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The 4 Most Important Workflows to Audit Before Tax Season

Tim Sines
Posted by Tim Sines on Mar 26, 2024 8:07:59 AM

No matter what kind of accounting or bookkeeping your firm handles, one thing holds true in almost every field: tax season is busy. We’ve talked to some firms who barely have time to eat lunch during this time of year – let alone spend time tweaking the processes they use to handle normal business tasks.

But if you never devote any time to updating your workflows—whether during tax season or not—you run the risk of using outdated processes that waste time and resources. While these situations may not seem like a huge deal, over time, they could restrict your business revenues and negatively reflect on clients’ opinions of you.

Whether you decide to conduct workflow audits before or after tax season, these are the top processes to evaluate if you want to make your firm run more smoothly:

Monthly bookkeeping

These are the repetitive, standard monthly processes that your firm needs to get done so that you can handle your main business. Monthly bookkeeping processes include things like reconciling accounts, generating profit statements, and other operational tasks. These processes aren’t glamorous or exciting, but they still need to get done regularly so your firm can run smoothly.

As you audit these workflows, consider what steps you might be able to automate. This is an important consideration for all workflows but is especially applicable to recurring monthly tasks that don’t get much attention from your firm—particularly during the hectic tax season.

Payroll processing

Your payroll processes might be considered part of the monthly bookkeeping processes mentioned above, but in many firms, they stand apart from others because they require input from staff. At many organizations, payroll processes change during tax season because the work becomes more intense or changes format. For example, some bookkeeping firms send an employee to work on-site for part of the season, which adds to the complexity of managing compensation.

Payroll is another area where you can rely on modern software to help make things less stressful when things are especially busy with client work. The key is to find a payroll tool that’s not only easy for your firm, but simple for your staff to fill out on-the-go. Even if you think a specific platform might work well, problems will arise if the rest of your team isn’t comfortable using it.

File and document sharing

When your firm has a larger number of projects happening at once and they all have specific deadlines, getting documents shared between your internal team and firm clients in a prompt, secure manner is critical. Tax season is the worst time to have to help your clients walk through the logistics of document sharing, but you also can’t afford to have a security breach due to an issue with the way you send digital records and contracts. This balance is why it’s so critical to have your process for sharing files with clients nailed down before things get hectic.

Work tracking and metrics

Every firm needs a way to understand and analyze the work they’ve done in the past, whether it happened last week or last year. Taking a look back at what happened in the past is the only way to see if your firm is growing sustainably or stagnating, and where you might be falling short. Evaluating previous projects can also help you identify your firm’s areas of strength, which may indicate processes working well.

Many firms mainly use sales data to track their business. While these metrics are a good place to start, you should also look to track deeper numbers that can tell you how many new leads you’re engaging each month and where they come from. Outside of sales and marketing, tracking client retention rates and satisfaction levels can also help you better understand how your firm performs once you’ve signed a client and where you might be able to get better at keeping clients onboard for the long haul.

Don’t wait for the busy times to correct inefficiency

For most bookkeeping and accounting firms, tax season means an increase in client correspondence and project requirements that need to get handled in a compressed window of time. This can make it hard to evaluate day-to-day procedures, since team members and other stakeholders in the evaluation may be caught up with handling client tasks.

On the other hand, if you don’t spend enough time evaluating your processes, they will slow you down at the worst possible times, such as during tax season when you aren’t able to stop what you’re doing to dive in and fix these operational issues. The key to managing this balance is finding a practice management software suite that can help you keep your processes running tightly year-round. The right software platform will give you a strong base from which you can tweak processes like employee time tracking, project milestones, client communication and secure document sharing, to help ensure your organization runs smoothly even when it’s under a lot of pressure during the busiest parts of the year.

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Topics: Practice Management


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