Surviving the Tax Season with Tax Outsourcing – 3 Essential Tips for CPAs

Tax Season 2022 is here. It’s important to get out of the holiday mood (there will be a hangover) and start thinking about how you are going to make this tax season work for you. You might have had a difficult going in 2021, and might want to put the foot on the pedal this time round.

The question is, what do you do differently? How do you scale and build capacity without adding substantially to your overheads? How do you address the talent shortage that you will face if you want to hire seasonal staff? There will be plenty of questions in your mind, but one answer. 

Outsource tax preparation.

Mixed Feelings about Upcoming Tax Season

Source

Accounting Today, came up with its yearly survey underlining The Year Ahead, and what we see is a palpable lack of excitement concerning the upcoming tax season. A number of CPAs think it will be the same as last year, and some believe it will be worse. 

2021 was a season that happened in the midst of a raging pandemic (we haven’t seen the back of it yet), and tax professionals had to comply with a slew of regulatory changes, the challenges associated with hiring new employees and many more difficulties along the same lines. No prizes for guessing; most CPAs think they will be challenged in similar ways in 2022. All indications are that their worst fears might come true.

As a CPA, should you resign yourself to fate? Or do you look at the options on the table and implement the solution that you know will ensure Tax Season 2022 will be better than the year gone by?

Of course, you choose the latter.

Tax Return Preparation Outsourcing – Empowering CPAs in the Tax Season

We all know how difficult tax season can be and you need all the support your can muster, to prepare more taxes, prepare them quickly, accurately and at the same time ensure your other accounting services remain unaffected.

While you might want to scale your tax preparation to address the work coming your way in the tax season, this isn’t easy because you are competing with other CPAs trying to do the same thing. They are trying to build capacity with seasonal talent. The best tax preparers might already be taken, or for that matter, other firms might have seen the need to bolster their team, much before Tax Season 2022. 

There is also the chance that you are battling downward price pressure on your services, including tax preparation, and while you want to add to your team, the commercials don’t make sense. 

What do you do?

Outsource tax preparation to outsource these challenges to a provider offering tax return preparation services. Immediately, you get the power of scalability by accessing talented tax professionals—these work on your tax preparation projects, sitting out of an offshore delivery center. The result – you not only scale but also do so at far reduced rates than you otherwise would have incurred. 

Imagine a scenario wherein you might have achieved ‘x’ revenue before tax outsourcing. Still, after signing up for this engagement model, you can do ‘2x or 4x’ the amount of work, thus increasing your revenue. You are growing your firm’s productivity, boosting revenue, and all this without experiencing a strain on your overheads.

That’s the kind of competitive advantage you need in Tax Season 2022. 

How Do You Maximize the Returns from Tax Outsourcing?

Now that you are ‘convinced’ you need outsourcing to fight the battle from your side of the ring, how do you ensure you can leverage it to the hilt. 

Here are a few tips:

Search for a Reputed Provider

Working with a tax outsourcing provider shouldn’t be an act of desperation. On the contrary, it should be a well-thought-out strategic move that should be taken with a great deal of care and forethought. 

So how do you search for reputed providers? It is not a difficult task. Go through the names of the providers you have found through the email communication they sent your way, the references you received, and the names you found through Google search results. 

Evaluate them, prepare a list, ask them the right questions and judge their skillsets by giving them trial work. Work with someone who also meets the various security regulations and comes with the necessary accreditations.

Long Term Approach

Yes, you might be using the outsourcing provider’s services for the tax season, but think of this as the first step towards building a long-term relationship. When you start working with the provider, you will understand the value they bring to the table. Check whether this value can transcend tax preparation and strengthen the other compliance services you offering such as bookkeeping, payroll, and more. You might find that you can explore new synergies that further benefit your firm.

Capitalize the Free Time

Tax return preparation outsourcing is a strategic initiative. Yes, it helps save costs, but it offers way more benefits than just tax outsourcing support. Take ‘time’, for example. It is at a premium in CPA firms, but the flexibility provided by outsourcing helps you free up valuable time that can be invested in business growth activities.

It helps you transition from being a CPA to a business owner. You get more time for high-margin, reputation-building activities and explore new marketing initiatives to add more clients. 

Outsourcing helps grow your business.

Conclusion

There is absolutely no doubt, tax outsourcing services providers will help you OWN the tax season like a boss. The key here is to work with a provider who has experience in this field and brings a lot of value to the table. Identifying such providers will help you experience a range of outsourcing benefits. 

Watch out for our next article on identifying the right outsourcing provider. Also, look out for our podcast on the topic.