Accounting firms often have a love-hate relationship with tax season. As the deadline for filing taxes gets nearer, you’ll have more business — and more revenue — than at any other time of the year.Yet this can also be problematic. If you’re overwhelmed with tax returns, you might end up being unable to provide the quality service you’d prefer, or you might end up stressed to the point of absolute frustration. There are a few strategies that could help you grow your tax business here, but only one that allows you to continue taking on new work without interruption and without making additional hires:
Essentially, the idea is to keep taking on new work, allowing outside tax professionals to handle any excess returns while you can focus on the rest of your workload. So why is this strategy so valuable, and how can you utilize it while maintaining your firm’s reputation? Here’s how you can grow your tax business through domestic outsourcing.
Access to licensed professionals
First, you’ll have access to fully licensed professionals with years of experience. While you might have plenty of education and experience in your career, outsourcing some of your tax preparation to experienced accountants can help you ensure the quality of your work remains stable.
If you’re already overwhelmed, adding more to the pile can leave you exhausted or overly stressed. This way, you won’t have to gamble with a new hire’s experience or spend time training someone new or incur the added cost of a recruiter; and you can trust the quality of the work you’re outsourcing.
Your time is valuable. As much as you love the idea of taking on new clients and doing as many tax returns as possible this season, time is limited. And no matter which way you look at it, having someone else take care of those returns will take less time than placing the burden on you and your staff. In many cases, the accountants to whom you’re outsourcing will have plenty of experience and less overloaded plates, so they may even be able to finish tax returns faster than you and your team can.
Cost savings and profitability
Inevitably, you’ll have to pay money for the privilege of outsourcing your tax preparation. However, depending on how you utilize the service, you could save money and make your operation more profitable. For starters, the cost of a full-time hire is almost always much higher than the cost of outsourcing your tax prep work.
The cost of an independent contractor or part-time worker may also be higher. Assuming you’re delegating the work to someone, outsourcing to another business or professional organization is in your best interest, cost-wise. Also, keep in mind that you’ll be taking on more returns, charging your clients more than you’re paying in preparation costs; in other words, you’ll be making more profits than you would simply be maxing out your workload.
Most tax outsourcing services are known for their flexibility. Depending on your needs, you can use them to handle a handful of tax returns, dozens, hundreds, or even thousands. They can adjust their offerings to suit your specific circumstances, and you may even be able to negotiate different terms of service. For example, you may persuade them to adopt a slightly different workflow for your clients or meet a specific deadline for a high-priority client.
Your clients are eager to know how much money they’re getting back this year, and they want to have faith that their tax return was handled accurately and efficiently. If you weren’t overloaded with work, you might have confidence in your ability to meet these expectations. Outsourcing your work could give you extra time to work on your relationships with your clients. By using domestic outsourcing as an extension of your firm, you and your staff have more opportunities to make meaningful connections with your valued clients.
Tax preparation outsourcing services are scalable. If you’re interested in attracting more clients and growing the reach of your business, there are a few significant hurdles you’ll need to overcome. Most notably, you’ll need to have some kind of assurance that you can keep taking on new clients without exhausting your resources. Domestic outsourcing lends you the power to scale your business and generate more revenue each year. You won’t have to worry about too much work taking up your staff’s time. Domestic outsourcing serves as an outlet to extend your firm’s workflow.
Critical Tips for Tax Preparation Outsourcing Success
There are several tax preparation outsourcing services available to you, but they aren’t all equal. If you want to be successful, you’ll need to consider the following:
If you aren’t careful, tax preparation outsourcing can get expensive. Suppose you want to work with a high-quality, experienced provider. In that case, you’ll need to pay significant fees. You’ll also need to find a provider with rates reasonable enough to fit your existing business. In short, you should be making a small profit or at least breaking even on every tax return you send their way.
No tax preparation service is worth it unless you’re sure there are qualified, experienced professionals on standby to help you. Ask to see what qualifications your tax preparers have, and verify that those are the people who will be working on your returns.
