective measures.

One of the key reasons why you might not have had time to engage with your clients and take time out to build meaningful client relationships is the lack of time. Your firm might have been so overwhelmed with the work coming its way that client management was pushed to the back burner.

Big mistake!

This is just one of the reasons why you must start planning for your tax season early. And one of the lynchpins of this early planning exercise is working with a tax return preparation outsourcing services provider who can help your firm build much-needed capacity and scale quickly yet affordably.

So, let’s get into the details now. Here are three ways outsourcing taxation services can help you plan for the tax season early and make the most of tax season 2022:

1. Plan Early to Add the Best Talent Experienced in US Tax Legislation

Tax outsourcing is a good idea, but it is important to note that many firms out there are thinking along the same lines. So, if you want access to the best accounting professionals with a successful track recording of preparing US taxes, it is vital to identify the right services provider early.

Planning early gives you the time to identify the gaps in productivity that happened in the previous tax season and figuring how many more tax preparers you want to add to your team.

But what if you missed out on some accounting or bookkeeping jobs because you couldn’t do them? You can even add outsourced bookkeepers or outsourced accountants to your team, in addition to tax preparers. Firms often do this on an ad-hoc basis and can’t find the right talent then.

A better way would be to build a team of accounting professionals early, evaluating the scope of work that can come your way in the tax season.

2. Bake Cost Efficiency into Your Process

With outsourcing, you get the advantage of labor arbitrage to maximize earnings. Why is this important? One of the biggest challenges that accounting firms face is downward price pressure on services. It is amongst the top five challenges faced by accounting firms. To put it simply, this happens when clients expect to pay less for the services they are using or want to use.

Source

The pandemic hasn’t been kind to any business, and as an accounting firm, you will get proof of this statement from a client’s demand vis-à-vis pricing. Annual fee increases from long-standing clients are also a thing of the past; on the contrary, the pressure is on to decrease fees.

Firms might encounter a sustainability problem, and you will want to optimize earnings from essentially commoditized services such as tax preparation. This can only happen if you are saving operational costs. When you outsource tax preparation, you save a lot of money, otherwise spent on employee costs, including a high salary and health benefits, holiday covers, yearly bonuses, and much more. An outsourced tax preparer is an affordable option, as you save on all the associated employee and infrastructural costs.

This allows you to earn from even low-margin accounting tasks. You can put economies of scale to good use and optimize your earnings.

3. Bundled Offerings and New Growth Avenues

54% of buyers purchase accounting services in bundles or packages. This is an important statistic, especially if you haven’t given a great deal of thought to offering a service bundle to clients.

Some of the bundles typically demanded by clients include:

• Tax Preparation and Financial Reporting
• Tax Preparation and Bookkeeping
• Payroll and Tax Preparation

You get the drift. Does your firm have the capacity and capability to offer such bundled services? Planning early allows you to deliver such offerings to your client even in the busy tax season. Again, tax return preparation outsourcing services come to the rescue. Outsource all your tax preparation work to an accounting outsourcing services provider so that you can offer other services to the client alongside tax preparation. Or, if needed, an outsourcing provider like QX Accounting Services can provide a range of outsourced services, including payroll, accounting, and bookkeeping.

Conclusion

There are many other reasons why outsourcing taxation services can act as a huge leg up to your efforts in the tax season. But these three should be enough to get you started on a tax planning and tax outsourcing strategy. The time to work out and execute a tax season capacity-building strategy is right now. We will be happy to discuss the way forward.