Creating a more efficient firm: Best practices, offshoring, and preparing for a successful season

By Mark Gallegos, CPA, MST; Shannon Hudson, CPA, MST; Pamela Slatten, CPA, J.D.; and Joye Sistrunk, CPA
December 1, 2024

Editor: April Walker, CPA, CGMA

In today’s competitive business environment, accounting and tax firms must continually strive for efficiency and effectiveness. The path to achieving a more efficient firm involves adopting best practices, exploring offshoring options, and meticulously preparing for the peak season. This comprehensive approach ensures that firms remain competitive, deliver exceptional client service, achieve sustainable growth, and foster a firm culture that attracts and retains top talent.

Best practices and procedures for efficiency

Developing best practices for an accounting firm is not a one-size-fits-all proposition. But the more that processes and procedures can be standardized and then regularly reviewed for improvements, the more efficiencies can be realized. The following are some areas for a firm to think about in developing best practices.

Streamlining workflows and processes

Efficient firms prioritize the streamlining of workflows and processes. This involves mapping out every step of a task, identifying bottlenecks, and implementing solutions to eliminate unnecessary steps. Using process mapping tools, such as flowcharts or workflow diagrams, can help visualize and optimize processes. Regularly reviewing and updating these workflows ensures continuous improvement.

Implementing standard operating procedures

Standard operating procedures (SOPs) provide a clear, step-by-step guide for routine tasks. SOPs ensure consistency, reduce the learning curve for new employees, and minimize errors. Regular training and updates to SOPs are essential to keep them relevant and effective. By having well-documented procedures, firms can maintain high standards of service delivery as well as reduce training and onboarding time of new team members.

Leveraging technology and automation

Technology plays a crucial role in enhancing efficiency. Investing in advanced accounting software, cloud-based solutions, and automation tools can significantly reduce manual work and minimize errors. For instance, using automation for data entry of tax documents, invoice processing, and report generation saves time and allows staff to focus on more strategic tasks. Additionally, employing practice management software can streamline client communication, task tracking, and document management.

Integrating AI and machine learning

Beyond traditional automation, integrating artificial intelligence (AI) and machine learning can take efficiency to the next level. AI can be used for predictive analytics in financial forecasting, automating routine tasks with higher accuracy, and even detecting potential compliance issues before they arise. Investing in these advanced technologies can keep your firm ahead of the curve, but be sure to consider the risks around AI with your team.

Fostering a culture of continuous improvement

Creating a culture that values continuous improvement encourages employees to seek better ways of doing things. Implementing regular feedback mechanisms, such as suggestion boxes or regular team meetings, allows staff to share their ideas for improvement. Recognizing and rewarding innovative solutions fosters a sense of ownership and motivates employees to contribute to the firm’s success.

Enhancing communication and collaboration

Effective communication and collaboration are vital for efficiency. Utilizing collaboration tools such as Slack, Microsoft Teams, Zoom, Karbon, TaxDome, or Asana can enhance real-time communication, project management, and document sharing. Scheduling weekly or biweekly meetings helps to ensure projects are on task and workload is properly allocated and that the overall vision of teamwork is supported. Encouraging open communication and regular team meetings ensures that everyone is aligned and working toward common goals.

Focusing on employee well-being

Efficiency is not just about processes and technology; it is also about people. A focus on employee well-being, including mental health support, flexible working conditions, and a positive work culture, can lead to higher productivity and lower turnover. Consider implementing wellness programs and regular check-ins to ensure your team is supported, particularly during peak seasons.

Emphasizing client-centric approaches

In addition to streamlining workflows and leveraging technology, a client-centric approach is critical. Understanding client needs and tailoring services to meet those needs can significantly enhance client satisfaction and retention. Training clients as they are onboarded by effectively communicating the firm’s processes and the expected timelines of events reduces confusion and unnecessary calls while increasing client satisfaction. Implementing client feedback loops and personalized service offerings can differentiate your firm in a competitive market.

