5 TIPS FOR A STRESS-FREE ACCOUNTING BUSY SEASON

January into April is the most stressful time of year for most accountants and bookkeepers in the U.S. and Canada. Whether you’re managing internal accounts for your company or providing accounting services to business and individual clients, it can be tough to stay on top of everything. With some forward planning, account automation and the right tools, however, you can take control during tax season.

That starts with managing your clients — asking for what you need, setting expectations and ensuring they provide you with good quality financial and bookkeeping information. The way you collect data matters, too. Juggling multiple Excel spreadsheets, paper forms, PDFs, emails and receipts is a surefire way to pile on the stress.

Accounting automation can help, by rationalizing the data you need, getting it all into a similar format, and sharing it with your team. From there, it’s relatively simple to plug everything into your accounting software, check all the information, run the calculations, create reports and file the tax return.

Let’s explore five key tactics you can adopt to ensure you are in full command of busy season

1. Balance Your Staff Against How Many Clients You Have

It’s easy for accountants to take on lots of clients only to be overwhelmed by tax season. Before tax season arrives, carefully review your staffing levels and ensure you have enough experts in place to meet client needs. 

If you’re going to be short-staffed, consider building out your team or outsourcing work during the busy season. Try not to overburden your current staff members — burnout can be a real problem for bookkeepers and accountants, which can lead to mistakes and inaccurate returns — not to mention problems with staff retention.   

It’s helpful to review your client list, too, and estimate roughly how much time you’ll need to spend on each one. Clients with a good handle on their own bookkeeping and reconciliation will be much faster and easier to deal with than those who drop a shoebox of receipts on your desk.

This is also a good time to review client bookkeeping systems, so you have an overview of their general ledger and other software.

2. Review Tax Law Requirements and Changes Prior to Tax Season

The tax code is changing constantly, and it can be difficult to keep up. It’s worth spending some time reminding yourself of changes before tax season — so you’re not having to double-check new requirements while you’re working on tax returns. Collaborate with other partners and team members to train everyone on rules changes, and create quick-reference guides for at-a-glance updates.

3. Clearly Communicate Accounting Requirements to Your Clients

Taking the lead on client communications means you can get the bookkeeping and accounting information you need, when you need it. Start early — late December and early January are ideal times to remind clients to think about the approaching end of the current tax year and prepare to file their taxes.

Provide them with a list of the information and reports you’ll need between February and March so you can get a head start on their tax preparations. Sending out a checklist of the information you need means clients can focus on getting the details together, meaning less of a rush at tax time. 

Here are some areas to ask about:

Helpful Information Requests from Individual Taxpayers

• Social Security Numbers and information
• Information from their retirement provider on any contributions they’ve made to retirement accounts, whether individual, through a 401(K), or via other means
• Information from their broker if they’re putting money into non-retirement investments
• Details of other income, for example, through rental properties, interest payments or other means, as reported on 1099 forms (in the U.S.)
• Tax deduction documents, like mortgage or student loan interest
• Any relevant expenses, especially if they’re itemizing deductions
• The amounts of any estimated taxes they’ve paid
• A copy of their W2 pay and any other income streams
• Information that may affect their filing or tax credits, such as their family status, health insurance contributions and similar

Helpful Information Requests from Small Business Taxpayers

• Employer Identification Numbers and other business information
• A profit and loss report for the year, together with expense categories
• A balance sheet for the year that lists all of their assets
• A depreciation schedule, together with assets
• The payroll report for the year
• Details of costs of goods sold
• Details of any provincial, state, federal and sales taxes already paid, whether through payroll, extra withholding, estimated taxes or other means
• Total income and any (in the U.S.) 1099-NEC or other 1099 forms they have received that show income
• Details of any changes in ownership or business structure
• Information on money taken out of the business as salary, drawings or distributions
• Any other information you believe is relevant

4. Assist Small Business Clients with End-of-year Reconciliation and Closedown

Stressful clients lead to stressful accounting and tax returns. That’s why it’s helpful to work with your small business clients at the end of the year to help them get everything in order. Here are some of the areas where you can assist:

• Ensuring all income, expenses and receipts for the year are entered into the bookkeeping system and reconciled against bank account transactions
• Reviewing payroll and distribution amounts and recommending final, EOY payments to business owners
• Going through their profit and loss report to ensure they’re claiming all of the expenses they’re entitled to
• Understanding retirement contributions and helping owners take advantage of contribution limits each year

This approach builds trust with clients. It shows you’re proactively helping them to manage business finances, and getting their books into better shape for year-end reporting. It’s a win-win.

5. Request Bookkeeping and Accounting Information in a Specific Way

You can save yourself an enormous amount of hassle by collecting financial and accounting information in a clear, concise and consistent way. This will reduce manual errors and centralize your financial data and reports for specific clients. Having everything at your fingertips makes tax preparation and filing a breeze.

Source: www.caseware.com

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