Off-Season Tax Preparer Tips

By Lauren Pitonyak

The busiest months for tax preparers are January through July, starting when the IRS begins accepting returns in late January through July when extensions are submitted. Conversely, the slowest months for accountants, bookkeepers and others who prepare taxes are generally August through January.

However, “slowest” and “busiest” don’t do justice to the challenges each period poses to tax preparers. The slow period can be a strange comedown from the peak months. While the busy time can push tax preparers to their breaking points, forcing them to work 60 to 80 hours or more per week. It’s no wonder tax professionals need to rest and regroup before the next tax onslaught begins.

What might you do during the off-season to recover from the peak tax-preparation months?  There are three main goals:

• Grow your professional knowledge
• Enhance your business operations
• Pursue marketing opportunities

You’ll also want to review your professional liability insurance. Reason: If you make a mistake during next year’s busy time, an unhappy client won’t be able to capture your assets through litigation.

Grow Your Professional Knowledge

One of the best things you can do during the off-season to work on your professional development.. This involves not only learning new details about the Internal Revenue Code, but also exploring the capabilities of your tax-preparation software. Here are some professional-development opportunities you may wish to explore:

• The IMA Management Accounting Competency Framework. This is a free online resource that makes you a better accountant (for tax preparers who also do accounting). It features a learning schematic covering firm strategy, performance management, reporting/control, information technology, analytics, business smarts and operations. The framework doesn’t just detail what it takes to succeed in accounting but also provides guidance on how to acquire that knowledge.
• The National Association of Tax Professionals (NATP). This group offers numerous online training courses and resources covering every aspect of tax-return preparation.
• QuickBooks Connect. Intuit’s QuickBooks Connect provides leading-edge knowledge about the field of bookkeeping and how technology can enhance the productivity of bookkeeping firms. It focuses on bookkeeping and bookkeeping technology, as well as on how to better manage small-business finances, especially the process of securing financing. The best part about QuickBooks Connect: Its virtual events and educational content library is accessible online 24/7.
• American Institute of Certified Public Accountants (AICPA). The main trade association for the accounting industry provides an extensive line-up of in-person and virtual conferences, training content, books and other resources. If you want to learn about where the accounting profession is headed, connect with this group. As a member, you can also join AICPA’s special tax section, which provides specialized information highly beneficial to tax preparers.
• Continuing education credits. If you hold an accounting license that requires continuing education, the off-season is a great time to catch up or get ahead on your earned credits. This will not only assure that your license will remain valid, it will give you useful knowledge to apply during your next busy season.
• Professional advancement. The quiet months are a great opportunity for non-CPAs to prep for their CPA exams and for CPAs to acquire another credential such as the Personal Financial Specialist® (PFS), Accredited in Business Valuation®(ABV), Certified in Financial Forensics® and the Chartered Global Management Accountant® (CGMA).
• Knowledge sharing. The best way to solidify your knowledge of the Internal Revenue Code and tax preparation is to arrange to teach a course or seminar on some aspect of the field. That’s because the true test of knowing a topic is being able to explain it to someone else.

Enhance Business Operations

It’s hard to work on improving your business when you’re consumed with work. But once things slow down, you’ll have time to evaluate how well you handled this year’s tax work and how you can improve procedures next year. Here are some tasks to consider doing:

• Evaluate your finances. It’s likely you’ll be flush with cash during your busy time. But don’t just deposit the money and forget about it. Assess your financial position after tax season. Did you hit your financial targets? If not, why not? Were you profitable or did you spend a lot of money on contractors and staff overtime?
• Assess staff performance. How did your team do? Was their productivity exemplary? Did they hit your technical benchmarks? Was customer satisfaction excellent?
• Evaluate tax-preparation technology. With the tax season behind you, evaluate how well your production software performed. Are you still satisfied with it or do you think it’s time to evaluate new packages for the next cycle?
• Evaluate your marketing program. Are you happy with the amount of tax work you completed this year or do you need to generate more clients next year? And what about your non-tax work? In the months ahead, do you have enough work booked? What type of engagements would you like to pursue to make up any slack and how will you pursue prospects?
• Check in with clients. Your slow months are an excellent time to touch base with prior tax clients and non-tax customers. Solicit feedback on how satisfied they are with your recent work. If you uncover quality variances, the off-season is an excellent time to remediate them, be they skill, technology, or procedural in nature.

Pursue Marketing Opportunities

Just because you had a successful tax season doesn’t mean you can turn off your marketing machine and expect all your clients to return next year, along with new clients to replace defections. Instead, use your down time to begin laying the groundwork for next year’s revenue needs. Here are three things you can do:

• Update clients on tax-code changes. Educating your clients about imminent changes will help them get ready for their next return, minimizing the last-minute stress of having to deal with new forms or calculation procedures. This also encourages them to view you as next year’s tax preparer.
• Share helpful articles and worksheets on traditionally complex tax issues. If a client repeatedly gets hung up on a particular matter, use your slow time to help the person get over that technical hump. Again, this helps provide a transition to next year’s work.
• Consider adding non-tax services to provide more slow-season revenue. Services such as payroll management, bookkeeping, enrolled agent IRS representation and personal financial planning are all feasible options.

Review Your Professional Liability Insurance

During the off-season, consider evaluating your current tax preparer professional liability insurance. What to look for? You want to be sure it’s adequately protecting you today, especially if you have added services to your business. Also, when you first entered the industry, you may have bought less protection than you needed for budget reasons. Now’s a good time to revisit the limits of liability you purchased in light of your current business risks and financial resources.

Although it’s a good idea to periodically upgrade your policy, don’t forget the importance of keeping it in force even without modification. You made a great decision to buy it initially. It has shielded your business and personal assets from the malpractice risks you face every day. Why drop an insurance policy that has provided so much value and peace of mind over the years? Consider scheduling a consultation today to discuss how you can have peace of mind as a tax preparer this year.

Concerned about how much you’re paying for your tax preparer professional liability insurance? Check out the coverage available at 360 Coverage Pros, with premiums starting at $23.33 per month.