by L. Gary Boomer

Leading firms continue to improve processes and procedures in order to increase profitability. In my consulting work with firms, I have found that everyone realizes that there are many ways to do business and manage tax practices, but leadership and relationships stand out when it comes to improvement and profitability.

Leading firms cite the following ways in which they avoid the commoditization of their services and improve their clients’ experience with tax compliance:

  • Create a positive experience;
  • Electronic tax organizers;
  • On-screen review;
  • Digital printing;
  • Process improvement;
  • Remote access;
  • Document retention policy;
  • Electronic filing;
  • Outsourcing;
  • E-mail;
  • Private client sites; and,
  • Bill and collect at delivery.

Create a positive experienceA positive experience is the difference between a commodity and a valued personal service. Coffee is a commodity, yet Starbucks gets over $4 per cup.

What is the difference? It is the experience of going to a friendly comfortable environment to enjoy your favorite cup of coffee, even though you can brew a cup at home for less than 25 cents.

Firms that create a positive personal experience when it comes to tax compliance do not feel the pressure on pricing that others do. The positive experience starts with the gathering of information and goes through the delivery process.

Think creatively about how you can improve the experience for your clients.

Electronic tax organizers

Remember when the first paper organizers were introduced? Many accountants said that their clients would never use them, while other accountants decide to try them and found that a significant number of their clients not only used them, but valued the structured format.

Not all clients will use electronic organizers, but those that do will reduce data input and improve workflow.

Many firms now offer electronic organizers on their Web sites, and that use is increasing. Success depends on how they are presented to clients. They must be easily accessible and contain prior year’s information.

On-screen review

Old habits are difficult to break and many accountants resist change. But many firms are moving toward on-screen review and reducing printing and paper costs, in what seems to be an evolutionary process.

The steps in the evolution appear to be:

  • Use screen and a paper copy;
  • Use two monitors;
  • Use flat-panel monitors in order to regain desk space; and,
  • Use the "alt tab" keys to rotate between applications and documents while retaining desk space.

While two monitors may seem like a logical approach, those with more experience tend to gravitate back to one monitor and use the keyboard (alt tab) for multiple views.Digital printing

Portable document format, or PDF, is rapidly becoming the standard for storing tax returns. The reader is free from Adobe and the writer software is inexpensive.

Files can be locked and are transportable. K-1s can be printed to a PDF file and then e-mailed to shareholders or partners, which saves time and postage. Copies of tax returns can also be published to a private client site.

Process improvement

Have you reviewed the steps in your tax return preparation lately? Reducing the number of steps will increase profitability, while increasing the number of steps does not ensure quality.

Unfortunately, too many firms use the computer as though it were a glorified typewriter. Document your processes, set standards and comply with the standards. You must take a firm approach in order to maximize profits.

Remote access

Tax return preparers want to be able to work from home and client offices. The majority of firms are using Citrix as a solution due to its capability to operate under limited bandwidth.

Furthermore, firms are using the Internet for access rather than dial-up lines. This reduces costs and simplifies the steps in the connection process for the end user. The Citrix solution also reduces the time spent in installing software updates.

Document retention policy

It was difficult for most firms to agree on a document retention policy last year. And, today, it’s even more complicated thanks to Andersen and Enron.

Lawyers’ advice goes across the spectrum to the point that many are advising firms not to have retention policies. Yet, as the number of documents grows, the cost to file, store and retrieve these documents also increases.

We see the cost ranging from $75 to $150 per client per year. Firms are installing systems to manage these documents. Hardware and software are the easy part and quickly pay for themselves. The discipline and change management aspects are the greatest challenges for the majority of firms.

Electronic filing

Electronic filing is no longer for just the returns on which there is a refund. Many firms are filing a majority of their returns electronically and reporting a reduction in time and improved efficiency. The firms that don’t file electronically cite reasons that are no longer valid in most cases.

Once you get the processes down, there is no going back to the old paper method. In fact, some firms are now charging a premium for returns filed on paper.

You might as well get this figured out in your firm as you will be forced into electronic filing in the near future by the Internal Revenue Service and state governments. Don’t resist, it is to your advantage.


With a shortage of labor in the accounting profession, firms are looking for alternatives during the busy season. This past tax season, several pioneers followed the trend toward outsourcing their tax preparation work.

The results were positive and the logistical resources are now in place to increase the volume. The economics and technology are in place for success this coming tax season.


E-mail is a curse and a blessing. The difference is determined by how you manage it.

Clients are utilizing e-mail for delivery of critical information. Retention, filing and retrieving of e-mail is becoming a serious issue, and the use of instant messaging is on the rise.

Yet, some firms fight instant messaging while others encourage it. The camps are divided between those who believe that quick answers to questions reduce process time and those who don’t like to be interrupted. Plante Moran is one of the leading firms that encourages the use of IM and believes that it saves time.

One advantage -depending on your perspective - is that IM does not leave the trail that e-mail does.

Private client sites

The newest twist on client services is the private client site. This is a secure site generally hosted by a third party such as AT&T, IBM or Sprint. The firm publishes copies of important documents (tax returns, financial statements, wills, leases, etc.) for access by the client with a private site. Think of it as an electronic safe deposit box.

It’s also a source of new revenue. Pioneer firms are reporting that the greatest interest is coming from clients who have multiple locations. Several software vendors have, or will be, implementing this feature into their offerings.

Firms with large partnerships or corporations where K-1s are issued have also distributed K-1 information through such a site rather than using regular mail or e-mail.

Bill and collect at delivery

This is part of the positive client experience. You are responsible for setting the rules. The majority of clients want to know how much services cost and what they should expect to pay.

Accumulating time and sending a billing weeks after tax season is bad business. The value of the service only diminishes after the delivery of the service. It is surprising how many firms still don’t bill and expect to collect with delivery. Even more interesting are the reasons for justifying their bad habits.

Review and choose which of the above tips might work for your firm. As with most services, there is no one revolutionary "silver bullet." Improved profits require a combination of strategies and a competent team, as well as an open mind and the willingness to change.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access