Outsource – CPAs’ big decision for tax season
Outsourcing has been maligned for political reasons. The tremendous benefits of outsourcing to all, have been lost among the debates related to its so-called damage to the nation’s economy. Outsourcing has suffered because of its close association, in today’s world of internet, to offshoring. However, outsourcing has been a normal business practice for a long-time in the U.S. and has been the major contributor to the growth of many business organizations.
Outsourcing has been used very frequently in the manufacturing industry for a long time very successfully. Manufacturers have been able to reduce their overall costs, improve manufacturing processes, improve product quality and grow their business with the help of outsourcing. Even in the service sector, outsourcing has been used quite well for many years. Even in the 1980s CPA firms would hire tax filing firms to enter data into tax software and provide tax return printouts to reduce the load on the firm staff. With the arrival of tax software that could be used by accountants in their own offices to prepare tax returns, somehow a trend of bringing back all work in house took hold. For the last few years, small and medium-sized CPA firms have developed a habit of handling all the work in-house and taking pride in it. This trend, that took hold in the last few years, and the negative publicity associated with outsourcing is to the disadvantage of the accounting industry.
Outsourcing is a fact of life in the 21st century. From our domestic lives to every aspects of our professional lives, we outsource. In this age of specialization, it is extremely crucial for the accounting industry to pay attention to the benefits of outsourcing and catch up with it as soon as possible. There are some very definite benefits in outsourcing, for CPAs.
CPAs who own and manage small or medium-sized practices spend a tremendous amount of time manage their practices, including staff management, work flow management, and handling usual problems associated with managing a small business. However, the actual strength of CPAs is in their ability to decipher tax laws and advice and help their clients optimize their tax situations. They also have a strong understanding of the issues related to efficient financial management of businesses and personal financial management. They can help with business valuation and help clients develop systems and procedures for effective management of their businesses. All of these services require CPAs to have the time to continuously develop professionally to stay current with the new developments in each of those fields. They also need to have the time to dedicate to their clients in these areas. If they are too busy managing their practices, supervising their staff’s work, entering data into tax software and compiling tax returns, then they are too busy doing the work that could be easily done by someone else, under their supervision. They get themselves too busy competing with the “other” tax preparation services, franchised or independently owned, and do not get the time to provide the much-needed high-value services to their clients.
Outsourcing their tax and regular accounting work provides a great opportunity to CPAs to release themselves to provide high-value services to their clients. Many clients get an opportunity only once in a year to interact in detail with their CPA at tax time. Many CPAs lose this opportunity as they are too busy with the “tax season” and don’t have the time to look at anything else. That is surely a lost opportunity, year after year. If CPAs organize their time, during tax season, in such a way that they get to interact with their clients and look at their matters in detail, they could grow their business significantly. Clients like CPAs who take interest in their matters and provide personal attention to them. Most clients, that are of value to your practice, do not mind paying for such premium services.
Tax season this year offers an opportunity, once again, to CPAs to consider outsourcing some of their tax return work. By doing so they could have some extra time to provide higher-value services to their clients and differentiate their practice from the other tax preparation services. It is now time for CPAs to differentiate themselves from the regular bookkeeping and tax preparation services and outsourcing provides a great opportunity for them to do so this tax season.