Boomer’s Blueprint

10 ways to optimize your 1040 practice

Value increases with a digital business strategy, but becoming clear on your objectives can immediately improve productivity, the client experience, and existing revenues. This is optimization, while transformation is associated with new revenue, new services and new business models.

Optimization and transformation are both important, but the focus of this article is on 10 ways firms can immediately improve their 1040 practice.

Process is essential, and often firms focus only on the technical aspects to ensure quality, rather than the entire process that includes aggregation of client data, preparation, review, filing, and billing/collecting. While these are high-level steps, mindsets, skill sets and toolsets can impact the outcome significantly.

You may already be doing some of these, but take the time to step back and evaluate the entire process, including the client experience and the existing business model.

1. 10x thinking. Mindset is critical and thinking about how you might increase services to a client 10x will start the process of how you might add more value and improve the client experience. It won’t take long to determine if this client should be filtered or nurtured. Most firms have too many low-end returns that need to be filtered so they can focus their time on providing advisory and consulting services to their best clients. Fees are not the only criteria for filtering, but are an important indicator. Other measures might be: Is the client coachable and appreciative? Do they refer other target clients and increase firm capabilities?

2. Digitization. The debate of when to scan documents continues in many firms. The advantages of digitization early in the process primarily stem from the fact that many documents are already digitized and there is no reason to print and scan. Even more important is the fact it is impossible or at least difficult to utilize staff working from multiple locations with paper files. Digitization reduces the time spent on the aggregation of data and can also lead to improved workflow. Spend more time thinking about how to add value or enhance the client experience.

3. Scheduling. We all procrastinate, even our best clients. Therefore, setting dates and appointments upfront will improve workflow and reduce work compression. Scheduling benefits the client and the firm. This requires planning and process management. Automation of this process may improve results. Go beyond a spreadsheet. Caution: Don’t try to over-schedule smaller jobs or easier returns. We suggest a “pooling system” where preparers draw from a pool of returns. This simplifies and streamlines the process.

4. Disclosure of expectations. You set the rules regarding when the client information must be received and when you will prepare via an extension. These guidelines can be dictated by the service level chosen by the client (e.g., bronze, silver or gold). Black is for a very small percentage of your clients and commands premium pricing. This is much like the American Express card model. Clients like service options.

5. Utilize mobile apps. Apps like TaxCaddy from SurePrep enhance the client experience by making the aggregation of data much easier to accumulate and submit than through a client portal. It also enhances the utilization of tax organizers designed specifically for the client. The world is mobile and app-driven (on smartphones and iPads). This is a way to quickly utilize dynamic knowledge-based authentication signatures and deliver returns. This also helps the client with workflow and knowing the status of client information. It will save time and cut steps out of your processes if utilized properly. SafeSend from cPaperless is a secure method of delivering returns and other documents. It also integrates with TaxCaddy and can eliminate the use of email.

6. One-way workflow. I first witnessed the strategy of one-way workflow over 12 years ago in India where outsourcers were utilizing training and the grading of returns to reduce cycle time and loops in the process. A poor grade on multiple returns put preparers back in training or on notice that their work must improve. Many firms still review and loop back to the preparer, stating that this is how people learn.

One-way workflow is more efficient and reduces cycle time. Some firms are incorporating collaborative reviews to expedite the process, as the review is often where bottlenecks occur. A lean tax project can eliminate or reduce the steps that add little or no value and increase cycle time.

7. Questions. Accountants love checklists, but a few questions in the areas of leadership and management, governance, financial reporting, talent development, technology and process improvement, customer development, and brand and market share, along with personal well-being, can produce advisory and consulting services that result in projects many times greater than the preparation of the tax returns. Value is added through leadership, relationships and creativity. Technical skills are essential but don’t necessarily relate to additional services and increased fees.

8. Filing and delivery. Automate and standardize processes that utilize digital signatures and copies of the returns. Personal preferences of paper copies create bottlenecks and wasted time during the busy season. Often, clients are more accepting than individual professionals in going all digital.

9. Tax planning. This a value-add for your better clients who are growing their businesses. Include tax planning in your higher service levels and schedule appointments in the fall. Many clients are busy and don’t call because of your billing methods or simple procrastination. In 2018, almost all clients would have benefitted from tax planning. Be more proactive — don’t wait for the phone to ring.

10. Billing and collections. The value of the return decreases after delivery and filing. Expect to be paid at delivery and design processes accordingly. Time is not a measure of value. Value is determined by the client. Having upfront conversations, pricing, and setting expectations will improve cash flow significantly while reducing time spent in the billing and collection process. Firms are utilizing services like QuickFee to improve cash flow and minimize credit card charges.

These are only 10 strategies that will improve productivity, existing revenue, and the client experience associated with the preparation and filing of personal tax returns. New technology is disrupting and enabling firms to continually improve their processes to compete in today’s market.

A combination of a “lean” project and technology review may be the next best step for your firm in sustaining success and remaining future-ready.

For reprint and licensing requests for this article, click here.