If you ask any seasoned accountant what their biggest mistake has been, studies show that not being prepared for the upcoming tax season is by far the winner, and last year's tax season was an especially big issue for accountants. A recent AICPA survey noted that 90% of respondents characterized the 2018 tax season as more challenging than in previous years. In an Accounting Today survey, 77% of respondents also said that tax reform confusion was the most challenging part of their tax season.
That is why it is crucial, on this day, November 1, 2019, that accountants begin preparations for the upcoming tax season. To help our accountant readers of The Rules of Thumb blog from MoneyThumb make sure they are doing everything they can to get ready for tax season we have made a list below of tasks that accountants should be performing now:
- Start planning in the fall--Start pre-scheduling appointments for clients in early November. Many accountants begin meeting with clients during the last few weeks of December to gather information and discuss any changes that may have occurred over the year. Make sure your staff is up-to-date on any changes to tax laws, financial statements, and new auditing standards, either by reviewing the changes in-house or attending training in advance.
- Hire early and be prepared--It's all too easy to sink into the holiday lulls of November and December, but don't wait too long to ensure you have sufficient staff come February. Make sure your roster is large enough to handle the heavy workload, and begin the hiring process months in advance. One great way to bulk up your staff is to hire interns prior to tax season. This not only makes your full-time staff members' lives easier but gives partners and others in the firm an idea of which college students would make good hires down the road.
- Engage clients early--Gather as much information as possible from clients before the end of the year. Begin a client's year-end work—such as audit planning and testing, and updating depreciation records—before the end of the year. Sends emails and letters to clients, advising them of the upcoming schedule and key dates when information is needed.
- Reevaluate your client list--Some clients can be difficult and drain an accountant's time, which can be especially detrimental during the busy season. Maybe this is the right time to consider raising rates and only accepting those clients that are a good fit for your accounting practice.
- Delegate--Lighten your accounting practice's workload by delegating work to other personnel. The fact is, 95% of accountants out there have work being done at higher levels than it really needs to be. The newer hires aren't getting challenged, and the more experienced are clogged up with work. Farming out work early will make things easier during tax season.
- Update your tax season processes--Sometimes, tax return preparation practices don't change. But if inefficiencies exist, consider new ideas and processes and make necessary modifications. Many accountants are now using techniques and tools to streamline processes and reduce the touches and time it takes to prepare a tax return. Review of each process, discussing with staff, and update as necessary makes for a smoother, more efficient tax season.
- Keep hours in check--Tax season often requires long hours, but times are changing, especially with Millennials redefining work/life balance and accountants more than ever in demand. Accountants may want to consider flexible and virtual work arrangements to minimize overtime and allow practitioners to better balance family and busy season demands. Maintaining a positive workplace culture is incredibly important, so it's vital to have a proper plan in place before the busy season even begins aimed to keep employees happy and productive during your busiest time. Individual accountants also need to be flexible and should prepare in advance by figuring out ways to recharge and stay motivated—whether it be yoga, dinner with friends, or walking their dogs.
- Prepare for a crisis--Many things can go wrong during tax season, most of them unpredictable, so don't be overconfident about your ability to get everything done. Fellow CPAs could get the flu. Your office could have a leaky roof. Keep as much work as possible out of tax season and do it before the end of the year. That way, you'll have more flexibility if unexpected surprises pop up.
The Rules of Thumb blog from MoneyThumb believes by implementing the above suggestions early on, you can save yourself tons of headaches when tax season arises. To help you even further, download this free whitepaper from Thomson Reuters titled, Make Next Year the Best Tax Season Yet. No matter what new changes may come in 2019, this report will examine five important steps you can take along with actionable insights and key takeaways to help make the upcoming tax season your best yet.