A significant part of our practice is focused on applying Lean Six Sigma (LSS) methodologies to optimize the production processes and workflows within CPA firms. We apply “lean” principals to every aspect of the firm production processes, but the area that firms most often want to focus on is their tax department which usually has the most interactions with clients and the widest variety of processes.  Focusing on the impact of a process change from the client’s perspective is a critical aspect of applying “lean” methodology and one that firms don’t often take into consideration.  Whether the client is external or internal (other firm personnel), we highlight seven opportunities that firms should review to see if it’s time to consider making a change to their tax processes.


Centralize Contact Information

Challenge: Inconsistencies exist in the contact information for clients within a firm. Traditionally, only administrative personnel could make address changes in practice management systems, tax personnel could make updates in tax programs, and marketing personnel was making changes in the firm’s CRM databases. This leads to potential variations in contact information for the same client.

Solution: Send contact information to a central administrative team that is authorized to access every application and update them to a consistent firm standard.  This results in more timely and consistent updates being completed at a lower cost rather than having multiple personnel, including professional staff, do such maintenance.


Relationship Building

Challenge: Firms that only work with their clients when it’s time to prepare tax returns annually are at risk of being replaced. This is especially true if the client only interacts with the firm by sending in their information and receiving their completed return electronically

Solution: Face to face contact is needed to build long term trust. To maintain the client connection and build an advisory relationship beyond the tax return, proactively meet with clients outside of busy season. Develop a more consultative relationship, which is where the future of the profession is heading. Don’t let physical distance get in the way – use videoconferencing to develop or maintain connections with clients no matter where they are.


Client Management

Challenge: One of the most time-consuming firm processes that provide minimal value from the client’s perspective is the production and distribution of client organizers, especially for those clients that never use or return them.

Solution: Identify clients that don’t use organizers and don’t produce the organizer for them.  Instead, communicate with those clients during planning meetings which documents will be needed and utilize digital portal solutions. Tools such as Lacerte Link, CCH My1040Data and SurePrep TaxCaddy allow the client to upload their documents at their convenience. These tools also provide a dashboard so the accountant can monitor progress, including when all tax data is submitted and ready to move towards preparation.


Data Accumulation and Circulation

Challenge: When clients provide original source documents, the firm is responsible for returning those documents to the client at the completion of the tax process.  These original documents may circulate through tax preparers, reviewers, and then back to the administration to be returned to the client at the completion of the return, a time-wasting manual process which adds no value from the client’s perspective.

Solution: Consider mandating clients only provide copies and enforce this, preferably by utilizing digital tools such as secure email and portals. For those clients that actually do bring in original source documents, have a process to immediately scan and return those documents.


Scanning Technology

Challenge: Scanning technology capabilities are not being maximized. While many firms now utilize scanning technology to capture client source documents, not all take full advantage of the automated bookmarking and data import capabilities that transfers recognized information into the return.

Solution: Centralizing the use of these tools within a well-trained administrative department forces the adoption of a firm standard format for importing and organizing scanned tax files.  This makes it easier, in the long run, to train personnel on that firm standard as well as hold them accountable to adhering to it.  Building quality control and tax oversight at the front end of the scanning process also builds confidence in the resulting image so there is no need to move source documents through the office, which consequently adds no value from a “lean” perspective.


Workstation Displays

Challenge: Valuable time can be lost when tax preparers don’t have adequate screen space for all needed resources and applications during preparation. With more applications going to the cloud and firms increasingly digitizing components of their tax process, it is important that display specifications are upgraded to support this transition.  Today’s tax preparer should have adequate screen real estate to have ALL necessary tax production applications displayed in full-size onscreen.  This means not only having bookmarked images of client source documents, the current year’s input screen, and the previous year’s return, but also the firm’s workflow tool to update statuses, practice management for time entry and billing, and room for other tax work papers, depreciation, and research to be viewed concurrently.

Solution: Consider adding at least one oversize monitor where multiples applications can be viewed simultaneously rather than jumping between applications.


Collaborative Review

Challenge: Tax reviewer “mindshare” is one of the most valuable resources within a firm and can be difficult to capture in traditional review models.  Most often the reviewer documents corrections to be made, which the preparer must interpret and correct at a later time.  The return is then resent to the reviewer who must re-remember the corrections and complete the return.  Firms have found this back and forth significantly reduces the margin on the return as well as gobbling up additional time resources, which again adds little value from the client’s perspective.

Solution: The lean approach is to have the reviewer collaborate in real-time with the preparer to fix all that can be fixed and only send back what must be completed separately.  Having the preparer present with the reviewer allows the reviewer to provide “just in time” education on the corrections and to discuss if any corrections need to be made while that information is still present in the reviewer’s head. Utilizing digital collaboration tools such as Skype, Slack, Zoom or Teams not only allows for audio and video communications but screen sharing so the preparer and reviewer can work collaboratively to get the return “done in one!”

Many firms, particularly those that were early adopters of paperless technologies, believe they are already utilizing best practices. They may not be factoring in the significant evolution of tools and technologies of the past few years. Firms are finding it well worth the time to take a step back and look at production processes, asking where they can trim the fat of timely and costly procedures to be leaner.

This article was originally published for AICPA. Copying or distribution without the publisher’s permission is prohibited.

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