You’ll want to find a tax preparation firm that operates with complete transparency. The more you know about how they work and who they hire, the more confident you can feel in their abilities. If you find a firm that dodges your questions or isn’t 100 percent certain you can trust their people, it’s in your best interest to move on to other opportunities.
Communication is vital for many different reasons. First, you’ll want an easy way to exchange details about upcoming tax returns. The better you communicate, the faster these exchanges will go. Second, this indicates how much the tax preparation outsourcing service cares about their clients; the better and more frequently they communicate, the more likely you’ll be to get quality service from them. Finally, you’ll have an assurance that you can share when it counts—like if you ever have to resolve a dispute with them.
Tax returns contain many personal details, including social security numbers, so you’ll need to be assured that your client’s returns are handled with security and privacy in mind. Evaluate your provider’s commitment to client security before proceeding.
How long has this provider been in business? While new operations can be successful, experience isn’t always a guarantee of success. Knowing that a domestic outsourcing provider vets their accountants’ licenses and experience can give you peace of mind if you’re on the fence about a specific provider.
You might also want to ask about the workflow for accepting new tax returns or how to handle particular circumstances. For example, how will they take a situation where a client has missed the tax deadline? There aren’t necessarily “right” or “wrong” ways to handle this, but the more you understand the process, the better you’ll be able to adapt to it.
Outsourcing Diminishes Risk and Increases Stability
When your organization chooses to outsource, it is hiring a company instead of an individual. This limits a variety of risks and creates a more stable environment. Some of the risks you can avoid through outsourcing include:
The most powerful outsourcing models nowadays are the fixed, pay-by-deliverable/outcome approaches. This helps reduce the “slack” or non-revenue generating time spent by salaried or hourly employees.
When trying to manage all of your operations in-house, you are responsible for providing all necessary staff. Employee departures are expensive and finding replacements takes away valuable time you could be spending with your clients. Likewise, when employees cannot come to work, you must find ways to make up for their absence. Outsourcing eliminates both of these issues, ensuring that trained professionals are always available to complete the tasks.
Lack of Knowledge
Regulations and best practices change over time, and keeping in-house employees up-to-date can be taxing. Outsourcing various functions to a qualified partner gives you continuous access to experienced professionals who understand the best practices and utilize the best available tools.
Outsourcing Provides a Competitive Advantage
Outsourcing gives your company access to a highly skilled team of professionals who can improve your company’s competitive advantage. These individuals have knowledge and experience that can expand your company’s workflow. These individuals will understand your company’s goals and projects, and they will be able to continue meeting your needs as they evolve. In addition to their knowledge and experience, experts give your company access to the latest technology and systems. All of your data will be managed on off-site servers and kept secure at all times. The provider will be responsible for data back-ups, disaster recovery plans, and providing IT support.
Outsourcing Improves Efficiency
Perhaps one of the most notable benefits of outsourcing is the improvements made to your company’s efficiency. When you no longer need to worry about outsourced tasks, you will spend less time managing staff and performing compliance work, which allows you to shift your focus to more critical business functions. In addition, outsourcing will reduce the cost of your company’s operations.
Part-time tasks will no longer require full-time employees. You won’t need to worry about providing employee benefits, writing and revising staff manuals, investing in training sessions, or taking on any other costs related to employee management. As your needs change over time, the provider can scale its services to maintain operational efficiency.
Many firm leaders have already used outsourcing to eliminate, consolidate, and standardize many processes and operations. Is it time for your organization to make the same choice?
Ask to see if there are other perks available by working with this specific service. Is there a digital platform that makes things easier? Is there a discount if you’re a reliable repeat customer? Tax preparation outsourcing can help you complete more tax returns during the busy season without spending more or adding more stress to your life.
If you’re interested in partnering with Taxfyle, schedule a free demo. We pride ourselves on being the internet’s largest, most powerful accounting workforce. With more than 4,000 freelance accountants scattered across the country on our team, we’re confident you will find the right Tax Professionals to meet your firm’s needs. We are SOC 2 compliant and verify each of our Tax Professionals’ licenses.