From the January 2012 Issue.
It’s that time of year again — time to steel yourself for the work that will begin flowing in just a few weeks. For me, January is always like the calm before the storm. You know it’ll hit soon, and you’re powerless to stop it. There’s an ever-present anxiety because you’re not sure how bad this one’s going to be, so you expend a lot of energy thinking of ways to prepare.
Some may tell you that it’s too late; that you’ve done all you can do. That it’s time to just hunker down and wait for it to start, hoping it will be over before you know it. In truth, it may be too late to drastically change the course of your tax season. However, some relatively easy workflow strategies can help you realize timesaving efficiencies and help you better weather the storm.
By polling firms formally and informally, we’ve uncovered five tried-and-true strategies for a smoother busy season. Not surprisingly, most agree that a little pre-season planning and preparation can go a long way.
This is critical. It won’t eliminate unexpected kinks in your busy season plan, but it will help to minimize them. Your firm should have a clear communication strategy for clients, staff and any third-party resources you plan to utilize during busy season. Don’t assume that everyone is already on the same page.
Depending on the size of your practice and your relationship with individual clients, communication may be in person or in an engagement letter. Key elements should include the following:
- Clearly state when, how and where to submit tax information.
- Give the deadline for tax data, making it clear that failure to meet that deadline results in an automatic extension
- Provide disclosure and consent forms.
- Use this as an opportunity to manage expectations, emphasizing constraints on your time.
If you have people going into the field, arm them with the list of information needed for tax season so they can address it in person with the client. Make it part of your year-end planning to tell your client when their work is scheduled and get their buy-in. This gives them an opportunity to alert you to scheduling conflicts such as vacations, board meetings, etc.
It’s important to clearly articulate your expectations for your staff – hours, weekend work, opportunity to work remotely, contingency plans in the event of an unexpected absence due to illness, weather, or personal matters (if this varies from your normal HR policy).
Additionally, if you’re using temporary or seasonal workers, or outsourcing, now is the time to inform that resource of what to expect in terms of a time commitment in order to avoid misunderstandings or over-commitments later.
Finally, set a staff schedule for when you will meet during busy season. Allow some flexibility, but lock in key dates for things like determining when to extend clients to avoid wasting time trying to schedule management discussions on the fly. If you’re planning to meet once a week to review workloads and schedules, do it the same day and time every week and set a standing, manageable agenda that will allow participants to get what they need quickly to balance work and address potential resource issues.
2. Capacity Planning
Two important themes to pre-season preparation: Use what you learned last year as a guide, and do as much as possible before the season really gets going. For example, you might want to run last year’s extension report and prepare these same extensions in early January.
Look at how you handled the larger, more complex client returns last year to see exactly when the return was prepared and reviewed, and build it into your scheduling for this year. Research major tax law changes in advance, and add that intelligence into the appropriate client tasks within your workflow software. For example, you might do a data scan to identify all the clients that will be impacted by the new tax legislation this year, then flag them and add instructions to those tasks universally so the preparer and reviewer have the information at their fingertips.
Coordinate your scheduling and client responsibility early. This tip goes back to communicating expectations and creating a plan of accountability. Utilize software tools like workflow and scheduling to enforce your plan. Mail your completed organizers in early January, and utilize available technology resources for your client data (i.e., Goldman Sachs provides online access to clients’ 1099s, etc.).
3. Prepare for Problems
Let’s face it – there will be glitches, so it’s best to expect them and prepare for how you will handle them when they arise. Create a schedule that carves out time to plan for and address potential workload and bottleneck issues. Use real-time scheduling and workload management tools to get an up-to-the-minute view of all work in progress by person and status to see who’s buried in preparation or review, who’s overbooked and who’s under-booked so you can make those on-the-fly capacity planning decisions.
For example, one firm has a weekly meeting between the scheduler, the audit team leader and the tax team leader during which they review issues, identify chunks of time and conflicts, discuss new unexpected business, and locate additional resources. This allows them to gain a seven-week outlook and move work dynamically within the workflow system. Part of the purpose of this meeting is pre-emptive problem solving. It’s possible that you can schedule tax season well in advance, but there will always be issues that come up.
Another firm relies on its workflow software to see clients with 3/15 and 4/15 filing deadlines to quickly view and proactively address any missing information or other issues holding up the client return. Armed with that view, this firm can proactively work with clients and staff to address the bottlenecks.
Of course, having a real-time view of the work also empowers accounts receivable to stay on top of billing for all the returns that went out that week.
4. Digital Work Environment
The specific software applications your firm employs varies according to the size of your firm, the services you offer and perhaps even your culture. I think we can all agree that, in addition to some software basics (MS Office, Adobe), the following tools enable you to work digitally: dual monitors, scanners, workflow system, electronic file storage (DMS or shared network filing tree) and a portal.
Some of these you can still put in place before the upcoming busy season. You don’t have to make a career out of picking a scanner; just get started. Use the resources available to help you make a good selection quickly: consultants, technology-focused publications, networks and associations, peers, AICPA and state society resources, and websites like TotallyPaperless.com.
Now is the time to make sure that your staff knows how to properly use the tools at their disposal. An Adobe refresher and a plug-in toolbar can empower partners and managers to review online.
5. Process Improvement
Adopting paperless technologies and understanding workflow is at the heart of process improvement to attain greater efficiency throughout your practice. In an ideal scenario, you would have time to create a committee, document current processes, identify best practices, optimize for technologies used, map your new workflow, standardize and train across the firm, and automate workflow for a digital environment.
This late in the game, you may have to settle for focusing on your 1040 process or whatever your firm does most and, if time allows, move onto smaller processes. The key here is to question every step so you’re not just doing what you did last year. Your processes should evolve over time. I know one firm that created teams of employees tasked with flow-charting existing processes and recommending improvements. Involving staff members gives you greater insight and gives them ownership of new processes.
Now is not the time for fundamental changes (you’ll have to make that a priority after busy season), but you can address simple modifications that allow you to eliminate redundant loops, valueless steps, and the ever-wasteful search for information. Tightening your process so that you save even 10 to 20 minutes per return (a very conservative goal) can have a real impact on your season if you’re preparing hundreds or even thousands of 1040s.
Although preparing for the coming season in January is not ideal, a little preparation and planning can help your season run a lot smoother. These steps can serve as the foundation from which you build for next season. Do a post-season review to see what worked well, what didn’t, and what can be improved so that you can build some of those bigger changes into your strategy.
Reviewing and refining your tax season strategy in May allows you to take lessons from the just finished season while they’re still fresh. Then, you can implement process improvements and new technologies during the more relaxed summer months and use the fall filing deadlines to test them in a live situation that’s not quite as stressful as the real deal.
Mark Albrecht, CPA, MST is founder and CEO of XCM Solutions, LLC, a leading provider of workflow automation solutions to the accounting profession, and a former founding shareholder of KAF Financial Group.