Tax time can be a trying time for many practitioners, but there are ways to ease the burden. Here three leading practitioners share their views on how to manage the surge in financial year-end client demands.
The end of financial year (EOFY) is when the normal flow of business into a practice potentially becomes a torrent, especially in the weeks immediately following as businesses and individual clients seek appointments to put their affairs in order.
However, without the systems and processes to cope with the rush, many practices struggle.
“Our strategy, because the spike in business is unavoidable, is to get clients to think about [EOFY issues] early,” says John Greeve CPA, principal of taxation, accounting and business services practice Kamran Accounting.
Greeve says the practice works hard to migrate its clients to cloud-based software or an electronic cashbook (which shows a client’s profit and loss), thereby enabling it to gain an accurate assessment of their current financial position.
“It’s not just about tax, it’s also about financing. So, we’re more worried about what their balance sheet is like. They could have significant financial obligations coming up.”
The firm undertakes cash flow analysis, not just with regards to the EOFY, but to project forward to determine how it would present with a bank.
Greeve emphasises that because his practice has transitioned to becoming as paperless as possible, it can rapidly access a lot of data.
“Every job is tracked online, so we can look back at who did it last year and [designate] the same person.” In other words, Kamran Accounting uses technology to ensure the right personnel is assigned the right jobs.
Communication and preparation
“We run newsletters all year round so we can send out articles and give clients specific content on what they need to do,” Greeve continues.
“For example, for a farmer, it’s going to be about taking advantage of accelerated deductions on water and entering into contracts now.
“There’s a lot going on at this time of the year, so we need to be highly organised. The flood is more in the second week of July when they all come pouring in.”
It’s important for practices to be appropriately resourced through good systems and with enough people on deck to handle the added workload, he adds.
“You need to be able to tool up quickly. Be prepared to do extra time and offer staff time off in lieu. Your people need to be well-trained to understand what needs to be achieved.”
When necessary, Kamran Accounting also outsources.
“You need to be flexible and have part-timers on hand [with appropriate skills] and for them to support each other,” Greeve says.
“[Above all], you need systems and technologies in place so you can get to data when you need it, which reduces time delays.”
Maximising workflow efficiencies
Ian Swallow CPA, director of BSM Accountants, agrees that good systems and management are essential for handling heavy EOFY workloads.
The endgame is to maximise efficiencies and productivity, Swallow says, and to exert more client control.
“You do need to be able to take control of your clients when they walk in the door to organise your work time most efficiently,” he says.
“Small accounts can take up a lot of time, and usually they don’t need a partner to handle their work.”
He believes the way forward for practices is to in future focus on higher level services such as taxation and business advice.
“The greatest tip I can give is that there’s a continual need for improvement within practices, and that means being smarter operators,” he says. “Be a good listener and ask them what they need.
“If you’re there for the long haul you’ll make money on the quality of the way you deal with clients. You need to add value and keep to your professional values, [because] it’s the way you treat your clients and staff [that will] get you through the busy periods.”
Spreading the load
Be this as it may, Marco Russo CPA, director of accounting firm Regency Partners, has a slightly different take on the benefits of technology.
Russo believes the EOFY “flood” has worsened over the years as a result of technology and automation because work not only comes more quickly but in greater bulk.
“Before, people came in with paper-based documents, but now it’s mainly electronic,” he notes, adding that over the course of the year, his practice engages with its clients and does their accounting on a rolling monthly or quarterly basis to streamline processing.
“We have ongoing communication with our clients to get the work done and to help them, so we can ease the bottlenecks,” Russo states.
“The technology that’s available helps you to get through work quicker and manage workflows better.”
Instead of investing in additional staff, Russo says Regency Partners is investing in better systems, including a new online workflow platform to enhance portfolio management across the practice.
3 points to remember at EOFY
- Working and communicating with clients on an ongoing basis throughout the year can help to reduce bottlenecks around tax time.
- Having good technology systems in place that enables practices to easily tap into clients’ financials and source data quickly will alleviate delays and expedite accounts processing.
- Practices that can work closely with clients and manage their demands with existing resources will have more time to devote to higher level advisory services.
Read next: CPA Australia’s 11 EOFY resolutions for small business.
Listen: Tips to manage the Australian Taxation Office’s Single Touch Payroll requirements.
Access: CPA Australia’s 2019 year-end resources, including tax tips.