What Can We Learn About Our Businesses from How CPAs Prepare for the Tax Season?

While working with my CPA firm client, I had a major BFO (Blinding Flash of the Obvious) that reinforces the value of several business concepts my colleagues and I repeatedly discuss with our clients.

1. Preparation – For CPA firms being prepared for tax season is essential to getting through the crunch successfully. Preparation in their case has several aspects:
   1. Software – is the tax prep software up to date?
   2. Materials – have they stocked up on all the forms, office supplies, snacks, etc. they will need?
   3. Process – is the firm’s tax preparation process up to date and communicated to the team?
   4. Training – has everyone been trained in the processes and tasks necessary to prepare their client’s tax returns?
2. Plans – Their plans might reference:
   1. Goals – How many returns filed, total, weekly, etc.
   2. Staffing
   3. Overtime
   4. Client Contact – When will they communicate information requirements to their clients?
   5. Cut Off Date – When will they close the door to new, last-minute clients?
3. Measurements – KPI’s, Dashboard. While a CPA firm will have “year-round” KPI’s, they also will have specific KPI’s to track progress toward their tax season goals.
   Appropriate measurements serve multiple purposes
   1. Management of the workflow and processes
   2. Team Motivation – properly focused measurements enable team wide competition with themselves as a team. They also enable team celebrations.
4. Consistency – A successful CPA firm will use its experience during previous tax seasons to design processes and procedures that will promote operational consistency. The entire firm will be trained on the tax season process before the season begins. Management constantly monitors the firm’s adherence to all their processes. In addition, they are willing to adjust procedures during tax season if absolutely necessary.

So, what can you learn about your business from CPA’s preparation for tax season?

1. Preparation – Being in business is all about managing risk. I find many executives, managers, and owners look primarily to downside or bad risk, hardly ever considering upside or good risk.
   1. Further when it comes to downside risk, most simply worry about it rather than preparing for it. Are you preparing to overcome downside risk?
   2. As to upside risk, very few prepare for the challenges that success brings. Some of these upside risks, such as inability to respond to an increase of inbound lead flow, or over expanding capacity. These risks and others were discussed in my February 12, 2023 blog “More Thoughts on the Importance of Planning.” Does your company have a great answer to one of my favorite coaching questions:

“What if this works?”

2. Plans – Does your organization have goal oriented, goal supporting plans? Do these plans include details about staffing, marketing, product or service additions or revisions? Do your plans have firm deadlines? Does the person who is accountable for achieving each of your plans have the necessary authority to move your organization across the goal line?
3. Measurements – Have you created and implemented appropriate KPI’s for all of the initiatives that are part of your preparation and plans?
4. Consistency – The following slide from the ActionCOACH Presentation Library says it all.

Consistency is all about processes, procedures, automation (when possible), and systems. Does your organization have well documented, effective procedures in place? Do you constantly train and review your company’s processes and systems.

If you did not answer YES to all the questions posed above, your company is in serious danger of shrinking rather than growing, or worse. My colleagues and I are uniquely positioned to assist you in turning the NOs into YES’s.