Optimizing Workflows to Improve Firm Production

CPAs have had to deal with a significant amount of technological evolution in their careers, particularly in the past decade as the Internet and personal computers fundamentally changed how people communicate and collaborate around accounting work.  The conservative nature of accountants has most often placed them in the category of “settlers” within the technology adoption curve, waiting for “pioneer” firms and clients to thoroughly test, standardize, and prove that there is a return on any technology investment before jumping on board.  This has also been the case for workflow applications in firms, with those that have already integrated workflow tools finding that they are leading to significant time savings, helping the firm to service clients more effectively.  With the latest CPAFMA survey finding, 62% of firms have adopted a digital workflow tool – it’s time for the remaining firms to take a look.

Firms have traditionally used Practice Management projects, spreadsheets, and manually updated lead sheets attached to tax documents to manage the workflows within their firms.  The issue with manual systems has been that it is difficult for everyone to access the latest information and that they had to be updated and reconciled frequently, which often took a significant amount of time before weekly staff meetings.  One of the most effective technological solutions was the development of dedicated digital workflow tracking systems, which firm personnel would only update in one place and then make the status available to all authorized personnel through their computer.  These digital workflow systems were originally created by the overseas tax outsourcing companies and then picked up by the major document management companies and accounting application vendors, which expanded their usage to other departmental workflow processes as well.  The common theme was that these workflow products improved how firms managed electronic files and the status of all projects, which streamlined their production processes, and in turn improved profitability.

Today, the most effective workflow tools integrate directly with the firm’s tax application, document management, portal, and practice management.  The better the integration between all of these applications, the less duplicate entry, and reconciliation of data that firms have to do.  Some of the major workflow vendors include XCM Solutions Workflow, Thomson Reuters FirmFlow, CCH Workstream, Doc-it WorkFlow, and Office Tools, Professional.  When evaluating products, firms must evaluate the number of distinct workflows, which in most cases is focused on the much higher volume of tax clients than audit or accounting clients.  To make a selection, firms should consider the way these products would integrate with their existing applications and how the product could be customized to handle their various workflows, with special emphasis placed on those processes where the client is directly impacted.  Below, we highlight seven opportunities for firms to evaluate where workflow tools can streamline firm procedures.

1. Stratifying returns by difficulty so that complex returns can be assigned to specific expertise, general returns that would flow through a specific pool of personnel, and simple returns which could be assigned to interns and seniors to complete and review instead of partners or managers.  Firms may also want to stratify returns that are always placed on an extension to minimize the amount of production time allocated during the busy season.
2. Documenting statuses such as Organizer Printing, Digital Delivery or Suppression, Engagement Letter Receipt, and any special instructions can save time year after year when it is captured by the workflow tool as this information will roll forward from year to year.
3. Capturing when client information is received by the firm either physically or digitally starts the aging of the return within the firm’s workflow system and notifies the in-charge for that client to begin the production process.  This includes noting which documents may be missing within the workflow tool so that subsequent delivery of any documents puts the return back into production.
4. Documenting the amount of the previous year’s invoice and indicating the projected amount for the current year’s return invoice within the workflow tool allows the reviewer to determine an appropriate billing amount at the moment when they have the most knowledge of the return, which can then be prepared by the administration and delivered with the return.
5. Centralizing due dates for all entities and jurisdictions so that the system can provide warnings as the due dates approach and allow managers to re-assign projects to better fit staffing availability.
6. Building quality control into the preparation process by requiring the completion of a “mini-review” checklist of the most common mistakes that cause a reviewer to send the return back for preparation (which should be signed off by the preparer before submission for review).
7. Documenting delivery instructions in one central location such that if anyone becomes aware of the last minute change, the administration will be able to adjust delivery and personnel will be able to see what has already been finalized.

One immediate benefit of utilizing workflow tools is that they promote adherence to a firm standard process which is much easier to train personnel on than having unique processes for each partner or manager.  Firm standards will help the firm move towards a more streamlined assembly line production process.

On a side note, some firm partners are concerned that more digital interaction via workflow tools can cause less face time with clients, which in turn could cause their tax practice to be viewed as a commodity service.  This could easily become the case unless the partners and managers proactively make an effort to maintain the client relationship, which can actually be helped with the features in today’s workflow tools.  While most of the focus on implementing workflow tools is on internal tax production, firms can benefit greatly by looking at the workflow functions where firm personnel commonly interact with clients and ensure that processes and training are in place to make those interactions an epic experience for the client.  This could include scheduling a personal call with the client prior to the busy season to offer to prepare a tax projection and other advice.  This call could also be made after the engagement letter and organizer are delivered, which would provide firm personnel the opportunity to explain how to use the firm’s portal or encrypted email to deliver documents and why they would be more convenient and secure than having the client physically deliver documents.  Firms are also finding that the workflow tool can help with providing a client invoice with the return so they can pay immediately, which most clients would expect today.  With all the benefits offered by today’s workflow tools, firms should make an effort to re-evaluate and implement them so they can take advantage of them prior to the upcoming busy season.

This article has been updated from the version which was originally published in The Practicing CPA, a publication of the American Institute of Certified Public Accountants.  Copying or distribution without the publisher’s permission is prohibited.