“Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” ~ Benjamin Franklin
Let’s face it. No one likes taxes. They don’t like tax season and they don’t like paying them. But as the saying goes, it’s the one thing that’s certain along with death (another thing no one likes).
If tax season is a pain to entrepreneurs, imagine what it’s like for tax preparers. There are many pitfalls that consistently frustrate tax preparers, causing unnecessary hurdles in the preparation process. From inaccurate data entry to disorganized documentation and the notorious last-minute rush, these issues can impede efficient tax preparation.
So how can bookkeepers make tax preparers’ lives easier?
Bookkeepers stand at the forefront of mitigating these challenges by implementing proactive strategies and aiding clients in avoiding these common tax preparer pet peeves.
Here are 3 common issues that frustrate tax preparers year after year and the actions bookkeepers can take to make tax season easier for them and their clients:
- Inaccurate or Incorrect Data Entry
Accurate data entry serves as the cornerstone of sound financial records. Errors in data entry not only disrupt the integrity of financial statements but also pose significant challenges during tax preparation. Incorrectly recorded numbers, misplaced decimals, or incorrect categorizations can lead to discrepancies that confuse tax preparers. These errors demand additional time and effort to rectify, potentially delaying the tax filing process and causing frustration for both the preparer and the client.
How Bookkeepers Can Help:
Prioritize Accuracy in Data Entry
Ensuring correctness in data entry is pivotal. Every keystroke matters in maintaining error-free financial records. By diligently double-checking and validating entries, you contribute to the integrity of financial data. Accurate data entry not only streamlines tax preparation but also mitigates discrepancies that could puzzle tax preparers. Your meticulousness is the cornerstone of a smooth tax filing process.
Optimize Software Accuracy
Mastering accounting software is key. Ensure your proficiency in using these tools to their fullest potential. By understanding and utilizing software functionalities adeptly, you minimize the chance of data entry errors. This proactive approach guarantees accurate financial records, smoothing the tax preparation process for both the client and the tax preparer.
Implement Validation Processes
Craft a validation system within your workflow to catch potential slip-ups. Consider creating a checklist or a step-by-step verification process to review entries. Additionally, set up alerts or markers for any inconsistencies you commonly encounter. By implementing these personalized error-checking measures, you take charge of ensuring data accuracy, smoothing out the tax preparation journey.
- Incomplete or Disorganized Documentation
Missing receipts, overlooked expenses, or scattered records make it challenging for tax preparers to gather comprehensive information for accurate filings. The absence of essential documents not only prolongs the tax preparation process but also raises the risk of inaccurate reporting.
How Bookkeepers Can Help:
Be Proactive in Gathering Documents
Initiate timely discussions with clients about what documents are essential for tax preparation and when they’re needed. Create a checklist outlining necessary paperwork and encourage clients to submit them promptly.
Implement Organizational Systems
Advise clients on setting up an organized system for record-keeping. Suggest using functionalities in accounting software that categorizes expenses, maintains receipts, and keeps track of income to streamline the process.
Conduct Regular Reviews
Make it a routine to periodically review your clients’ financial records throughout the year. These regular check-ins help pinpoint any discrepancies or missing information well in advance of tax season. Addressing these issues early allows ample time for rectification, minimizing last-minute rushes and ensuring accurate tax filings.
- Last-Minute Rush and Procrastination
The eleventh-hour rush before the tax deadline is a recurring headache for tax preparers. Clients scrambling to compile and submit their financial records at the last minute significantly increase the likelihood of errors and omissions. Procrastination leads to hurried, incomplete submissions, leaving little time for thorough review and correction.
How Bookkeepers Can Help:
Set Early Deadlines
Encourage clients to submit their financial information well before the tax deadline. Set internal deadlines ahead of the actual due date to ensure there’s sufficient time for review and correction. Conducting regular data checks throughout the year can ensure that most transactions are already categorized correctly and eliminating the need for major cleanup projects at year-end.
Offer Guidance on Time Management
Educate clients about the benefits of avoiding the last-minute rush. Explain how early submission reduces stress, prevents errors, and allows for a more thorough review of documents. Make sure that, as the bookkeeper, you are adhering to your own internal deadlines and completing client work in a timely manner. Your work product should never be the reason a client is late getting taxes prepared.
Provide Reminders and Follow-Ups
Send regular reminders to clients about upcoming deadlines and the importance of timely submission. Follow up with gentle nudges as deadlines approach to encourage compliance. You can automate this process by writing emails ahead of time and scheduling them to send set times or using software like Dubsado, that allows you to create “canned” emails and create a workflow to automatically send emails to clients on the date you select.
Navigating tax season smoothly requires a collaborative effort between the client, the bookkeeper and the tax preparer. By addressing these common tax preparer frustrations through proactive measures and effective communication, bookkeepers can significantly increase the chances of a more “pleasant” tax preparation process for everyone involved.