While many accounting firm staffers around the country are breathing a sigh of relief that the pressing 2018 tax season has come to an end, leaders like you know the real work has just begun. Because as successful as this tax season was for your firm, you know if you want next year to be even better, you need to start planning for it now.
Of course, some challenges come with the territory of having a specific rushed season. After all, no amount of planning will allow you to avoid some of the stress and overtime that comes with the months of January through April. But, there’s a lot you can do to make sure the following four struggles don’t follow you into the 2019 tax season.
- Tax Season Struggle No. 1: A high error rate
Your firm’s error rate is a powerful performance indicator that can help you troubleshoot existing problems with staffing, process improvement and technology. Take a look at your error rate for this tax season and compare it to previous seasons, as well as to industry benchmarks. Then consider what other metrics about your firm have changed, such as the following:
Number and type of returns filed
Number of new or entry-level employees
Ratio of full-time to part-time staff
New technology, tools or processes
Don’t just head into the next tax season with the same processes and approach in place. Evaluate the relationship between these changes and this year’s error rate so your leadership team can determine the best approach for 2019.
- Tax Season Struggle No. 2: High turnover or insufficient staffing
Few accounting firms will ever master the art of capacity planning, which is why each tax season can feel like a big question mark when you start to plan your staffing needs. While you can’t completely and perfectly plan how much talent you’ll need for 2019, you can get as close as possible by taking a very close look at how this year went for your firm.
For example, The CPA Practice Advisor suggests reviewing more complex client returns to see the exact timeline of when the return was prepared and reviewed and build a template of that schedule for the complex returns to come next year. Also, review your payroll history to identify how much overtime your non-exempt full-time staff received, as well as how many hours interim employees worked. Having all of these numbers in the same place will allow your team to make informed decisions about next year.
Once you have an aggressive staffing plan in place, make a point to frontload as much of the administrative work as possible, such as planning, organizing and scheduling. The more work you can get out of the way in advance of the actual tax season, the more efficiently you can deploy the staff you have.
- Tax Season Struggle No. 3: Focusing too much on April 15th
The first of the year through April 15th is the traditional busy season for tax accounting firms. But consider that in 2013, 46 percent of all corporate filers asked for extensions. That means even after a pressing first quarter, firms need to keep staff on hand for the second active season in the late summer when corporate filing returns and six-month extensions come in requesting a wide variety of documents. If your staffing fluctuates throughout the year, make sure you take both busy periods into account, so you don’t find yourself short-handed and overworked on extended compliance work.
- Tax Season Struggle No. 4: Working with clients that aren’t a good fit
If you found yourself doing the math (or just remembering certain interactions) and realizing that many of your clients weren’t a good fit for your firm, you’re not alone: 25 percent of accounting firms surveyed in the National Center for Professional Education’s “After Tax Season Survey,” said they would fire some clients.
If it seems like you’re ready to trim clients at the bottom of your list to make room for better ones at the top, reflect on how you’ll change your standards. And reflect on how you’ll do it. Sometimes raising your rates is the simplest way to weed out clients who aren’t a good fit, other times you’ll need to figure out a professional way to say “No.” Plan how you’ll turn down similar work next year so you won’t be stuck in the same position.
The success of next year’s tax season begins with what your firm does this year. Consider how you’ll overcome and avoid the struggles you experienced this year to clear the way for a profitable and efficient 2019.