Tax season burnout is not a time problem. It’s a capacity problem. It’s this perspective that helps you see the opportunities to make the next tax season easier and more relaxing for your team.
That is partly why accounting and CPA firms, like Collins and Ganley P.C., have zeroed in on tax preparation outsourcing.
Tax preparation outsourcing provides accounting and CPA firms with a bench of expert accountants that multiplies their team’s capacity during tax season, enabling them to handle increased client demands without sacrificing accuracy, deadlines, and personal well-being.
In this article, you’ll understand how CPA Tax Outsourcing empowers accounting and CPA firms to enjoy the services of a CPA-level accounting workforce whose hiring, training, and payroll they’re not financially responsible for.
Why Traditional Tax Season Workloads Don’t Work Anymore
The traditional factors affecting tax season workloads have evolved over the years. It only makes sense that the approach to tax season workload follows suit.
For one, the tax season used to be more predictable. Client needs mostly revolved around compliance, regulatory frameworks were more static, and local accounting talents were sufficient to help accounting firms handle tax season workloads.
But the reality has changed. Clients now expect year-round support in addition to tax compliance; regulatory requirements are changing more frequently (putting pressure on accounting firms to research and stay up to date), and the accounting talent pool in the U.S. and other Western markets is declining by the day, so firms can no longer rely on local seasonal hires.
Meanwhile, technology has enabled accounting firms to leverage accounting talents in other countries to meet increased client demands.
They can now delegate routine tasks to their offshore teams to free up in-house capacity, enabling their teams to meet client deadlines and strike the right work-life balance during the tax season.
The Hidden Costs of Burnout on Firms and Clients
It’s easy to identify the fatigue and inefficiencies that result from burnout, but the hidden costs of burnout are just as damaging, if not more so.
They include:
- The cost of replacing lost clients
The inability to meet deadlines, deliver quality client work, and respond to clients on time damages your clients’ confidence in your firm.
If they don’t leave immediately, they will leave sooner rather than later, and when you lose a client, it costs five times more to get a new one, and getting another one that fits your ideal client profile is a whole different conversation.
- The cost of hiring new team members:
The accounting talent shortage has made it more difficult to find the right talent at the right price.
“I received notice from two of our part-time staff, and I needed to replace them with full-time positions. I could not find accounting talents with the right skills that were not priced outside our budget.”
Rebecca Santiago, Owner, Advance Professional Accounting Service
It has also made it easier for accounting professionals to quit jobs that affect their work-life balance, knowing that they can easily get another job or change careers altogether.
The cost of getting a new full-time staff member includes sending out job ads (which will likely get fewer responses), interviewing candidates (who will take a longer time to make up their mind about your firm), and negotiating salaries (which will likely be more than you previously paid.
- Missed growth opportunities
An increase in client demands presents an opportunity to grow your team, client base, or service offerings.
But when your team is struggling to meet client deliverables (due to a lack of productivity and operational efficiency), you will be more worried about retaining old businesses than getting new ones.
“Overcapacity can become a huge problem because you will run out of time and space, and the ability to grow to take on more clients. I did not want to be in a position where I was turning clients down.”
Adrienne Dove, Founder of Corban Accounting Solutions
How Tax Preparation Outsourcing Solves the Problem
Tax preparation outsourcing solves tax season burnout because it provides:
- Access to Skilled Tax Professionals
No firm is ever truly prepared for the workload demands of the tax season, except if they hire a lot of full-time employees in anticipation of tax season client demands, which may be more or less than expected (but that’s not the main problem).
Overhiring against the expected workload will result in redundant team members when the busy season ends and there’s no longer sufficient work to go around. At this point, the firm maintains payroll and benefits for employees that they don’t need.
That is why Outsourced Tax Preparation Services remains the greatest source of confidence accounting firms need going into any busy season.
Tax preparation outsourcing allows you to partner with offshoring companies that have a large pool of accountants with strong academic training, with many having Master’s degrees in accounting.
These companies not only offer these talents at a fraction of the cost of full-time staff, but they also provide quick onboarding, allowing your outsourced team to hit the ground running within two weeks.
With Finsmart Accounting, this onboarding takes only seven (7) days. This enables you to adjust your team’s capacity quickly enough to handle surges in client demands during tax season.
- Accuracy and Compliance at Scale
Your in-house team needs more time to study, understand, and apply complex tax codes and evolving financial requirements to your clients’ financial situations..
Tax preparation outsourcing allows you to delegate the routine compliance tasks to your outsourced team, while your internal team focuses on higher-level tasks like review.
If you’re working with firms in India, like Finsmart Accounting, you can also delegate high-level tax work to CPA-level accounting experts who specialize in U.S. taxes.
Outsourced tax service providers’ emphasis on accounting technology empowers them to automate tasks to detect errors and ensure projects are delivered accurately.
Providers like Finsmart Accounting also use multi-review processes, where a more senior accountant (with a master’s degree) double-checks projects before they’re delivered to your team for review.
“The Sales Tax report is done quarterly, requiring a complex pivot table and great attention to detail. The Finsmat Accounting team executed this with excellence, saving me significant time. I was very impressed with the work and the overall results.”
Nikki, with Thrive Business Services
- Deadline Management and Reduced Stress
While a burnt-out staff will struggle to keep up with the tax deadlines, tax preparation outsourcing will relieve them of pressure, making it easier to manage pressing client demands more calmly and reduce stress levels for the internal team.
When stress levels are high, it is much easier to skip a step, overlook a piece of financial information, and add or omit a figure, leading to errors that require rounds of rework and corrections at the risk of missing deadlines.
