It’s doubtful that anyone could have predicted what the 2019 personal tax season would be like. The arrival of COVID-19 meant that accountants had to face many challenges they had never dealt with before, such as the need to safeguard the health and safety of their staff.
Most notable for the tax season in 2020, was the dramatic move by most Canadian accounting firms to a remote working model in response to the pandemic.
So, how did our country’s accounting practitioners handle this during their busiest time of the year on top of their usual challenges related to staffing, client management and service, workflow management and technology?
Wolters Kluwer took the opportunity to find the answers. We conducted an online post-tax-season survey that we administered across Canada - with 15% of respondents coming from medium-large firms (6 or more full-time employees) and the remaining 85% from employees of small organizations (1-5 full-time employees).
And what did we discover? Quite a bit of valuable information you will undoubtedly find useful.
Working remotely meant working effectively.
The pandemic changed the way Canadians worked and lived. Accounting firms needed to operate in an entirely new way to protect their clients and staff and prevent the spread of the highly contagious Coronavirus.
Working remotely became the norm, with staff required to make the necessary adjustments so that they could accurately prepare and track returns and collaborate and exchange documents with the same efficiency they did in prior years.
Astoundingly, 77% of accountants surveyed said that they were easily able to adapt to work-from-home requirements. Worth highlighting, is that sole practitioners (85%) were able to embrace this change far more easily than small and medium-large firms (69%). Anecdotally, this may be because sole proprietors are more likely to make it easier for their employees to work from home by deploying cloud-based compliance software and other tools such as remote meeting applications.
Tax preparation was performed effectively this year despite the change in conditions, with only 13% believing that tax compliance software made it difficult to prepare tax returns while they were working remotely.
It would be natural to think that the new working model might result in all kinds of difficulties when it comes to sharing documents. Fortunately, this was not the case. In fact, our survey revealed that 64% of our respondents reduced the time spent with clients by sharing documents with them online. On the staff side, 69% agreed that employees were able to collaborate effectively while working remotely. What’s more, it is believed that the situation might improve even further through the implementation of a document management system used in conjunction with a client portal.
Despite the new remote working model, 72% believed that their staff effectively tracked return status and workflow, something that is important in any given year.
Overall, it appears that employees were easily able to adjust to the work-from-home paradigm. This is quite significant, given that many firms are now considering long-term plans that will increase the amount of remote work that is performed.
Finding and retaining good talent continues to be a priority.
So many factors can impact staff performance. Employees desire flexibility, opportunities for advancement and want to feel engaged, respected and motivated at work.
How are companies doing on these dimensions? Let’s take a look.
Our survey showed that 31% believe that their staff performed unnecessary manual data entry, a figure that is almost identical to what we found last year. It indicates that quite a few employees continue to do tedious, time-consuming and demotivating work that often results in errors (41% of all respondents said that tax season errors were avoidable). One way to solve this, is by using tools and services that auto-populate a tax return, something that more and more firms are starting to do. (Particularly the 93% of medium-large firms who used CRA’s Auto-fill My Return last tax season.)
The desire for workplace flexibility often involves the ability to work differently than in the traditional in-office workplace prototype. Close to 2/3 of those surveyed found their staff could easily work remotely, with an opportunity to move this percentage even higher with the use of cloud-based tax compliance applications and practice management tools that ensure resources are being allocated effectively and bottlenecks are avoided.
A chronically overworked staff is an unhappy staff. This year’s shift to a remote working model meant that employees were able to reduce their travel time, thereby freeing up more time to work on returns. It is no wonder that 75% reported their staff worked the appropriate number of hours.
Outsourcing continued to be something many firms relied on, with 30% overall hiring part-time staff or outsourcing to meet demand and reduce the stress on full-timers. Hiring outsiders, precipitates the need to have consistent processes in place. A centralized document management system would make things easier by giving part-timers easy access to information, reducing their reliance on full-time staff to give them what they need.
Many of the past client management and servicing issues are still issues.
Managing clients the right way during tax season is critical. Yet firms continue to grapple with this.
Many still find they have to remind clients about missing information (in 73% of all cases). However, help is on the way in the form of technologies such as digital signature software and portals.
Most firms (75%) are happy with how they store information. However, a centralized client database that helps you store and retrieve information would push this figure even higher.
And how well were the firms participating in our survey able to serve their clients? According to our findings, the answer is, quite well. Most firms (68%) believed they were well-staffed. This number is lower for medium-large firms who would benefit by implementing practice management tools that would make it easy to take care of jobs and billing, remove workflow bottlenecks and deploy staff in the best way possible.
Firms are making workflow management work.
An efficient workflow is a must. Every firm must do whatever it can to achieve the ultimate: a smooth workflow where documents are shared effectively, information is easily obtained from clients and staff are able to collaborate to the max.
Most firms (68%) reported that their automated workflow worked well, but many medium-large firms (48%) index lower in this regard. Similarly, there are quite a few firms (31%) who want to track their clients’ jobs and billing better. Practice management software will help these firms move forward with better workflow assessment and control. It will also help them improve their pace of workflow, something that 68% of respondents are currently satisfied with.
Another important finding concerned access to information - 63% of respondents found it easy to get answers and explanations on tax topics they were not familiar with. And 45% needed to outsource complex tax questions to a specialist.
All this illustrates the need for many firms to have a comprehensive research tool on hand such as CCH AnswerConnect that puts the tax information one needs at their fingertips.
Technology is moving things forward.
Having the right technology on-hand will help you reap so many advantages. Among other things, it can boost productivity, reduce errors, provide more accurate reporting and even help you improve your client service.
Good news: 73% of those surveyed believed they had all the technology they required this tax season.
Related to this, technology changed the way work was done for 81% of those surveyed. Looking at this more granularly, 74% happily reported that despite this year’s remote working norm, client service levels remained the same.
Here is something else to consider: technology made it easier for some firms to keep good talent, offering them the chance to do less mundane tasks and work from anywhere.
But there still exists some gaps in this area. Technology could still be used to get quick answers to accurate tax information, rather than using unvalidated search engines such as Google (55% used search engines like this for tax information) that place your reputation on the line.
Discover even more in-depth information on the 2020 Tax Season.
What we’ve presented, is simply a topline analysis of what we discovered in our 2020 tax season challenges study that was based on research conducted that assessed accounting practitioners’ experiences. There’s so much more to find out about. And you can read the full report right now!