5 Tips for CPAs to Improve Peak Tax Season Productivity

Tax season is the time when accounting firms in the US are busiest. CPAs scramble to get work done, battle stiff deadlines, and generally have one eye on the clock and another on the computer. Even though CPAs and EAs get really busy during tax season, they always end the season feeling that they could have done much better. This is a key reason why many are moving to tax preparation outsourcing for CPAs and accounting firms to sort out their tax season productivity issues.

Productivity is an age-old problem. Unfortunately, accounting firms have been fighting this problem with legacy solutions like ad-hoc/temporary hiring, working overtime, uninformed technology integration, and so on.

Tax season doesn’t have to be synonymous with stress for CPAs. Instead, thanks to the growing trend of outsourcing tax preparation, it can be a period of strategic operation and enhanced efficiency. By delegating the intricate tasks of tax preparation to specialized offshore teams, CPAs can navigate tax season with a new level of finesse.

The integration of outsourcing tax preparation into the workflow of CPAs isn’t just about offloading work; it’s about transforming the way tax season operates. By partnering with dedicated professionals who focus solely on tax preparation, CPAs gain the freedom to concentrate on core business activities and client relationships. This strategic move can convert tax season from a period of missed opportunities into one of growth and client satisfaction.

Furthermore, this approach is not just a stopgap for the busiest months; it’s a sustainable, year-round solution. Outsourcing tax preparation provides a flexible workforce that is adept at handling fluctuating volumes of work without the need for CPAs to commit to long-term hires. It offers an agile response to the ebb and flow of tax season, ensuring that firms are fully equipped to manage their workload without the added pressure of hiring and training temporary staff.

By embracing the practice of outsourcing tax preparation, CPAs and accounting firms are not only resolving the productivity puzzle but also stepping into a new era of strategic business practice. This is where foresight leads to better profitability and where time management translates into enhanced client service. With the right outsourcing partner, tax season can become a showcase of efficiency and expertise for CPAs.

 

1. Start Planning Before the Tax Season Kicks In

We are not blessed with foresight, so the next best thing is to go out there and ask some questions regarding the amount of work you hope to get in the tax season. How much work do you foresee coming your firm’s way in the tax season? The answer to this question will help you plan better. But, drill down a bit on this question. Think about whether you are going to stick to existing clients for your business or hunt for more clients. You could even think of getting more work from your existing clients. Also, ask your clients whether there is a chance of them sending more tax preparation work your firm’s way during the middle or towards the end of the tax season.

The information you get at this stage will tell you whether you have enough resources to handle all the work coming your way; and, more importantly, whether all the work you know is coming your way is enough. If it isn’t, you can set in motion a plan to acquire new clients and new work.

2. Focus on Process Improvement

As an accounting firm, you are selling your expertise, but this doesn’t mean you shouldn’t have processes in place to deliver this expertise to your clients. Right from the time the client sends in their financial documents to the time you file their tax returns, there are a series of essential steps that are happening.

These steps make up the process. Much before the tax season kicks in, think very carefully about whether your processes are holding your firm back or have optimal configuration.  A best practice here is to evaluate the amount of time each and every step takes and identify the problem therein. For e.g., if you have asked for the preliminary set of financial information from the client, does this happen in one go or on a piecemeal basis? Do some clients have to be reminded multiple times to send in the information needed? Factor in this time while working out process efficiency and your deliverability goals.

3. Sort Out Your Staffing Challenges

There is a prolonged shortage of accounting talent in the industry. This means adequate staffing during the tax season is a prerequisite to improving your productivity. But do you have a pool of accountants and tax preparers who you can choose from for the tax season alone? It’s important to remember that there will be other firms who will be thinking along the same lines. The talent pool is extremely limited, and there is a demand and supply gap.

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31% of firms cite recruiting/retaining good employees as a major issue. It might turn into a major issue for you as well, so do you have a plan in place to avoid a resource crunch? You don’t want to end up in a situation wherein clients are willing to send in tax preparation work your way, but you don’t have the resources to take up this work. Firms typically use outsourced accountants to sort out their staffing challenges.  But this shouldn’t be an ad-hoc solution. This brings us to the next point.

4. External Resourcing is an Answer

Outsourcing or external resourcing is one way to ensure your firm scales up rapidly, and if necessary, you can scale down your association as needed.

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According to Deloitte, cost is the # 1 reason businesses outsource. While this is a big benefit, and outsourced accounting firms save a lot of money, CPA firms also need to consider outsourcing from the scalability perspective.

Look for an outsourcing partner with focused expertise in US tax and accounting standards. Evaluate the skill sets and knowledge of their accountants and the engagement models they offer. Check whether their engagement models fit with your requirements and also ask for client references. Talk to their clients to gauge the quality of their services.

But that’s not the end of it. Make sure you have a very clear idea about the software they work with and their delivery centre infrastructure. It needs to be right out of the top drawer, and so should their communications system. Also, make sure they have a BCP plan in place, which allows them to deliver work without disruption, irrespective of the emergency.

Accounting outsourcing India is very popular because you will find a lot of outsourcing service providers who will be able to handle your requirements. The key here is to do comprehensive market research to zero in on the services provider that perfectly meets your needs.

Something you shouldn’t forget to do in your quest to find the right accounting outsourcing provider is to look at the data security posture of the accounting outsourcing India services provider. Ideally, for the USA, you need to work with a SOC 2 Type II compliant company that has all the security protocols in place to maintain data security and privacy.

5. Customer Orientation Always

54% of buyers purchase bundled accounting services. So, they don’t work with a firm that offers only tax preparation but prefer to work with a firm that offers bookkeeping services as well.

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You must adopt a strategic approach to scale your firm. Don’t scale your services because your competition is doing it; do it because the market is telling you to do so.  If you look at the above figure, you will see that 41.6% of firms are offering payroll services. What happens if you belong to the percentage of firms that don’t offer payroll services, but there is a prospective client who wants a bundled package that includes tax preparation (your speciality) and payroll processing? You might lose that client.

If a few more clients ask for payroll bundled with tax prep, you will realize that you need to add payroll services to your offering and scale accordingly. Scaling, keeping customer demand in mind, will ensure that you deliver the results you are looking for.

This is informed scalability. This allows you to make decisions knowing there is a demand in the market for a particular service and, therefore, you must add more resources (more productivity) specializing in that particular service, or you know there is a substantial number of potential clients who are looking for a set of services that you don’t offer.

Your decision will directly affect your productivity. Scalability and productivity should work together to deliver the ROI you are looking for.

Conclusion

A rapid increase in productivity is not possible unless you work with a firm that offers a service like tax preparation outsourcing for accounting firms. But remember, the move towards outsourcing should be tied to your scalability goals.

Also Read: The Ultimate Guide to Easy Tax Preparation Outsourcing: Get All Your Questions Answered NOW!