Tax office operations
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Best practices for independent tax businesses.
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Tax office operations
- 1. Tax Office Operations Best Practices of Successful Independent Tax Firms
- 3. Systematic Operating Methods Policies & Procedures Personnel Policies
- 4. Company Philosophy • Mission & Guiding Principles • Delivering Client Value • Image / Professionalism • Productivity / Efficiency • Confidentiality • Integrity • Quality • Creativity • Teamwork • Communication • Employee Growth • Community Service
- 5. Personnel Policies • Honesty • Confidentiality • Substance Abuse • Sexual Harassment • Authorized Expenses • Solicitations • Dress Code • Personal Phone Calls • Internet Policies
- 6. Recruiting Tax Preparers • Shortage of Tax Preparers – Preparer Regulations – Preparers Retiring • Recruiting Tax Preparers – Homemakers with young children – Early retirees – Other prospects • Training New Tax Preparers – Operating a Tax School – Online Tax Course
- 7. Hiring and Scheduling • Hiring Tax Preparers – Applicant Screening – Employment Application – W-4, I-9 • Employment Agreement – Non-compete provision – Non-solicitation provision – Confidentiality provision • Scheduling Tax Preparers – Minimize “dead time” – Monitor productivity
- 8. Tax Preparer Training • Continuing Education – Tax law updates – Advanced courses – Small Business courses • Pre-Work Training – Policies & Procedures – Customer Service • On-the-Job Training – Buddy System • Secret Shoppers
- 9. Make Employees Aware of Marketing Programs • Signage • Guarantee • Discounts • Group Tax Service • Media Advertising • Internet Advertising • Online Directories • Publicity / PR • Promotions • Client Newsletters • Direct Mail (e.g., Newcomers) • Recording Sources of New Clients
- 11. Employee Sales Efforts • Business Cards • Calling Prior Clients • Keeping Signs On • Visiting Neighboring Employers • Attending Networking Events • Community Service • Speakers Bureau • Telephone Responses • Refer-A-Friend • Tax School Student Referrals
- 12. Tax Office Policies • Telephone Answering • Pricing Philosophy • Price Inquiries • Tax Information • Client Screening • Office Hours • Weather Closings • Client Complaints • Refunds • Gift Certificates
- 13. • Payroll Procedures • Daily Reports • Supply Requisitions • Asset Requisitions • Work Stations • Payment Methods • Bank Deposits • Credit Card Processing Administrative Procedures
- 14. Tax Preparation Procedures • Tax Associates’ Duties • Tax Information / References • Employee Work Schedules • Appointment Procedures • Interviewing Procedures • IRS Due Diligence • Drop-off Return Procedures • Appointment Procedures • Checking Tax Returns • Taking Turns – “Stacking” • Personal & Relative Tax Returns
- 15. Tax Prep. Procedures (Cont.) • Out of State Returns • Incomplete Returns • Processing Returns • Client Information • New Client Sources • Errors / Corrections • Client Folder Setup • Copying / Scanning • Missing Information • Tax Preparer Record
- 16. Office Hours and Staffing • Evenings & Weekends • Holidays • Overtime Policy • Receptionists & Office Assistants • Office List • Employee Roster
- 17. Tax Office Work Flow Appointment Interview Source Documents Tax Preparation Checking and Review Process Tax Return Exit Interview Electronic Filing Communication
- 18. Tax Preparation Fees • Schedule of Charges – Tax Preparation – E-Filing with Tax Preparation - Free – E-Filing Self-prepared Returns? – Bank Application • Time Charges • Discounts • Price Increases • Satisfaction Guarantee
- 19. E-Filing / Bank Products • E-filing Procedure • Refund Anticipation Loans (RALs) • Refund Anticipation Checks (RACs) • Stored Value Cards • Direct Deposit • What Goes to IRS? • Proof of Account • Self-Prepared Returns • Taxpayer Disclosures & Info. • IRS Due Diligence • Fraud Warning Signs • Glossary of EF Terms • Advantages of E-File – Fast Refund – More Accurate – More Secure – Lower Cost – Proof of Filing – Balance Due Budgeting
- 20. Employee Compensation • Tax Preparers – Base Pay Rate – Bonus Compensation – Experience/Professional Attainment Pay – Office Bonus Pool • Office Managers – Office Override – Transmitting • Receptionists & Assistants • Employee Benefits
- 21. Employment Agreements • Employment Term & Hours • Tax Preparer Duties – Client Interviewing & Tax Preparation – Checking & Processing Tax Returns • Restrictive Contract Provisions – Non-Compete – No Solicitation – Confidentiality • Office Manager Addendum & Duties – Scheduling – Transmitting – Quality Control – Client Service – Personnel Issues
- 22. Technology • Computer Equipment – Used PCs – Dual monitors – Scanners • Computer Systems – Networks (LAN, WAN) • Communication – Internet Service – VoIP Phones • Virtual Tax Service
- 23. Tax Preparation Software • Functionality – All states – Corporate returns – Bank products • Limitations – Stability – Exporting data • Support • Change Vendors? – Training, learning curve – Poor support – Errors, lost data, downtime, e-filing glitches – Cost
- 24. Quality Control • Checking Tax Returns • IRS Due Diligence – Training • Client Service – Professionalism – Tax Planning • Secret Shopper – Checklist Report – Pay in Cash
- 25. Summary • Goal: Level the Playing Field • Use Best Practices • Provide Tax Preparer Training • Systematic Operations • Operations Manual • Policies & Procedures • Schedule of Charges • E-File / Bank Products • Employee Awareness of Marketing • Personnel Policies • Employee Compensation • Employment Agreements
- 26. Contact Information • Chuck McCabe • 1-800-984-1040 • cmccabe@peoplestax.com • www.TheIncomeTaxSchool.com
Editor's Notes
- What does it take to operate professionally and consistently provide excellent service to deliver true value to your clients and ensure the growth and profitability of your tax business?
