End the Tax Season Pain – Automate or Delegate – CPA Lives Matter - Clarity Practice Management
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End the Tax Season Pain – Automate or Delegate – CPA Lives Matter

End the Tax Season Pain – Automate or Delegate – CPA Lives Matter

Are you e-filing your clients’ tax returns?  Are you the one hassling your clients to get their 8879’s in?  Do you scan your client’s files? Are you calling clients to get paid?  I recently talked to a partner in a small CPA firm, who does all of the above.  I asked him why he doesn’t hire an admin person to do these repetitive and relatively easy tasks.


He told me this is a chicken or egg problem.  He needs to hire the admin person, but he can’t afford the person until he grows his practice some.  Of course, he can’t grow his practice, since he’s doing admin instead of  billing  or marketing.  Sometimes we believe CPA practices are fundamentally different than other businesses.  They’re not.   All business owners face his problem in the early stages of growth.  We’re re-plowing ground plowed before by literally millions of other businesses.


Let’s make this simple.  If a task doesn’t add value to a client’s tax return, automate it or delegate it.


I’m certain you’re the world’s best presser of that e-file button, and your scans of W-2 forms are modern art masterpieces.  However, out of the seven billion people on the planet, four or five billion can adequately, and less expensively, press that e-file button and scan those W-2’s.


If you bill $250 per hour, every hour you waste on admin costs you $250 less the $15 an hour cost of a decent admin person.  If you spend one hundred hours during tax season on admin, you lose $23,500.   Chicken or egg my backside.


In our firm, during tax season, we have four full time admin staff.  They do everything from up front scanning, to appointment scheduling, to final scanning, to posting final returns to Clarity Practice Management.  That leaves just two things for our professional staff: return preparation and review.


Here’s another revelation.  You can hire someone else to do 90% of the data entry for tax returns.  It doesn’t take a Masters in Taxation to enter W-2 and 1099 forms.  So instead of wasting your time entering thousands of these forms, hire an entry level staffer to do this instead.  There’s no reason for you, the $200K person, to do the work of a $40K person, unless of course, you think useless repetitive work builds your character.  My character development was complete thousands of W-2’s ago.


We don’t even have entry level staff enter W-2’s and 1099’s.  We pay CCH $9 per return to use their scan and populate software called Autoflow.  We validate the data entry using an entry level admin person.  How much education does it take to see if the $1,000 on the W-2 matches the $1,000 imported into the tax return?  French fry cooks at McDonalds probably need more training.  Our preparers are busy preparing schedules C,D,E, and others that require their training and experience.


I call automate or delegate “ruthlessly efficient workflow” (R.E.W.).  R.E.W. forces you to push tasks down to the least costly alternative, and many times that least costly alternative is a software application.


Real estate appraisers use the highest and best use approach to value properties.  Value your time the same way.  Tomorrow morning, while tax season is still young and your family still recognizes your face, quit asking if you should delegate tasks.  Start asking how you can delegate them.  Desperation is the mother of tax season efficiency.


For many tasks, you won’t be able to delegate 100% of a task, since you likely haven’t trained anyone else to do it.  Instead break the task down into two types of sub-tasks: those requiring your expertise and those that don’t.


This past December, I worked on an accounting system conversion, not exactly the type of engagement that would seem to involve tasks that can easily be done by entry level staff.  However, I was busy as hell and needed to free up some hours.  OK, I just wanted more time to develop a practice niche in beer drinking.


I exported data from the old system and organized the cleanup portion of the import so that entry level staff could assist me.  I gave them raw Excel worksheets and spent a few minutes teaching them the cleanup procedures.  Then I moved on to the next task that actually required twenty-six years of accounting systems experience.  I’m not the only monkey on the planet, who can use Excel’s search and replace function.


This tax season, adopt ruthlessly efficient workflow for your CPA, accounting, or tax firm.  Stop asking “Should I delegate?” and start asking “How can I delegate?”  Hire a good admin person and an entry level staffer.  Stop the weekly hundred hour work week.  CPA lives matter.


Thanks for reading!

Frank Stitely, CPA, CVA


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