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Simplifying Outsourcing Tax Filing for Accountants & CPAs

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Simplifying Outsourcing Tax Filing for Accountants & CPAs

Tax season is a nightmarish time for every business. It’s no different, even for the professional accounting firms. And somehow, with every passing season, it just keeps getting worse. From last-minute amendments to the tax information from the clients to the untimely tax software updates to the shortage of knowledgeable tax professionals, the hurdles keep piling up one after another. And as a business, you are expected to meet all the deadlines while maintaining higher productivity and low burnouts for the existing staff. If all of it seems highly improbable, it probably is because it is.

Yet somehow, there are Certified Public Accounting (CPA) and Accounting Firms who have shown steady growth along with increased work-life balance. And no, these firms do not have any magic wand to waive off their tax filing issues with a swing.

So, how are they doing it? That’s the question we will be answering here.

In simple words, the answer is – increased tax filing outsourcing and automation.

In every possible way, it’s easier said than done but fret not. Let us simplify outsourcing tax filing for you, whether you are a normal business planning to embark upon your tax filing season or a professional CPA & accounting firm looking to manage high volumes at the peak of the tax season.

Questions to Ask When Planning Outsourcing Tax Return Filing?

The first step towards a fruitful tax preparation outsourcing journey begins with diligent planning and introspection. Depending on the business you own/run/manage, you need to answer the below questions to plan your tax return outsourcing properly.

  • What are the most profitable tax returns for your business?
  • Which tax returns are too complex or require too much of manual intervention, preventing you from focusing on higher-value services?
  • Do you have the necessary automation tools and expertise readily available in-house?
  • Do you have enough resources available in-house to manage the volumes without burning them out?

When you are running the race against time, everything counts. Thus, you must need to identify which services and returns will give you maximum returns when considering outsourcing tax prep work.

What Tax Prep & Financial Tasks Can Be Outsourced?

If you have successfully answered the questions above, you now should be looking at a clear list of tax prep and accounting tasks that you can assuredly outsource. However, if there still is a lingering doubt stopping you, here is a brief list of accounting and tax preparation tasks that a professional corporate finance & accounting service provider can provide you with:

  • Preparation of tax returns
  • Back-office support
  • Payroll processing
  • Bookkeeping and reconciliation
  • Financial planning
  • Customer billing and invoicing
  • Running financial reports

These are just some tax and accounting tasks that you can outsource and can be assured of neat and tidy tax prep services irrespective of your business size.

Keys to Success for Tax Filing Outsourcing

Key #1: Use A Tax Preparation Pilot When Building Your Business Case

Outsourcing, tax preparation or not, can be complicated, especially if you do not have prior experience using an outsourced service. This is why it is highly recommended to use a pilot – a measured maneuver with the service offering of the outsourcing partner. Since the tax season has annual cycles, you will be able to get a good understanding of the service within a single season with the pilot project. Elsewhere, it can take years to get the full adoption from the pilot. It also allows you to get the maximum return on investment as you will be able to push a significant amount of tax returns through your pilot project.

Key #2: Outline the Type of Tax Returns You Will Be Outsourcing

While the straightforward tax returns can always be outsourced, your 1040’s & entity returns need expertise to file and thus they must be taken into consideration. This is why it is always beneficial to outline the types of returns that you will be outsourcing. We understand that depending upon the organization or the nature of the business, the rubric by which a company decided to send its returns for outsourcing may vary, especially where there is no visibility into previous years’ data. But as a rule of thumb, we recommend outsourcing the most considerable tax returns in terms of capacity first.

If you’ve run a pilot with your outsourcing partner, it will make your job easy. If you have not while interviewing the potential outsourcing partners, ask them about the expertise of their staff with the type of tax returns you are planning to outsource. Also, while outlining your tax returns and looking for an outsourcing partner, always go with the one whose staff is skilled enough to compliment your in-house accounting team.

Key #3: Look for Flexible Scalability

For any CPA firm, flexibility and scalability go hand in hand. Thanks to the diverse nature of returns they process in any given tax season. For this simple reason, when looking for an outsourcing partner for your business tax preparation, you must always give preference to the one ready to offer you the flexibility that will help you manage volumes with absolute ease during the peak tax season.

If all you need is seasonal staff or staff with expertise on a particular tax filing software, your outsourcing partner should be able to help you with it. And once the season is over, you can remove them from your plan. This is why having a partner providing flexible scalability is of so much importance.

To Sum It Up –

Whether you are a professional CPA Firm or a business looking to breeze through the peak tax season with the help of an outsourcing partner, you must take care of – Data Security, Tax & Accounting Expertise, Flexible & Scalable Models, advanced IT Infrastructure, and Pricing. The goal is to work with a tax outsourcing partner with a proven history of managing business taxes of diverse nature. These are just some of the things you need to take care of for a successful tax season.

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