HOW CPA FIRMS CAN PREPARE FOR THE BUSY TAX SEASON?
The American accounting industry is busiest during tax season. CPAs are pressed for time, working under tight deadlines, and frequently keeping one eye on the computer and the other on the clock. Despite the fact that CPAs and EAs are extremely busy throughout tax season, they always feel that they could have done much better. To address their challenges with tax season productivity, several accounting companies are turning to tax preparation outsourcing.
Tax preparation is the process of creating tax returns for individuals or businesses. It is a laborious and complex process that requires meticulous examination of the financial activity for a specific time period. Employing a third-party service provider to prepare your clients' taxes is known as tax preparation outsourcing. The issue of productivity has long existed. Ad hoc/temporary recruiting, working overtime, ad hoc uninformed technology integration, and so on and so forth are just a few of the traditional techniques accounting companies have used to combat this issue.
How to better plan for the upcoming tax season?
1. Plan ahead before tax season begins:
Since we aren't blessed with the gift of foresight, the next best thing is to go out and start posing some inquiries about how much work you anticipate obtaining during tax season. In terms of work, how much do you anticipate the tax season will bring your company? Your better planning will be aided by knowing the answer to this query. However, examine this query more closely. Consider whether you want to expand your clientele or keep with your current customers. Even more work from your current clientele might cross your mind. Additionally, inquire of your consumers whether there is a possibility that they will continue to use your company for tax preparation services in the interim. Ask your clients if there's a chance they'll give your business more tax preparation work in the middle or near the conclusion of tax season.
Depending on the information you receive at this point, you'll be able to manage the workload you know is coming your way and determine if you have enough resources to do it all. If it isn't, you can implement a strategy to find new customers and projects.
2. Concentrate on optimizing the Process:
Although you are selling your experience as an accounting firm, this does not mean that you shouldn't have procedures in place to offer it to your clients. There are a number of crucial procedures that take place between the time the client sends in their financial records and the time you submit their tax returns. The process is composed of these steps. Consider carefully whether your processes are holding your organization back or are set up optimally before tax season begins. The best course of action in this situation is to assess how long each step takes and pinpoint the issue. For instance, if you requested the client's preliminary financial details, do they provide you with the preliminary set of financial information all at once or piecemeal, for instance? Do certain customers need to be reminded more than once to supply the required information? When determining process efficiency and your deliverability objectives, take this time into account.
3. Address Your Staffing Issues:
There has been a persistent lack of accounting talent in the sector. This means that increasing your production during tax season requires appropriate staffing. But are there any accountants and tax preparers you can pick from just for tax season? It's critical to keep in mind that similar thinking will also be present in other businesses. There is a demand and supply gap and a very small pool of talent.
31% of businesses identify finding and keeping qualified staff as a serious challenge. Do you have a plan in place to avoid a resource shortage because it could become a significant concern for you as well. You don't want to find yourself in a scenario where clients are willing to provide you tax preparation work but you lack the funds to handle it. Accounting firms frequently use outsourcing services to address workforce issues. But this shouldn't be a temporary fix.
4. Focus on Customer Orientation:
54% of customers acquire packaged accounting services. Therefore, they choose to engage with a company that also provides bookkeeping services rather than one that only provides tax preparation services. To scale your business, you need to adopt a comprehensive strategy. Scale your services only when the market demands it; don't do it because your competitors are doing so.
5. Adopt external Resourcing:
One strategy to make sure your business grows quickly and if necessary, can shrink as needed, is through outsourcing or external resources. Cost is the primary factor cited by Deloitte as the reason why companies outsource. Although this is a significant advantage and outsourced accounting businesses save a lot of money, CPA firms must also consider outsourcing in terms of scalability.
Choose an outsourcing partner who specializes in US tax and accounting regulations. Analyze the expertise and skill sets of their accountants as well as the engagement models they provide. However, things don't end there. Make sure you are completely familiar with the software they use and the infrastructure of their distribution centers. The same holds true for their communications system, which should be top quality. Additionally, confirm that they have a BCP plan in place that enables them to continue working regardless of the situation.
India is a very popular destination for accounting outsourcing because there are many companies there that can meet your needs. The solution in this situation is to conduct in-depth market study to identify the services provider that ideally suits your wants.
Why should you consider outsourcing your tax season responsibilities?
The tax season is typically the busiest period of the year for accounting businesses. The final quarter of the year, which is basically make-or-break for the entire year, is measured by the revenues your company makes. Only 4% of tax preparers believe that taxpayers are aware of the evolving tax regulations, according to a recent National Association of Tax Professionals survey. This necessitates having longer talks with clients, looking for documentation, and sending reminders frequently.
It is a laborious and complex process that requires meticulous examination of the financial activity for a specific time period. Yes, both for the tax preparers and their clients, that is the typical situation during tax filing season. Your workforce puts in a lot of effort and may be under a lot of stress because they take the brunt of the criticism. If you want to use a third-party service provider to help you get through the busy tax season, whether you're a CPA or an accounting company, you must take care of data security, tax preparation, accounting knowledge, flexible engagement models, pricing, and cutting-edge infrastructure.
An outsourced tax preparation services providers' primary objective is to complete the task quickly and without missing deadlines. You can benefit from outsourcing by receiving high-quality work from qualified individuals who are also committed to data security and compliance. You can save time and money by having professionals handle the tax preparation needs of your accounting firm. But to take advantage of all the advantages listed above, all you have to do is team up with the appropriate tax preparation outsourcing services provider.
Since businesses gain so much from dealing with some of the greatest suppliers of outsourced tax preparation services, CPA companies have been outsourcing more and more to India in recent years. Accounting firms seeking to expand can benefit from outsourcing to India because of cost arbitrage and the time zone difference. We recommend all readers to analyze the firm’s needs and adopt practices that best reflect the company policy and adhere to its goals.
Consider using tax preparation outsourcing services to save time and money and reduce stress. Many companies provide this service in countries such as India; however, choosing a company with experience in meeting the IRS requirements for preparing tax documents is essential. Entigrity is a reputable accounting offshoring provider that offers expert advice, personalized service, and cost savings. Their resources allow for the efficient and accurate completion of tax preparation tasks. If you are seeking a reliable and cost-effective solution for handling tax preparation, consider using offshoring services like those offered by Entigrity.
Entigrity™ is a trusted offshore staffing partner to 600+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants,' Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management; still, you are left with the least to worry about compliance, payroll taxes, overheads or any other benefits.