Proactive planning for your clients' year-end

The root cause of most forms of inefficiency and ineffectiveness in tax departments during busy season is the failure to plan effectively. The reasons why most CPA firms fail to take this imperative step vary greatly, and would probably fill and entire book, but the following three reasons succinctly summarize why so many firms overlook this valuable tool:

  1. Lack of Urgency The seasonality and deadline nature of your business leads to times of peak production and times of valley production. Unfortunately, many firms and their people lack a genuine sense of urgency during non-deadline times of the year. They miss out on valuable opportunities to work smarter and get ahead of the curve.
  2. Inability to Charge. Many firms fear they will not be able to get paid for the engagement planning and organizational processes. Unfortunately, this mindset may cause you to spend multiple hours in March making up for something you could have prevented in probably 30 minutes back in November. Not only have you lost capacity during busy season, but you will probably have to write off time anyway - a double whammy.
  3. Managing to the Exceptions. Often the "we can't do this for every client" mentality exists within firms. And you're right, you probably can't. But why firms continue to manage their processes around the "exceptions" boggles the mind. Develop a plan, target your clients and make it happen.
Managing the Front Door

Upfront client planning, including engagement team meetings and meetings with the client to formulate game plans and expectations, are some of the ways you can manage your front door. Your effectiveness during busy season is directly tied to how effectively you manage work from the minute it comes in your doors.

How well do you manage your tax processes? If you're not happy with your current level of profitability, ask your tax partners the following questions:

  • Are you keeping staff informed about client information and tax items throughout the year so they aren't surprised by something in March?If so, what's the process?How consistent is it?
  • Are you setting expectations with your staff?
  • Are you customizing your client requests using the client's terminology?
  • Are you effective in getting client data into the office early and accurately during busy season?
  • Are you controlling the work that is put into production or does receiving any bit of information from the client signal the start of your workflow?

Would a manufacturer start producing an order that only includes half the customer specifications and raw materials? Not if they want to be profitable. So why do CPA firms start work with only half of their customers' specifications and raw material. In your case, the specifications would be those communications that took place throughout the year between the partner and the client of which the preparer isn't aware. And your raw material is the data needed to finalize the return, of which you need a minimum amount to start preparing the return effectively.

Luckily, there is a better way, And it starts with planning.

Lean CPA
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