With the new year comes the start of a new tax season. We have some great suggestions to get ready as you and your firm are preparing. We encourage our members and all accountants and CPAs to prepare for the upcoming tax season while you have a little breathing room before the really busy season begins. We encourage you to prepare your technology and methodology, your staff, and your clients.
Prepare your technology and methodology
The pandemic has forced accounting practices to change their approach to communicating with clients, collecting and storing data, and maintaining security and confidentiality. If you have not already done so, implement a secure online client tax organizer for clients to load data and review completed tax documents. Use eSignature software to speed the completion of documents in an atmosphere where in-person meetings are becoming less and less common. Be sure to update your software and your security systems, and have procedures in place to confirm that your remote staff is also keeping their technology up-to-date and protected.
Re-evaluate your security protocols. Make sure your communication systems with both clients and remote staff are secure from prying ears. There are a number of group meeting platforms designed specifically for businesses to maintain confidentiality when you are having a “face-to-face” web call with your clients, and there are workforce project management tools that provide that same confidentiality when your staff communicates online. Some of these tools also incorporate clever ways to provide the feeling of “hanging out around the water cooler” to maintain company camaraderie and morale.
Your remote employees also need to have protocols for their home offices to protect their own technology from security breaches and properly dispose of any paperwork having anything to do with business. Discarding work papers in household trash cans, especially when working with clients’ sensitive data, is not an option. Home shredders, while better than the trash can, are not very thorough. Establish a system of professional shredding, either by having staff deliver their discarded papers to the office to be shredded in bulk by a shredding service or having staff deliver their papers to the shredding company.
Prepare your staff and yourself
Evaluate your workforce to determine if you have enough staff, if they have the right expertise, and if you need to replace anyone, hire more staff, or outsource certain tasks.
Continue to stay up-to-date on how the pandemic has impacted the operations and finances of your business clients. Individuals have also been impacted by employment disruptions, stimulus checks, and other ongoing financial impacts due to the pandemic and economic instability. In addition, recent severe weather has caused unexpected and serious damage to both businesses and residences.
Educate yourself and your staff on the tax implications of things like the Employee Retention Tax Credit (ERTC) due to Covid-19, continuing impact of PPP loans, ERTC due to qualified disasters, and proceeds from business interruption insurance or flood/natural disaster and other insurance policies. For your individual taxpayer clients, consider the tax impact of their home office expenses, stimulus payments, and advanced child tax credit payments, as well as any insurance payments they may have received due to the recent hurricane damage along the northeast corridor.
Some bills that are currently being considered in Congress may have a retroactive impact, for instance, changes to the capital gains tax rate, which is proposed to be retroactive to September 13, 2021. Be sure to remain constantly vigilant about these bills and any recent changes to tax law.
Prepare your clients
Hopefully, you have established a system of frequent interaction with your clients throughout the year in order to keep your service at the top of their minds year-round. Sending regular updates about possible tax changes, advice for preparing for tax season, and other timely help will have them turning to you when they have questions or need additional financial services.
Send reminders to current clients about how they can prepare for the upcoming tax season. For your best clients, the ones you want more of, offer an incentive for referrals. You may want to consider doing a little survey of your best clients to see what they like about your practice, what other services you could offer that they would be interested in, and what online portals they use (social media, LinkedIn, etc.) or trade groups or magazines they like, so that you can more effectively advertise for more clients like them.
In sum, carefully review your technology and security to make sure it’s current and secure; evaluate your workforce and the financial impact on your practice if you make any changes; and service your current clients while asking them for referrals or surveying them in order to obtain new, high-quality clients. Taking these steps now will ensure that you will have a productive and profitable tax season.