During the busy season, every tax preparer will face challenges to their productivity. We’ve collected a few easily-adoptable productivity tips that should help improve your work-life balance and mental health.
If you’ve worked during tax season, you know it’s not for the faint-hearted. The 10- or 12-hour days, the 7-day workweeks, stressed-out clients and colleagues and the loss of normalcy can all take a toll. How you manage these pressures often determines whether you come through for your clients or disappoint them. Therefore, it makes sense to prepare well in advance to handle the extraordinary demands of tax time. Upping your efficiency and productivity will help you sail through the season with a minimum of errors, missed deadlines and unhappy clients, not to mention lawsuits.
Dealing with “the Busy Time”
The busy season for professional tax preparers generally runs from January through mid-April, when federal tax returns are due. Some argue the high season lasts through July when clients file for tax extensions. Whatever your busy time, it’s likely you face an enormous amount of stress during those months, more than any other small business owner does.
Even though tax-preparation software automates your work, you still must battle the human element. Chasing client tax data, following up on incomplete or incorrect information, setting up meetings with hard-to-reach people. Everything creates stress that neither you nor your clients need or want.
Being dependent on clients—and others—is what makes tax time so stressful. You can’t control the timing and quality of their actions. Yet you are ultimately responsible for ensuring their tax returns get filed completely and accurately by the filing date. Is it any wonder the busy season for tax professionals can feel like a “fire-walking” exercise?
How to Prepare for Tax Season
In our article “Off-Season Tax Preparer Tips,” we encouraged you to use the off-season to work on three main goals:
- Grow your professional knowledge.
- Pursue marketing opportunities.
- Enhance your business operations.
The third goal is especially important. Not only do you want to make sure your tax technology—your preparation software and the equipment it runs on—is up to snuff, you also want to ensure that your business practices are as productive and efficient as possible. The remainder of this article will address ways to get more work done and more efficiently to hit your business objectives for the upcoming tax season.
16 Ways to Work Smarter in Tax Season
Since tax time often brings an incredible amount of work, you need to be at the top of your game to finish it all. However, there are only so many hours in a day. Sure, you can log incredibly long hours. But that will have diminishing returns. After a few weeks of 15-hour days, your effectiveness and output will suffer. The better approach is to work smarter. Here are some tips that will help you do more without burning out.
- Project your tax return volume: The first thing is to estimate how many clients you’ll serve in the upcoming tax season. Based on local and national economic conditions, do you expect more people and businesses to use your firm this year for tax work or fewer? Did you aggressively market your firm in the off-season? Then you’ll need to account for more new customers wanting tax returns done. Were significant tax law changes enacted that could push clients to use a tax preparation professional rather than DIY software such as TurboTax?
- Determine your talent needs: If you expect higher demand, you’ll likely need more people to do the work. But hiring them won’t be as easy as it used to be. The accounting and tax-preparation fields are now suffering an employee drought. In fact, 35 percent of firms participating in Accounting Today’s “Year Ahead” survey said recruiting and retaining good employees will be a major challenge in 2022. Given this reality, it’s best to begin recruiting staff early as possible.
- Assess your process effectiveness: Consider whether your tax-return “manufacturing” process is working smoothly. Do all steps flow logically, take an appropriate amount of time and prevent backlogs? By considering your entire tax-return process, you’ll be able to identify problems that will likely reappear in the next tax season. Fixing them ahead of time is essential.
- Make client communications as easy as possible: Leverage technology to simplify client communications during tax season. For example, set up a secure client document-sharing portal such as SmartVault. Use DocuSign eSignature to get electronic signatures. You also may want to eliminate chasing W-2 forms for clients from your task list. Advise them that this is their responsibility. This will give you more time to work on tax returns.
- Adopt a “start when ready” philosophy. The basic rule is this: never begin work on a return unless all required data is available. This means you’ll need a quality-assurance checklist to ensure all the pieces are in place before work begins. The biggest downside to this approach is getting clients to submit their data early in the process. Once they do, you can quickly complete your work without having to search for missing information.
