Does your 1040 workflow support what clients are really paying you for?

Tax returns are table stakes. Everyone can do them. So, how are you going to stand out? What your clients pay you for is your expertise to help them with their tax position and proactive advice to help them achieve financial goals. Has your workflow really evolved to support these new proactive advisory needs?

Fact: You only have so much time in a day. 

Where are you going to spend it? Tax season is around the corner, and despite new client needs and demands, we still only have 24 hours in a day. Last I checked, that isn’t something Congress can change.

There are legacy processes in the 1040 workflow that are broken.

For example, consider this. I recently did a presentation for 150 accountants. When asked to record how they prepare 1040 returns, they were given 3 options:

1. Key in data to the tax software
2. Scan and OCR data into tax software
3. Outsource the tax preparation data entry

75% responded that they still key in data to the tax software. When technology and resources are available to take the tax preparation data entry off your plate and the talent shortage is a chief concern in public accounting today, how does it make financial sense to utilize your firm’s talent on manual data entry? 

Hand keying data into your tax software is a legacy process that can be addressed with scan and OCR technology and/or outsourcing! Wait- yes, I know. OCR isn’t perfect. And sometimes outsourcing companies make mistakes. And, yes, you ARE the one who signs the tax return. So, that means you have to double check everything, right?

No.

The REAL elephant in the room

…is the review! It’s about breaking some of those legacy processes. Processes that result in over auditing the tax return. Reviewers are a new generation now, and they don’t see the value in the tick and tie. Just like you can’t afford to have your talent spend their time on manual data entry, you can’t afford to invest your time as a final reviewer double checking inputs. 

If you had data perfection on the front end of the process, you wouldn’t even have to review, right?

While that may not be realistic, you can learn to trust the process and implement a more efficient review methodology that will allow you to focus on the position and story inside the return.

The goal should be to liberate the final reviewer to focus only on the story inside the return- that overall tax position. 

Review by exception

To review by exception is where you get permission to focus on the really cool stuff inside a return. As a tax professional who likes to solve problems for your clients, it’s a much more efficient review methodology. By setting the expectation for final reviewing a return only after it has been validated for accuracy, you are simply looking at exceptions. Current year, prior year, and variance data. And, what’s even better is that you don’t even have to get into your tax software to do it. 

Imagine reviewing a return by seeing all exceptions at a glance and being able to dig into them! What’s more, imagine being able to make changes and play around with the data to create ‘what if’ scenarios without worrying about backing out changes before filing the return? This is exactly what a third party 1040 review software like TaxExact™ can accomplish for you.

Permission granted.

I’m giving you permission to focus on the really cool stuff inside the 1040. This is going to liberate you. Not only will it free you from mundane double checking of inputs, it sets the stage for your preparers to learn the tax code. They didn’t hire into this profession to do data entry. They should be curious about what is in the tax return and how to choreograph a conversation about it with the client. There is no need for new accountants to hide behind 5 years of grunt work before becoming client- facing. They won’t do it. There are 11 million job openings in the US right now- a historical record! People don’t want to do some of the more mundane and manual things we used to do in generations past. And, frankly, educated accountants and tax professionals shouldn’t have to, given the technology and resources available today..

Create a better process and trust it.

This is how you will have more high value client conversations and attract talent that wants to do meaningful work.