Offshoring: Benefits and challenges

There are many considerations when making the decision about whether to offshore work. The hope, of course, is that it will increase your firm’s efficiency, but careful planning is needed in order to realize the benefits. The following considerations may be helpful.

Cost savings and resource optimization

Offshoring can offer significant cost savings by leveraging lower labor costs and more available personnel in other countries. Firms can allocate these savings to invest in technology, training, and other critical areas. Offshoring also allows firms to optimize their resources, ensuring that in-house staff can focus on high-value tasks while routine tasks are handled by offshore teams.

Access to a global talent pool

Offshoring provides access to a diverse and skilled talent pool. Countries such as India and the Philippines, and a number of Eastern European nations, have a wealth of highly qualified professionals in accounting, tax, finance, and information technology. This access to global talent can enhance the quality of work and bring fresh perspectives to the firm.

Scalability and flexibility

Offshoring offers scalability and flexibility, allowing firms to quickly adjust their workforce based on workload demands. During peak seasons, firms can ramp up their offshore teams to manage increased volumes of work, ensuring timely delivery and client satisfaction. Conversely, during slower periods, firms can scale down their offshore operations to manage costs effectively.

Potential challenges and mitigation strategies

While offshoring presents numerous benefits, it also comes with challenges. Language barriers, cultural differences, quality control, accuracy, and time zone disparities can affect communication and collaboration. To mitigate these challenges, firms should invest in cross-cultural training, establish clear communication protocols, and utilize collaboration tools that facilitate real-time communication. Regular virtual meetings and on-site visits can also strengthen relationships and ensure alignment.

Communication and quality control

To mitigate these challenges, consider establishing a quality assurance procedure and reviews to monitor accuracy and consistency of work. Weekly or biweekly team meetings with the offshore company allow better integration into your company culture and standards. Also consider including them in any department-specific trainings so they are aware of your standards and protocols.

Data security and compliance

Data security and compliance are critical considerations when offshoring. Firms must ensure that offshore partners adhere to strict data protection policies and comply with relevant regulations, such as the General Data Protection Regulation (GDPR) or the Health Insurance Portability and Accountability Act (HIPAA). Conducting thorough due diligence, implementing robust security measures, and regularly auditing offshore operations can help safeguard sensitive client information. Additionally, the firm is likely required to obtain consent from the client under Sec. 7216.

Enhancing offshore integration

To maximize the benefits of offshoring, it is essential to integrate offshore teams fully into your firm’s culture and operations. This includes not only regular communication but also involving offshore teams in strategic planning and decision-making processes. When offshore teams feel like a true part of the organization, they are more motivated and aligned with the firm’s goals.

Exploring nearshoring as an alternative

While offshoring offers many advantages, nearshoring — outsourcing work to nearby countries — can provide similar benefits with fewer challenges. Nearshoring often allows for closer time zone alignment, cultural similarities, and easier travel, which can improve collaboration and reduce some of the barriers associated with traditional offshoring.

Onshore alternatives

What if you do not feel ready to take your company’s work offshore? There are several alternatives to explore that maintain the work in the United States while still utilizing some of the aforementioned benefits of flexibility and efficiency.

Setting your firm up for a successful season

The planning and preparation time leading up to tax return filing season is an important part of the path to success for the season itself. Here are some points to consider during this critical time of getting ready for a successful season.

Early planning and preparation

Successful firms understand the importance of early planning and preparation for the peak season. This involves conducting a thorough review of previous seasons, identifying areas for improvement, and setting clear objectives. Creating a detailed timeline and assigning a responsible party for milestones ensures that all tasks are completed on time and that the firm is well prepared for the busy period.

Staff training and development

Investing in staff training and development is crucial for a successful season. Providing comprehensive training on new software, regulations, and best practices ensures that staff are well equipped to handle increased workloads. Encouraging professional development through workshops, webinars, and certifications fosters a knowledgeable and motivated workforce.

