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Topics: Industry, Outsourcing, Tax


A 5-step Strategic Plan for Outsourced Tax Preparation Services

Written By Indrajeet Pradhan


Accounting firms are constantly flooded with work, and much of this is around the tax season. This is their bread and butter season, where they have a chance to boost revenue growth. But this isn’t easy. Tax preparation is demanding work. As an accounting firm owner, you will be well versed with the prospect of always being pressed for time, especially in the tax season. Working long hours and wading through piles of files becomes a part of your routine. You might have reconciled to the fact that ‘This is the Way’ (I couldn’t avoid The Mandalorian reference), but it isn’t.

There are plenty of available solutions to help you get rid of tax season blues, one of them being tax outsourcing.

The key to becoming more productive in the tax season without driving your stress levels northwards is to give your workforce a healthy work-life balance so that they’ll be more effective. When employees are more productive, they can accomplish more projects and maintain better customer relationships.

Outsource tax preparation to tackle this challenge, and it will allow you to focus more of your time on strategic tasks rather than dealing with routine compliances.

With time on their hands, your firm’s accountants can offer advisory services and engage with clients to understand their requirements better and build and explore newer synergies. The whole idea is to strive for optimum workforce management wherein your internal staff is primarily busy in business growth activities, especially those that deliver more value and are high margin.

The benefits of tax outsourcing go beyond saving you money for routine tasks. They also allow you to increase your revenues by expanding your reach to accommodate more clients.

If you are uncertain about outsourcing tax preparation and working with an accounting outsourcing provider, this article will walk you through a strategy that will help you make the most of outsourcing.

Let’s get started.

1. Acknowledge the need for outsourced tax preparers

Before considering tax outsourcing, your accounting firm and staff must recognize its need. The fear of redundancy always exists in employees’ minds, and as can be imagined, this results in increased levels of stress and can impair performance. Making them feel safe about their jobs and helping them realize how outsourcing tax, accounting, and bookkeeping tasks will benefit them and their firm is a crucial part of your job as an accounting firm owner. They need to understand that outsourcing will free up their time, which can be better invested in other activities that add to their skillsets.

2. Identify the Scope and Scale of Work

Compile a list of the administrative obligations or compliance actions you need to complete. Forecasting the work coming your way in Tax Season 2022 is a great way to define the scale of work. This allows you to identify the capacity gaps in your firm and the number of outsourced tax preparers needed to build capacity. The whole idea here is to adopt a strategic approach towards tax return preparation outsourcing.

If your assignments are not pre-planned and variable in number, you can select the pay-as-you-go model. In this case, you only pay for the number of hours the outsourced accountants or tax preparers have worked for you, as and when tasks are given to them.

When you believe you will have enough outsourced tax assignments for a resource to work full-time, you may want to use a Full-Time Equivalent or FTE model.


3. Select your outsourced bookkeeping firm

If you want your firm to benefit from the benefits of outsourcing, make sure you partner with the right provider.

Companies should verify the qualifications and certifications of professionals working with the tax outsourcing provider. Determine whether the firm you plan to hire has experience in preparing tax returns, tax planning, and other services around tax that your clients need.

Taxation is intimately linked to the services portfolio of an accounting firm, and therefore outsourcing to the right services provider is of paramount importance.

When you choose to outsource tax preparation, do so with a company that brings a wealth of qualities to the table, including a security-focused approach, experience, a commitment to achieving quick turnaround, and a long list of satisfied clients.

4. Check whether the outsourced bookkeeping company meets your requirements

Does the services provider offer a free trial? It is advisable to perform a trial run with the shortlisted companies for outsourced tax services to test their competency. Moreover, it would be best to determine the turnaround time for work and the quality standards achieved by the provider. Verify if it matches your clients’ requirements. Typically, you are best served by working with a company that can complete tax tasks quickly while maintaining high standards.

Therefore, find an outsourcing provider who can meet all your needs (read: the needs of your clients).

5. Look for synergies

It is possible that some firms see tax preparation outsourcing purely through ‘savings’ tinted glasses, and this is not necessarily a bad thing. A significant benefit of outsourced accounting is its affordability and ability to build efficiencies.

However, outsourcing provides more value if you think long term. It is necessary for you as an accounting firm owner to ask yourself questions about how a partnership can deliver long-term benefits that go beyond cost savings.

Many synergies can be extremely rewarding, relating to client relationships or the mandate for specialized advisory services.

tax outsourcing collaboration


To outsource successfully, it is vital that your decision is well-thought-out and grounded in research. When moving to an outsourced model, plan your outsourcing and understand the internal challenges (if any) you might encounter. This will pave the way for a more comfortable and ROI-driven experience when you outsource taxation services.



ABOUT Indrajeet Pradhan

My name is Indrajeet Pradhan and I am the Marketing Manager for QX Accounting Services – North America, and wordsmith behind the QXAS blog. Hope you enjoyed reading this piece. My job is to help accountants access the knowledge they seek through blogs, guides, and other content assets that are meaningful and actionable. More Posts(27)  

Originally published Nov 15, 2021 08:11:51, updated November 15 2021

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