Although tax season can be a very lucrative time of year for CPAs, it can also be a time of intense pressure and stress.
With deadlines to meet and valued clients to keep satisfied, it’s not uncommon for errors to creep in, even for the most experienced of CPAs. However, there are a few ways to plan for this time of year, that can help prevent the making of tax season blunders, and outsourcing tax return preparation is just one of them.
To prevent the making of errors during this busy period, here are 5 blunders you should try to avoid making:
- Not taking advantage of technology
Tax preparation software can help CPAs streamline the entire process, and all but eliminate the making of mathematical mistakes, yet many companies still aren’t leveraging this technology to their advantage. This, coupled with an integrated accounting system, can help CPAs track their business costs, estimate taxes, streamline billing, and take advantage of any tax deductions that may be available.
There are some CPA firms that have access to this technology, but are unable to use it to their advantage due to a lack of understanding or training, or an unwillingness to embrace it as a helpful tool. In these circumstances, the best solution may be for CPA firms to outsource their tax prep and planning requirements to an experienced third party, who likely already use the latest technology to assist them.
- Not implementing a robust follow-up system
Failure to put a sound follow-up system in place, is a commonly made mistake by many CPAs and accountants. With such a lack of organization comes the missing of deadlines and available deductions, as well as the paying of hefty fines, none of which help instil client satisfaction and loyalty.
However, by regularly updating client information, scheduling reminders for any upcoming deadlines associated with filing, arranging for a systematic billing process that includes following up on invoices that haven’t yet been paid, and putting a tracking system in place that helps them stay up-to-date with Quarterly Estimated Payments, CPA firms can avoid penalties or interest being incurred.
Again, outsourcing can help alleviate much of the stress associated with these challenges.
- Failing to use a checklist
It’s all too easy for CPAs and accountants to overlook critical information when they haven’t compiled a clear and accurate document-checklist for filing returns. Mistakes can also be made, and tax deduction opportunities missed out on in the absence of a checklist.
Find an outsourcing service provider who have organized systems in place for tax prep and filing, and half of the battle is won.
- Not taking advantage of outsourcing
Staffing issues can easily give CPA firms even more stress during tax season, but this can easily be resolved with outsourcing. Costing a lot less than hiring temporary or permanent in-house staff, outsourcing gives CPAs and accountants access to a large number of skilled professionals, all ready to jump in and help at the drop of a hat. Pay only for those services you require, as well as the number of hours needed, and it should work out as a highly cost-effective and convenient solution to staffing issues at any time of the year, let alone during tax season.
- Hurrying to close the books
With so much pressure to close the books before impending deadlines, harried CPA firms may struggle to keep up, which can easily lead to inaccurate tax returns and financial statements; bad news for any business and their clients.
Avoiding these mistakes is simple with a little organization, and tax preparation outsourcing, however. Being organized and accepting help when needed, are both things that are crucial to the prevention of tax season blunders, and leaving enough time to review returns before they’re filed, is equally as important.
Follow the tips above to glide through tax season like the pro that you are!
