When is the last time you really took stock of your workflow for tax season? Now that you have a little more free time and fewer clients breathing down your neck, it’s a good opportunity to review your current processes and tools before the season gets started again.
I highly recommend you start your evaluation process by writing out a detailed step-by-step workflow on how you prepare a tax return. This can look slightly different for new vs. existing clients, so I recommend you write out a separate workflow for each. And when I say step-by-step, I mean every touchpoint from the initial contact to data collection to delivering the finished return and getting paid.
Once you have this process all written out, go through each step and rate how your firm gets through each step using a scoring scale of one to five:
- Needs a lot of improvement
- Could use some work
- Smooth sailing
Rating your performance helps you see which part(s) of your process could/need to be more efficient for the upcoming tax season. Ask yourself: Can anything be automated? Is there a step in the process that always causes delays?
If your office has staff, take this time to identify who is responsible for each step and evaluate whether they are the right person for the job. Get the staff involved by having them rate each step as well to help you get different perspectives on what could be improved in your firm’s process.
Going through this step every year has been the biggest enabler of growth for my firm; it has allowed me to see exactly where my strengths and weaknesses lie, and what technology or staffing I need to put into place to be more efficient for the next tax season.
Now that your workflow is all mapped out and you know who’s responsible for each step, it’s time to explore the technology that will make the process run like a well-oiled machine.
Which tax software will you use for this upcoming filing season? Take the time now to evaluate your tax program to make sure it will not only fit your budget, but also your current client needs and the needs required for your expected growth. Intuit® ProConnect™ has cloud-based software – ProConnect Tax Online – that can make running your tax practice a snap from any computer that has an internet connection.
As you test out different options, prepare a few practice returns using your most complicated tax returns from the prior tax season, comparing how the new software you are evaluating stands up to your existing software. Ask the following questions:
- Do you get the same results?
- Even with the learning curve, how much time did it take to enter all the information?
- Does the final return print to your liking?
- Are there any integrations that would make entry and delivery simpler?
- If you decide to make the switch, how would your old data be converted into the new tax program?
- Are there any local or in-person training sessions out there to help you learn how to navigate the software and reduce the learning curve? (For example, Intuit ProConnect has an online education center that makes learning the software simple.)
These are just a few things to consider when and if you decide to switch tax programs.
Now let’s think about how you will manage your digital data. Where will you save and store your digital files? Do you have an external hard drive or a local or cloud-based server? How often and where will the files be backed up? How will be your file structure be mapped to make finding those files easy? For example, my office uses a folder structure that looks similar to this: Taxes -> Client Name -> 20XX -> 20XX client copy.pdf.
It’s also a good time to archive old digital files. If you haven’t already done so, now is the perfect time to create a simple policy detailing how many years of data you will actually hang on to before you purge and/or delete client files and folders. Don’t forget to make sure this is outlined in your client engagement letter.
Speaking of engagement letters, consider taking the time to find a local attorney to review your current engagement letter, ensuring you are covered for the services you provide and it’s updated to include any new policies or procedures you have put in place.
It’s time to update your tax organizer. Update it to include questions pertaining to any new tax law changes, as well as due diligence questions to better serve your clients and ensure they are eligible for all the deductions and tax credits they are claiming. Also, decide if you want to move from a printed organizer that gets mailed to a digital form that is sent out and completed electronically. Did you know Intuit Link has an easy-to-use digital organizer and portal that saves on time and postage?
Don’t forget to review your pricing. Are you setting an annual price increase across the board? Are you moving from a flat fee to value pricing? It could be a great time to consider value or bundled pricing, including multiple services such as tax preparation, tax planning, bookkeeping or other accounting services. No matter what you decide, making a decision now gives you plenty of time to give your existing clients a heads-up that a price increase is coming.
How you will you collect your clients’ official tax information? Are you opting to use a secure client portal this year? If so, make sure you create detailed instructions showing your clients how to use the new portal system. Creating a downloadable PDF or a simple screen share tutorial will make it easy to train your clients with very little effort on your part.
If this isn’t your first rodeo, it’s also a good idea to gather feedback from your existing clients. Send them a brief survey to see how satisfied they are by using a service such as Delighted. Take the time to review any comments your clients share to help improve your practice.
Download this handy checklist so you will have all the steps to tune up your practice prior to tax season at your fingertips.
Did I leave anything off my list? Is there anything that you do every year to make sure you and your team are ready? Tell me in the comments below so I can add to this list and implement it as well.