Client communication and engagement

Proactive client communication and engagement are essential for managing expectations and ensuring client satisfaction. Firms should reach out to clients well in advance to gather necessary documentation, discuss any changes in tax laws or regulations, and address any concerns. Regular updates and transparent communication throughout the season build trust and strengthen client relationships. Consider planning to file extensions to stretch the workflow past peak season for any clients whose circumstances do not prevent an extension; such extensions should be communicated early. Clients who will not be extended can be scheduled out with staggering deadlines to provide a steadier workflow within the office.

Resource allocation and workload management

Efficient resource allocation and workload management are critical for meeting deadlines and maintaining quality. Using project management tools to assign tasks, track progress, and monitor deadlines ensures that work is evenly distributed and completed on time. Implementing flexible work arrangements, such as remote work or flexible hours, can also help manage workloads and maintain work/life balance for staff. Consider reducing summer hours as a reward for the extra time and effort contributed during peak times.

Implementing predictive workload management

Using data analytics to predict workload spikes and resource needs can allow firms to plan more effectively for peak seasons. By analyzing past seasons’ data, firms can anticipate when and where additional resources will be needed, enabling proactive hiring, training, and resource allocation.

Incorporating client segmentation strategies

Client segmentation can help firms prioritize and tailor their services during busy season. By categorizing clients based on revenue potential, complexity, or specific needs, firms can allocate their most skilled resources to high-value clients, ensuring optimal service delivery and client satisfaction.

Leveraging technology for peak efficiency

During the peak season, leveraging technology becomes even more crucial. Using advanced software for tax preparation, audit management, and financial reporting can streamline processes and reduce the time spent on manual tasks. Additionally, utilizing data analytics and reporting tools can provide valuable insights into performance metrics, enabling firms to make informed decisions and optimize operations.

Quality assurance and risk management

Maintaining high standards of quality and managing risks are paramount during busy season. Standardized checklists may reduce error rates and ensure firm policies are followed. Implementing rigorous quality assurance processes, such as peer reviews and double-checking work, ensures accuracy and compliance. Additionally, identifying potential risks, such as data breaches or system failures, and developing contingency plans can help mitigate disruptions and maintain continuity.

Celebrating success and learning from challenges

After the peak season, it is essential to celebrate successes and learn from challenges. Conducting a thorough post-season review, gathering feedback from staff and clients, and identifying areas for improvement can inform future strategies. Recognizing and rewarding employees’ hard work and dedication boosts morale and motivates them for the next season.

After the season, review performance, identify areas for improvement, and make necessary adjustments for future seasons. Gather feedback from staff and clients to understand their experiences and implement improvements. Involve the team in developing new procedures for the next season and get their help implementing the changes during the slower periods.

Positioned for growth and success

Creating a more efficient firm requires a multifaceted approach that includes adopting best practices, exploring offshoring options, and preparing meticulously for the peak season. By streamlining workflows, leveraging technology, and fostering a culture of continuous improvement, firms can enhance their efficiency and deliver exceptional client service. Offshoring offers cost savings, access to global talent, and scalability, but firms must navigate challenges related to communication, data security, and compliance. Early planning, staff training, proactive client engagement, and effective resource management are key to a successful season. By embracing these strategies, firms can position themselves for sustained growth and success in an increasingly competitive landscape.

Contributors

Mark Gallegos, CPA, MST, is partner with Porte Brown Accountants & Advisers in Elgin, Ill. Shannon Hudson, CPA, MST, is a founding partner of Altair Group PLLC in Bedford, N.H. Pamela Slatten, CPA, J.D., is an attorney and director with Marietta CPAs in Indianapolis. Joye Sistrunk, CPA, CGFM, is the principal/founder of Premier Group Services in Lanham, Md. April Walker, CPA, CGMA, is the AICPA’s lead manager–Tax Practice & Ethics, Public Accounting. Gallegos, Hudson, Slatten, and Sistrunk are members of, and Walker is staff liaison to, the AICPA Tax Practice Management Committee. For more information about this column, contact thetaxadviser@aicpa.org.