- Developing systematic operating methods is one of the key principles of business success that was conveyed by Michael Gerber in The E-Myth Revisited to more than 2 million readers.
- The key to operating systematically is to develop policies and procedures and put them in writing to be used as training tools and reference manuals.
- You should only hire people who wholeheartedly agree with your company philosophy or they will not be long-term employees and will cost your business time and money. Hiring and training a new employee is very expensive.
- The most important personnel policies such as those listed here should be included in your Policies and Procedures Manual and covered in your pre-work training. You should consider having a much more detailed personnel manual with policies for both year-round and seasonal employees.
- Don’t wait until January to recruit new tax preparers to adequately staff your office(s). Shortages of qualified tax preparers is anticipated. The best practice is to operate a tax school to recruit and train new tax preparers
- Properly interviewing and screening applicants is critical to avoid bad hires. An employment agreement with provisions to prevent tax preparers from taking your clients if they leave is essential. Properly scheduling tax preparers will minimize payroll expense while ensuring good client service.
- Once you have chosen the right people to staff your office you need to make sure that they are properly trained. Tax training alone is not enough. You need to be sure that each employee understands and is aware of the correct policies and procedures to be followed in your office. Consistency is extremely important. Customer service should also be covered thoroughly during pre-work training.
- Employees need to know about promotions and special offers so they will be prepared to honor discounts and promises made to clients and prospects. This is an example of retail storefront tax office signage. Illuminated signs must be kept on.
- Our new business model is to operate in professional office park with private offices. Note that the private offices have windows to enable tax preparers to see clients entering and waiting and clients to see that preparers are helping someone while they wait.
- All employees should be constantly focused on bringing in new clients, retaining existing clients and generating referrals. Your employees should be members of your sales team promoting your tax firm at every opportunity both during work hours and when interacting with friends, relatives and acquaintances in the community.
- Employees should be trained to perform their duties “your way” and must be aware of your tax office policies and procedures in order to implement them correctly.
- Employees should be trained and monitored in the proper procedures to ensure efficiency and consistency. Timely daily reporting and daily bank must be adhered to without exception.
- Consistently preparing accurate tax returns and providing quality client service requires strict adherence to predetermined tax preparation procedures. Deviation should not be tolerated to ensure efficiency and provide value to clients.
- Every potential client situation should be anticipated and a procedure prescribed to handle each potential situation. On-the-job training and retraining is necessary to maintain consistency in implementing tax preparation procedures.
- Offices must be open and properly staffed during all advertised office hours. Your staff should be adequate to provide quality client service with minimal waiting time, while not over-staffing to prevent overdraw or inadequate employee earnings. Receptionists should be used to serve clients, not to do the work of tax preparers.
- The chart illustrates the steps involved in preparing a tax return. The business owner’s challenge is to identify areas that can be eliminated or improved in order to increase the effectiveness of the process and improve the customer experience at the same time. Now is the time to evaluate the execution of each of these steps in your office during the past tax season. Determine which processes need improvement Meet with your staff ( preparers and support staff) and discuss these processes as soon as possible. Determine areas where the processes can be improved.
- Pricing of tax returns where multiple tax preparers are employedshould be based on the work involved (e.g., forms prepared), not the time taken. A standard schedule of charges is recommended and fees should be calculated by the tax software. Time charges for excess compiling tax information can be added. A Satisfaction Guarantee generates far more revenue than it may cost. Discounts should not be arbitrary. Price increases in April are more palatable to clients.
- Detailed written e-filing and bank product procedures are essential for employee training and reference.
- We pay a minimal draw against commission to minimize over-draw by slow tax preparers. Experienced, efficient preparers could be paid a higher hourly wage plus a smaller commission. Our office managers are paid a salary and a bonus based on personal tax preparation production and 1% of office revenue. A larger percentage of growth in office revenue can also be paid.
- Employment agreements for tax preparers are essential to prevent preparers who leave from taking your clients with them. A detailed job description should be attached as an exhibit.
- Determine your technology needs for the next season. Discuss these items with the staff and plan now for the financing, planning ,installation and training needs for new equipment and/or systems.
- Problems this year. IRS MEF?? Considering a change, test now!!!! Don’t wait. Be sure to consider all implications of a change. Do you really need to change or was training part of the issue.
- Anyone can make a mistake, no matter how qualified. Therefore, we require that every return is checked by a preparer other than the one who prepared the return. Training and monitoring of IRS due diligence and client service is essential. Errors result in poor client retention and costly penalties and interest expenses.
- Practice the principles outlined in the E-Myth Revisited. Operate systematically, working on your business and not in it. Delegate responsibility to subordinates. To grow your business and create value, your goal should be to make yourself dispensable.