Tax Preparation Outsourcing: What You Need To Know

Tax preparation outsourcing services can help public accounting firms of all sizes. These firms cut costs by up to 60 percent by supplementing in-house staff with highly trained onshore and offshore tax professionals. With Outsourcing, firms can:

• Increase morale and productivity by reducing long work hours and weekend staffing requirements.
• Reduce or eliminate peak season overtime costs.
• Refocus staff on higher-value tasks.
• Convert the variable cost of tax preparation to a fixed cost.
• Lead to faster turnaround times on returns because of time zone differences.
• Improve document management processes.

Which returns should you outsource?

When considering a Tax Preparation Outsourcing solution, you need to have a strategic plan for deciding which returns you should outsource. Some questions to consider are: 

• What types of returns are the most profitable?
• Do complex returns require too much manual preparation, forcing you to focus less on higher-value services?
• Are unresponsive clients causing a bottleneck in your office?
• Are you charging enough for certain services? 

Everything from fees charged to non-billable hours all count when time is limited. Determine which returns and services can generate the most profit in-house, and consider outsourcing other tax prep work so that you can focus on those activities. 

Some Firms are Utilizing Outsourcing Services to Great Benefit

Given increased client demands for tax planning and the well-known stress and time constraints of tax season, outsourcing tax preparation is a smart option for tax and accounting firms of all sizes. Here’s what firms are saying about Xpitax Tax Outsourcing.

“I’d describe the quality of work from outsourcing as superior to first year, second year preparers, and especially people who’ve been putting in 60 or 70 hours because people just get exhausted… Outsourcing just took a lot of the pressure off the preparers, and we were able to get them some relief. And I think they really appreciated it.” – Mary Beth O’Mahoney, Schulman Lobel, LLP

“We looked at is just a way to supplement the data input… Right off the bat, within 24 hours, usually, we’re able to have a pretty good list of what’s missing from the return. So that has helped us get back to clients faster, get a head start on getting the information that’s missing, so we can do our jobs and be more advisors instead of focusing so much on the data entry.” – Jen Sieczkowski, ALL CPAs

“This year we primarily did a lot of the small 1040s and 1041s. We did a few larger ones along the way, but the real goal of it was to relieve the pressure of some of those smaller ones that aren’t necessarily our bread basket anymore but ones that you do for clients that you’ve had a long time or for family members. It’s hard to staff all of those smaller jobs.” – Harvey Susnick, Berdon, LLP

“It’s helped us with workload compression… We haven’t had to hire additional staff during tax season and then figure out what to do with them afterwards. And it just makes our deadlines so much easier.” – Gregg Kaufman, Waypoint Solutions

Get started

Find out how Tax Preparation Outsourcing can help you get through tax season. Watch our webinar, “Getting Ready for Tax Season” to learn more about Xpitax Tax Outsourcing.