- Enhance your personal efficiency. How you begin your day is important. Keep life normal. Eat a good breakfast, do your exercises, read the news. Whatever you normally do to start your day, keep doing it during tax season. Then when you arrive at the office, avoid multitasking. Studies show this significantly reduces personal productivity. Also, heed the law of diminishing returns. This refers to the tendency to generate less work per additional investment of time and energy beyond a certain optimal level. In other words, working 16 hours a day will not produce 100% more work than working eight hours. Reason: as your day grows longer, you’ll get tired and work less efficiently and accurately. So try to determine your optimal workday—i.e., the maximum number of hours you can work without making more mistakes.
- Deploy powerful technology. Use the latest, fully-featured tax software to prepare returns. Since time is profit, buy the best software you can afford and download all updates before the beginning of tax season. Springing for the best hardware is essential, too. This may involve equipping your computer with multiple monitors or one large one to help you to see source documents, input screens and the resulting tax return at the same time.
- Set client expectations. It’s important to let your clients know what you expect from them. Many tax preparers give each client a memo that lists every information item you need to prepare their returns and the date you need them. This may include getting access to their accounting system, viewing their trial balances and bank reconciliations and seeing proof of inventory. Having last year’s tax return in hand is a good starting point for this year’s document. This allows you to request the same information provided last year. If the client doesn’t have it, ask why not.
- Try to preschedule client meetings. Try to schedule appointments with your long-time business and personal clients at various times, so you don’t get overwhelmed. This is important because clients tend to procrastinate. They tend to show up at the last minute—together—stressing you and your team’s ability to respond. You also want to think about balancing client meetings with production work. The key is not to fragment your “brainwork” sessions with too many meetings. For example, if you’re sharpest first thing in the morning, consider leaving the first few hours of every day open for intense tax-return thought work. Then, if possible, schedule client meetings in the afternoon.
- Go digital whenever possible. The process of digitizing paper files continues apace. Today, more documents live only in digital format, making workflow more efficient and allowing remote staff to participate in tax-return creation.
- Adopt a “few-touch-points” philosophy. Train your staff to aggregate questions for senior staff and partners so they can answer them in one pass. Contacting them every time the preparer has a question wastes time and reduces each party’s productivity. As a general principle, encourage staff to answer their own questions before kicking them upstairs. They should take the latter step only when their research fails to uncover an answer.
- Track the life of a tax return. Due to each tax return being, in essence, a project, use project management software to track where it is in production. You should know when a return enters the door, is in process, is in review, and is sent to the client.
- Pay attention to your body. The human body and mind can only take so much work. Try to monitor how you’re feeling throughout the day. When you begin to sense that you’re getting tired, take a break—continuing to work while fatigued will lead you to make unforced errors. You’ll waste more time fixing them than if you took a break in the first place. And always leave the office after a hard day’s work. If you spend too much time at your desk, you’ll likely grow stale and lose focus.
- Go digital in the filing and delivery stage. Although there will always be those who prefer paper returns and manual filing, this is highly inefficient. Strive to move all clients to your digital workflow, using digital signatures and tax-return copies, along with e-filing of returns with the IRS.
- Communicate with clients throughout the process. Commit to full transparency. You want clients to know precisely where their return is in the process, when they will be completed and what problems have arisen and been resolved. Finally, when they’ve approved the return for filing, thank them for their support and continued business.
- When tax season is over, reward yourself! Plan for a vacation or other incentive at the end of your busy season. If you have employees, be sure to reward them for all their hard work.
Finally, Consider Your Professional Liability Insurance
If you follow the above tips, chances are you’ll complete all client returns on time and without mistakes. However, your professional liability insurance will protect you against client litigation in the unlikely event you do.
During the off-season, consider evaluating your current tax preparer professional liability insurance. 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 upgrade your policy periodically, 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 tax-preparation 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. The last thing you want to worry about during your busy tax time is a client suing you for making a mistake on their tax return.
If you’d like to receive a professional liability insurance check-up, schedule a free consultation with 360 Coverage Pros. Protection is available for as little as $23.33 per month.
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