How Efficient Was Your Tax Season?by
Now that tax season is over, it’s a great time to reflect on what went well and any opportunities you might have to improve in the coming year. Moreover, by implementing efficiencies in your workflow, you can ensure next tax season is a better experience.
As such, I’ve put together just a couple key ways your practice can run more smoothly in time for the next tax crunch. Remember, it’s not about changing everything, but focusing on one or two key areas where you can make the most improvements:
Create Standardization Across Your Practice
If you have staff in your firm, it can be helpful to create standardized workflows or checklists for completing your clients’ files based on what you found most efficient this year. If you find that you are the one making all the adjustments for the tax return because you hold most of the expertise, you can potentially become the bottleneck to getting the work done.
Spend the time now documenting your knowledge and put together your internal quality assurance checklist to help your staff look for errors or issues in client files. For practices that have technology in place to track tasks in the workflow, ensure there are automated features enabled that indicate if a file is ready.
When you bring new clients on, use a standard chart of accounts where possible so not every client’s chart of accounts is different. This will help you speed up reconciliation work between the book chart of accounts and the income tax line items each year. This will assist in creating more firm-wide uniformity and consistency of knowledge so you can help your staff execute work more efficiently.
Consider Your Software
If you’re not already using a cloud accounting platform year-round, chances are you spent additional time this busy season cleaning up your clients’ files so you could get the tax work completed. Take, for example, Laura Pilkington, owner of New Hampshire-based practice, Accounting Elements.
Her first tax time in the cloud was better than it had ever been before. She used cloud accounting to compile the financials of her clients and says it’s been the easiest January in the nine years that she has been operating her practice.
In previous years she remembers working like crazy to get her clients’ financials to their CPAs, getting up at 6 a.m. most mornings in the days leading up to the deadline. This year, knowing that she had a vacation planned in January, Laura communicated the deadlines to her staff, and by February, most of the work was completed.
“I didn’t even realize it would be possible to have everything completed so early because I’ve been doing this for nine years,” Laura remembers. “There’s just no excuse to have books coming in months late because we look at all of our clients on a daily basis to make sure they’re up-to-date. The day-to-day ability of being in the cloud is the saving grace.”
While many are using cloud accounting software, what I’ve found is that accounting professionals are not using all of the functionality available, often creating more work for themselves. Here are some of these underutilized features:
1. Payroll. I’ve found that some are going outside the accounting platform to make adjustments and then coming back in. By ensuring payroll is integrated into the platform, you reduce the amount of manual work.
2. Practice manager. Utilizing a practice manager tool can ensure a more consistent process and help you monitor work in progress so you know where client files stand and have the ability to measure staff performance.
3. Fixed asset manager. If you’re not calculating depreciation on a monthly basis, it’s important to at least track it in a fixed asset manager throughout the year. This way, you will know what fixed additions there are to make it easier to quickly compile that information at tax time.
4. Customized reporting. Many firms still perform manual calculations outside of their software. Rather than computing summaries of accounts for the income tax return on a calculator or in a spreadsheet, ensure you use the capability of customized reporting to calculate it for you, right there in your cloud accounting software.
Tax time is a year-round effort. It’s really important to stay up-to-date on your clients’ files on a monthly basis, using cloud software, so that tax season each year isn’t so taxing.
Keeping up with your client’s books on a monthly basis throughout the year and deploying some of these tips can ensure that the end-of-the-year client work is nothing more than just some cleanup.
Amy Vetter is a CPA.CITP, CGMA and is an accomplished c-suite executive and board member with deep experience in cloud technology and transformation, creating go-to- market (GTM) strategies to scale businesses nationally and internationally. Amy has held multiple roles in Fortune 500, startup, small company rapid growth, and is a serial...