As soon as the tax season starts in the US, accounting professionals and CPAs get their hands full, smoothing out tax preparation and filing the subsequent returns. This involves gathering data and organizing documents.
Tax filing is an ongoing process that runs throughout the year and has great responsibilities attached to it.
When ignored, things can run out of hand at the eleventh hour and become chaotic. Therefore, CPAs and accounting firms must prepare in advance and stay ready for the accounting season.
In addition, even an insurance agency must ensure that the taxes are paid before the deadline to avoid penalties from government agencies. Availing of all the tax deductions is also necessary, and professional insurance accounting services can help you in this regard.
Plan for Tax Season Before it Gets Started
Procrastination is the worst thing to do when you are a CPA or an accounting firm.
Even the best professionals cannot estimate the work coming their way accurately; it is best to reach out to your clients and ask them questions about how much workload they would be sending your way.
Also, let them ask you questions. Clients may wonder when car insurance is tax deductible or whether inherited assets need to be reported, and this can tell you what their future needs will be.
What amount of work are you expecting to flow in your way as the tax season kicks in? as soon as you can estimate, you will have ease in preparing for it. However, you must break down the question into smaller parts, including:
#1 – Will you work exclusively with your existing clients?
#2 – Will you try and get new clients?
#3 – When and how will you get tax work from your clients?
With this information, you will be able to get the desired resources arranged for your taxation needs and also calculate if the work you will be getting is enough for your existing resources.
Work on Your Staffing Needs
The accounting industry has been dealing with resource shortages for a long time. This means that majority of the tax firms are working with limited staff, and with the tax season closing in, they need better staff planning to boost productivity.
You must also consider your competitors who are operating in the same way and doing business. You must ensure that the supply and demand gap in your staffing is dealt with effectively.
The above chart shows that 31% of accounting firms in the industry claim recruiting and retaining good employees is a major challenge. You might be one of these accounting firms if you do not plan your resources well right now.
To overcome the staffing challenge, smart firms are now utilizing tax preparation outsourcing services.
Consider Work-Life Balance
With tax season growing big, accountants and CPA accounting services providers need to work for extended hours. The working hours stretch over 10 hours a day and can take a toll on your mental and physical health. As a result, striking a work-life balance becomes a tough challenge for CPAs.
You must get as much support from your friends and family as possible. When you have three factors (balancing work, family, and accounting reporting) in the equation, negating the first two can hamper the third component easily.
If you find you are running short of staff and your existing tax preparers are overburdened with the work coming your way, you must consider tax preparation outsourcing services.
Choose Tax Preparation Outsourcing Services
Outsourcing has become a savior for tax firms during tax season and beyond. To become a profitable accounting firm, you must have a clear understanding of tax preparation outsourcing services and how it works.
Tax outsourcing services work seamlessly with your internal department wherein:
- You send them scanned client documents for tax preparation.
- The tax preparation services provider then uploads the scanned documents and relevant tax files to a US data center.
- These documents are accessible to Offshore taxation professionals, who then organize them into a Web-based file and process tax preparation.
- The returns are sent to the accounting firm in an electronic file which can be edited if needed.
Tax preparation outsourcing services can contribute greatly to an accounting firm and CPA’s productivity and efficiency. With tax preparation professionals taking the preparation job, CPAs have more resources to dedicate to other core activities and business processes.
In addition, outsourcing firms have the best-in-class professionals who are trained and verified to work on the tax preparation process and deliver exemplary results.
With tax preparation outsourcing, you can take up new clients which you would otherwise turn down due to a lack of resources. Also, you can save the hiring cost of additional staff and other expenses associated with the staffing for the rest of the year.
Automate Processes to Eliminate Errors and Streamline Workflow
The taxation industry was already suffering from great burnout concerns which got intensified with the “Great Resignation” prompted by the Covid-19 pandemic.
The turnover rate in the industry skyrocketed as soon as the lockdown was imposed all across the US. This made processes sluggish and affected the profitability of CPAs significantly.
The smart players of the industry took a better route by adopting automated accounting software that eliminates manual work from the process.
The accounting software options available in the market took care of the statement collection, data entry, reconciliation, and workflow reporting for accounting.
Moreover, accounting software can easily handle the tedious job of data entry and also make data available to CPAs in real time. Therefore, the best outsourcing services companies use this software, helping CPA accounting services providers save costs further and earn efficiently.
Any accounting firm operating without cloud-based software in the current times is falling behind the competition. With tax season closing in, you stand no chance against your peers who have adopted automation to eliminate manual jobs and errors.
Moreover, with the increasing rate and complexity of real-time e-commerce transactions, accounting firms and CPAs have a tough battle to fight, for which automation software for accounting processes can serve as a weapon.
Make Reviewing Client’s Documents a Monthly Process
Working on your client’s bank statement at the end of the year makes the job even more complicated. The more clients you have, the worse the workload will become on your staff. Make it a habit to review your client’s statement every month.
You can always request that your clients share their bank statements with you on a monthly basis. This will save you from unending efforts of sifting through the client’s bank statement for a year all at once. Also, this eliminates errors that often result from excess data entry in a limited time.
By eliminating these errors, you can file returns in time, building a credible client professional profile and avoiding incorrect or fraudulent tax return issues.
The accounting industry is evolving, and changes are rapid. More professionals are retiring from the industry than coming in, which has created a huge gap between supply and demand.
Therefore, it is important to adopt new technologies to overcome ongoing challenges. Technology allows accountants and CPAs to perform their jobs efficiently and eliminate errors. Moreover, they can build strong relationships with the clients, building credibility and securing better profits.
Accountants and CPAs must manage their staffing needs and bring new staff on board as soon as possible. It is better to trust credible tax preparation outsourcing services to take up your business’s challenging tax preparation job while focusing on other strategic matters.
The main stakeholders of accounting firms and small businesses, as well as CPAs, can dedicate their minds and resources to the core business activities for the current and upcoming years.
You can boost your productivity with tax preparation outsourcing services. Search for the right service provider now and get the best services that align with your scalability goals.