How to Strategically Reflect on Tax Season and Make Improvements Next Year

Now that you have had some rest from tax season, how did it go? Taking some time to reflect on what went well – and what did not go well – can have a major impact on your business and what you need to implement in the future to create a better, more efficient and even more profitable tax practice.

Here are six suggestions for how to approach this analysis:

#1: Examine important changes for tax year 2018. There are three areas in particular that I believe are important to note:

• Drivers’ licenses: Several states have added a requirement for taxpayers’ drivers’ license information in tax returns, with more to come next year. It’s time to set up a process to manage this information. When do you want to ask clients for their numbers? Do you do it before tax season or in the middle of it? Should it be a part of the onboarding process? Do you even have an onboarding process? This isn’t like a typical tax document; you’ll need to make a copy or have the client take a picture of the license since they will need to keep it on hand. What does that workflow look like for you, and how can you save time?
• New tax law: The Tax Cuts and Jobs Act is going to completely change the game for many taxpayers. Itemized deductions are changing, how we calculate business tax and the new Qualified Business Income provision will all change the tax preparation landscape. While you can go to training or simply research the changes, no one is going to do a class on how this affects your client base. This summer, reflect on the returns you do and how they might change next year. Does your pricing need to change? Will returns take longer next year, and do you need to warn clients of price moves from that? Most taxpayers are getting a tax reduction, but at the expense of more work for you. Make sure you profit from it.
• More independent contractors. I can see how the new tax law may create an explosion of new independent contractors, or at least people wanting to be contractors, because of the new pass-through deduction versus being an employee. So, make sure you review the tests the IRS has laid out to determine who is a contractor and who is an employee.

#2: Reflect on three of the most stressful situations you remember during busy season. Write them down. Next, ask yourself, “What led up to these situations?” Was it poor client performance (the client did not follow instructions), or is there something in your process that could have been modified to avoid these events? DO NOT just chalk them up to one-time events. These are the best opportunities to improve your process.

#3: If you have staff, write down three ways they were very successful and three things that need improvement. Make sure you write down three of each. Then, schedule meetings with each staff member to go over both lists. Always start with the three success points, then move into the three things they need to work on. Offer to help them if they are not sure how to improve, and practice with your extended returns to make sure the staff is ready for the next tax season.

#4: Next, think about your tax software. For most of us, our software is a love/hate relationship, where there are things we just can’t imagine living without, and aspects we want to change or improve. Write these down, then consider if the changes that need to be made to the software outweigh the aspects you like. If so, you may need to take a look at new software options and see if there are solutions to your problems.

#5: Examine your marketing. Were you happy with the results of your marketing efforts? Was there a way to track the effectiveness? Did you do any marketing; do you want to? Now is the time to put a plan in place that will start right away and go all the way into next tax season. Referrals and word of mouth are great, but if you want more growth, you will need to explore other advertising and business building strategies. Use your down time to really dig into what you want to do. Keep it simple and keep it local, and make sure anything you do can be measured. If it can’t be measured, it is very difficult to analyze.

#6: Ask yourself, “Did this tax season make me happy?” This final one may be a little uncomfortable. As tax accountants, we are very analytical. If tax season made you happy, that’s great – and keep doing it. However, if the answer is “no” or “I’m not sure,” think about the “why.” Was it a certain client or a type of client? Was it one little issue or 10 big issues? Did you make as much money as you wanted? Were your clients as happy with the service as you want? Write down anything that comes to mind. This is the big picture work you should focus on and try and resolve. While we all must work and make money, keep in mind that life is too short to do something you don’t “mostly” like.

There is no right or wrong way to do your after-tax season reflection; just make sure you do it and always write things down. It is easy to forget day to day what you wanted to work on, but by continually improving our firms, we serve our clients, and ourselves, in more efficient, profitable ways.

One final note: In my firm, business clients are much more profitable than traditional 1040 clients, so do what you can to cast a wide net. 2018 could be your best year ever!

Editor’s note: This article was originally published on the Intuit® ProConnect™ Tax Pro Center on June 6, 2017, and was updated on April 27, 2018.