Bookkeeping Firm Compliance Tips for Tax Time

The risk of a compliance failure usually increases during the busy tax season, when firms are stretched thinner than usual. It’s human nature: when people are busy or under extra pressure to get things done in a shorter window, they sometimes go outside the normal operating procedures, placing compliance at risk.

Ideally, you should carve out time to review compliance procedures before you get bogged down by the busy tax season. Some firms schedule compliance check-ins on an annual or even quarterly basis. Whenever you decide to address compliance in your firm, here are a few of the top areas to go over so that you don’t waste any resources abiding by all the relevant guidelines when work picks up.

Review your invoicing practices

Many bookkeeping firms have to create, distribute, and follow up on more invoices during tax season. This can be intimidating, especially for new team members who haven’t experienced the seasonal rush. That’s why it’s worth reviewing your invoicing methods to find areas for improvement ahead of time.

While you should check your invoicing process for accuracy and formatting, it’s also helpful to consider the process from an efficiency standpoint. How much time and manual effort does it take to generate each invoice? Anything you can do to lower that requirement will help your firm all year and pay extra dividends when your workload increases.

Don’t forget about the processes that happen after your invoices are created and sent. Ideally, these should take place with as little human energy as possible. There are tons of accounting automation tools that can generate an invoice based on a pre-existing template and then send it to a specified email address. Paired with the right automation system, you can even create an automated follow-up sequence that sends reminders to clients if the invoice doesn’t get paid after a set amount of time. As long as you remain compliant, take every step possible to make invoicing more streamlined for your firm.

Consider payment processing

You probably don’t spend much time thinking about how you handle payments from clients, especially during tax season. While accepting payments might be an afterthought most of the time, if you run into any issues collecting a balance you’re owed, that problem will quickly move to the top of your priority list.

We don’t suggest you carve out a ton of time to manage payment processing when you’re busy, but it does make sense to schedule a check-in every once in a while to ensure no new compliance issues have come up with your payment processor or the tools they use to collect payments.

Keep software updated

It sounds easy and simple, but we bet you’d be surprised at how many firms don’t take this step consistently─and how many compliance issues and security breaches can result. According to research, companies running outdated software are more than twice as likely to suffer a data breach and lose 47% more money when data breaches do occur.

Don’t let something as simple as updating your software create a costly problem that slows your firm's operations down during tax season.

Seek outside certification of compliance

Anyone can claim that their organization takes compliance and security seriously. As accounting and bookkeeping firms, we’re required by law to comply with certain rules. But if you want to take things up a notch and stand out from competitors, consider investing in a certificate or audit to prove your firm goes above and beyond what’s required to provide an extra level of security to clients.

For example, you might pursue ISO/IEC 27001 certification, which is a global standard for information security management systems (ISMS) that provides guidance on how to establish, maintain, and improve your information security practices. Spend some time researching the specific kinds of audits available in your firm’s areas of expertise so you can choose the right one, and don’t forget to consider the kind of certifications your clients may have as well.

Don’t wait until tax time to address compliance

You may have noticed a theme throughout this article: for best results, address compliance concerns before entering the busy season. Dealing with technical or workflow issues when you’re already facing an elevated workload will only compound the stress and difficulty.

Another idea we stress to clients and prospects is to take advantage of the latest and greatest technology to ensure compliance doesn’t become an unwieldy task that cuts into the focus you devote to project work.

With the right accounting practice management software, you can manage invoices, file sharing, and other key compliance-related tasks much more efficiently. These tools will allow you to meet and exceed compliance goals without taking away from the main purpose of your organization: providing quality services to the clients who rely on you.

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