How to Teach Reviewing and Time Management

16 Sep How to Teach Reviewing and Time Management

Let’s discuss two training issues in detail: teaching time management and teaching review skill.

The biggest training gift that you can give your staff is time management training. You may want to offer formal training, but I have never found one that was really specific to CPA firms and the daily challenges we face.

Two time-management skills are at the heart of what CPA firms do. First, teach your staff task switching. By that I mean they shouldn’t get locked in on one type of task to the exclusion of others.

A typical tax preparer completes the following tasks over and over again:

1. Initial preparation to the point of questions
2. Processing answers from clients
3. Self-review
4. Addressing review notes from reviewers
5. Preparing returns to be finalized

Preparers tend to lock in on one type of task and try to advance all of the projects in that status before moving on to another type of task. You’ll typically hear something like this: “I just want to get all of my returns in process. Then, I’ll work on processing answers and finalizing returns.”

This causes “what’s the status of” hell. Working solely on returns in the initial preparation stage causes projects that are already aging to fall even further behind. When a project ages to 14 days or so, you can expect to get client phone calls and email messages.

Teach preparers to rotate tasks. In the morning, work on initial preparation. In the afternoon, switch to the other less time-consuming tasks such as processing answers and self-reviews. They should show a slight bias toward returns nearing completion.

If a preparer has 50 returns in progress in various stages, you have 50 clients who will start contacting you at the 14-day stage. Focusing on returns nearing completion reduces the number of clients who might be contacting you. You are systematically pruning off the older returns and thus preventing the client inquiries that suck the life out of your schedule.

Of course, that bias only works to a point. Obviously, returns have to get to the final stages to be completed, so preparers must work on returns in all stages but – with an eye toward moving clients out of your system.

Set project priorities with one-minute goal-setting meetings. You might need to meet with newbies every morning to keep them working on the right tasks. Advanced preparers should be able to set priorities on their own with just weekly oversight. You can just review project statuses at a high level through your project management system to make certain returns flow through your process on a timely basis.

Reviewers have one task – reviewing. We beat this concept to death earlier. Returns hung up in the review stage are the biggest cause of partner suicides. Fish gotta swim. Birds gotta fly. Reviewers gotta review.

Few tasks are more loathsome to me than reviewing tax returns. I would gladly suffer a month of daily root canals than review another return in my lifetime. I suspect that I’m not alone. Most employees will do every other possible task before reviewing tax returns. Yet no other task is nearly as important to client retention as great reviews. Let’s discuss building great review skills in your staff.

Fresh eyes are the key to great review skills. Fresh eyes see tax returns without expectations. If a reviewer expects an outcome, he will likely not see errors. For example, if I assume a preparer got a client’s name correct on a return, I will likely miss a misspelled name. Why would I assume the name would be correct? Because the preparer gets it correct 95 percent of the time. As a reviewer, I guard against the 5 percent.

Give me a reviewer with fresh eyes over the most knowledgeable tax guru on the planet. Fresh eyes are skeptical eyes that are open to the possibility of what seem like obvious errors – like misspelled names.

You develop fresh eyes by building skeptical habits. For client names, I look at the prior year return and then the current year W-2 form. I am looking for evidence that the name is incorrect. I am looking for inconsistency between sources. You would be amazed, but maybe not, by the number of name errors I find in prior-year returns for new clients. In most cases, the clients never knew their names were misspelled. They expected the return to be correct, so they never saw the errors. Clients don’t have fresh eyes, but they pay us to have them.

You maintain fresh eyes by taking frequent breaks. I don’t sit through five or six return reviews without a break. I break after every return review. I don’t take 10 minutes, but I at least get up and walk down the hall and back. Weary eyes obviously aren’t fresh eyes.

Self-reviews of returns depend on fresh eyes. We require preparers to self-review their returns before passing them on to the reviewer. Reviewing your own work is hard. Doing it without fresh eyes is impossible.

One-minute reprimands of preparers, when done well by a reviewer, sharpen fresh eye skills for preparers. Most errors caught by reviewers are self-review failures. Many firms don’t even provide feedback to preparers on errors. The reviewers just make the corrections and move on. That doesn’t increase the skill level of preparers. Errors don’t decrease when preparers don’t know they’re making them.

In our firm, preparers make return corrections based on reviewer notes. If you have to correct your errors, you might as well not make them, or find them yourself in a better self-review. Not only do preparers correct their own errors, we track errors by error type. We track four types of errors:

1. Data entry mistakes. We consider these the most serious of errors as they should be caught 100 percent of the time during self-review. Data entry mistakes are mistakes in the numbers. If federal withholding is wrong, that is a data entry mistake. Data entry mistakes cause CP2000 letters from the IRS. Nothing causes more serious issues with clients than IRS letters caused by bad data entry.
2. Cosmetic errors. These are errors that don’t affect the numbers on a return, but need to be fixed. Misspellings fall into this category. We require preparers to visually inspect each supporting schedule and statement. I frequently find misspellings hiding there. Bad or incomplete 1040X explanations fall into the cosmetic category as well.
3. Concept errors. These are errors made from a lack of knowledge. An example of a concept error is counting S corporation owner-guaranteed loans as part of basis. The solution to concept errors is more training.
4. These aren’t errors at all. Often we ask the preparer a question like, “Did you consider making an end-of-year salary accrual?” We also use comments as a place to say nice things like, “Great job spotting the points on that settlement statement!” This is a mini one-minute praising. The in-person praisings are more effective, but the comments work pretty well. They also let preparers know that review notes aren’t always bad news. I use my “fresh eyes” walkaround break to give one-minute praisings in person.