Tax preparation outsourcing allows your in-house team to take on the work they can comfortably handle. Firm owners like Juliebeth prefer to delegate the time-consuming work (data entry and form preparation) while your CPAs and in-house team focus on client advisory.
The time zone advantage in offshore locations enables outsourced teams to work while your U.S. team is sleeping, ensuring that the tasks you assigned today are ready for review by morning, rather than the next business day.
So, beyond getting more accountants to get work done, your team also gets the advantage of a 24-hour operation during tax season, which makes a world of difference.
Key Benefits for CPA & Accounting Firms
Embracing tax preparation outsourcing enables you to enjoy:
- More Focus on High-Value Advisory Work
As client expectations shift beyond basic tax preparation to personalized strategic guidance and proactive tax planning, many accounting firms fail to capitalize on it because their CPAs are overwhelmed with routine compliance tasks.
By offloading these routine compliance tasks to their outsourced team, senior team members regain focus on tasks like tax strategy, client education, and relationship building.
“We have really found some great success using Finsmart accounting to help us automate and do some recurring activities for clients. They’ve also handled some special projects that are going to take a lot of our time, so our U.S.-based people can be doing the high-level projects.”
Juliebeth Melone, Founder & CEO of J B Advisory Group LLC
- Improved Work-Life Balance for Teams
When your outsourcing partner takes on some of your tax season tasks, your internal team wouldn’t need to work overtime, as there will be more time for everyone to complete their deliverables.
This enables your team members to rest between work and attend to other endeavors outside of work, creating a better work-life balance that means everything to the current generation of accounting professionals.
- Scalability During Peak Season
Full-time hiring is more expensive and time-consuming now that local accounting talent is in short supply.
Firms need months to hire and onboard new team members. That’s a significant portion of the tax season. So, hiring full-time employees to scale up operations during the busy season won’t work.
With outsourcing, you can get dedicated accountants (at any skill level) in a week or two. At Finsmart Accounting, it takes seven (7) days to hire and onboard your dedicated resources.
That’s not all. You can end the engagement as soon as your capacity needs end. You’re not required to sign a long-term contract, and you can hire as many accountants as you need.
This flexibility enables you to rise to the occasion of increased client demands in the middle of tax season, allowing you to take on more clients confidently.
Choosing the Right Outsourcing Partner
It goes without saying that accessing the benefits of tax preparation outsourcing is only possible when you choose the right outsourcing partner.
Here are the criteria to judge an outsourcing provider you’ll be glad to partner with in the long term:
- Proven Expertise in the U.S. Tax Preparation
Most offshoring firms have deep knowledge of accounting standards (GAAP, for U.S. businesses), IRS guidelines, and SALT (state and local tax).
With rigorous training and years of experience doing taxes for U.S. businesses, they also understand the various software solutions necessary for successful tax projects.
If your outsourcing partner hasn’t worked with U.S businesses before, you might have to be training them in the middle of tax season, and that can overshadow the benefits of bringing them on board in the first place.
- Data Security and Compliance Standards
The sensitivity of your clients’ financial data requires airtight security measures, and the top outsourcing service providers are conscious of this.
That is why security protocols, like data encryption, multi-factor authentication, and role-based access control, are popular in the outsourcing community.
If your potential partner doesn’t have clear data security protocols (including compliance with security and privacy standards like ISO 27001, SOC 2 type II, and SOX), you should look for another firm.
- Talent Pool and Scalability
You need providers who can scale their resources up or down as your workload fluctuates in the busy season. If your partner does not have sufficient resources for you when needed, you will be left finding another provider in the middle of tax season, which will waste your time and drain your energy.
Ask about their staff strength before you partner with a tax preparation outsourcing provider to be sure they can deploy more resources quickly enough to meet your urgent demands without sacrificing work quality.
- Technology Integration
The best providers don’t require you to change your tools and systems. They provide dedicated staff who integrate into the tools and processes you already use.
This enables you to maintain control over your work by assigning tasks and tracking their performance in your project management systems.
- Transparent Communication
Obviously, your partner has to understand the English language for clear communication.
But beyond that, effective communication systems define how and when you meet with your outsourced teams to maintain clarity and alignment.
This includes communication channels, reporting frequency, and average response times.
Final Thoughts: Thriving, Not Just Surviving, the Tax Season
Accounting Outsourcing for Tax Season is not just about surviving the tax season; it’s about strengthening your firm’s capacity for maximum productivity and efficiency even after tax season.
By creating a trusted and dedicated offshore accounting partnership to whom you can shift your tax season workload, you protect your internal team from the pressure of the tax season.
These offshore accounting teams have the expertise, talent pool, and flexible engagement models that allow you to onboard their accounting professionals quickly enough to manage seasonal changes in workloads and client demands.
With Finsmart’s Accounting Seat model, you’ll get dedicated accountants who will work exclusively for your firm for as long as you need their services, empowering your firm to maximize growth opportunities during the busy season.
If you want to understand how outsourced tax preparation services will benefit your firm, let’s connect to plan your requirements for this tax season. Click here to book a free consultation session.
In this Article
editor
Maanoj is Co-founder & Director of Growth Strategy & Alliance at Finsmart Accounting. He is an Outsourcing Expert, a People Champion, and a Dynamic Leader with strong Business Strategy and Scaling-up experience. He has incubated businesses, sold & exited ventures; helped build strong enterprises in very diversified verticals like Fintech, HR & Consulting spaces in various CXO capacities over the last 20 years.
CONTENT DISCLAIMER
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Finsmart Accounting does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.
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