It’s that time of the year again! It is tax season in Canada. Whether you have decided to sail solo or you are a professional Canadian CPA firm looking for an accounting and bookkeeping firm to share the workload, the 2020 Canadian tax filing season is the most unusual and complicated one in recent history. Thanks to the ongoing COVID-19 pandemic, with well over 30 million personal tax return to be filed across the country, the CPA and bookkeeping firms must brace themselves for when the rush hits as we approach the April 30, 2021, tax filing deadline.
Since the Canadian Revenue Agency started accepting electronically submitted income tax return as of February 22, 2021, this year’s tax season is officially open. If the accountants and CPAs don’t get the right help now, they could face a nightmarish situation with a tower of tax filing requests piling up on their desks with every passing day.
While that sounds overwhelming right from the onset, a right partner can manage it proficiently. But with a barrage of ads popping up online and numerous others arriving via email, it can be confusing to identify the right partner to sail through the squally tax season we all face. So, we thought we would draw a pathway of sorts to help the Canadian accountants and CPA firms not only to find the right partner, but also to help them get started with corporation and business tax preparation straightaway.
Pin your accounting & bookkeeping objectives –
Delegating your accounting services to a global partner sounds lucrative. But as with every international process, accounting outsourcing has its own sticking points, which must get the due diligence they deserve. Identifying the accounting objective is the very first one. Different accounting firms have different needs, from technical expertise in Individual Tax Return (T1), Corporate Tax Return (T2), and Trust Tax Return (T3), to operational needs like business expansion and finding qualified staff. There also is the aspect of cost saving. No matter what your need is, you must identify all the facets to the very last pain point. It’s only then you will find the outsourcing partner with the solutions to address your requirements.
While Canadians received a tax-filing extension to June 1, 2020, for the 2019 tax year, the deadline to file income tax return for this year remains on April 30, 2021. Only taxpayers who are self-employed, along with their spouses or partners, though, can file by June 15, 2021. Given the complexity 2020 has created, we may see the need for an extension, but we have no control over the deadline. We can, however, help the Canadian accounting and bookkeeping firms identify not only their specific needs/goals for the tax season, but also provide comprehensive solutions to achieve them.
Defining the workflow is the pathway to better tax filing management –
The last thing you need this tax season is to be chaotic. With millions of Canadians receiving COVID-related government benefits, including the likes of the Canada Emergency Student Benefit (CESB), Canada Emergency Response Benefit (CERB), Canada Recovery Sickness Benefit (CRSB), Canada Recovery Benefit (CRB), and the Canada Recovery Caregiving Benefit (CRCB), the tax filing this year requires increased vigilance. With all the benefits considered taxable income, you need to have clear communication with your clients and your partners to consider them.
You need to carefully monitor and analyze the assigning of accounting and bookkeeping work to accounting and tax professionals from another country. With work-from-home becoming the “new normal”, the compliance aspect of outsourcing has taken precedence. This is why it is essential to create a clear workflow for your requirements, establish proper communication channels, and adhere to a schedule as much as possible. This will help you do the capacity, scalability, and profitability planning while ensuring that your clients’ information is handled with the utmost care. This will also help you partner with qualified accounting firms managing a higher volume of work with greater ease.
Technology adoption is the key to success for accounting firms –
The accounting software market will grow at a CAGR of 6% during the forecast period of 2020 to 2024, predicts Businesswire, 2020. Adopting advanced technologies like Cloud, Data Analytics, Machine Learning, and Artificial Intelligence will make the tax filing increasingly expeditious and error free. While North America seemingly will be at the forefront of technological advancement in small to medium-sized accounting firms, Asia Pacific too is seen as a strong driver of this growth.
While it will boost the number of accounting outsourcing service providers, the existing service providers too will be able to strengthen their technological prowess to attract new clients from the accounting industry. There is no denying that outsourcing indeed is one of the most potent ways for CPA firms to provide proficient accounting services to their clients. With the adoption of new technologies, these outsourcing providers become a natural partner for any CPA firm.
Beat the rush of the tax filing season now
We have just under a couple of months before the Canadian tax season closes (unless extended), but the industry accounting trends are already hinting towards a muddled conclusion. While the role of technology remains ubiquitous in making the process seamless and efficient, it will be the humans who will have a pivotal role in making sure that their accounting practice walks hand-in-hand with the technological developments.
There are benefits to reap for both the CPAs and their accounting partners, given that they navigate this economic havoc-laden accounting season with the right outsourcing partner. Our rich experience of working with 100+ CPA firms across the globe allows us to understand the ins and outs of the accounting requirements before tailoring a solution for clients. And we would be happy to tailor one for you!