The accounting process has long been seen as a lonely practice, where a long-suffering, caffeine-fueled worker toils, sorting through a shoebox full of crumpled receipts and messy statements. But many accountants and their practices are adopting efficient systems and technologies that take the drudgery out of data entry and allow their clients to be part of the process. These practices streamline workflow, educate the client about their own financial affairs, and provide more accurate reporting. The accountant no longer has to endure a busy and disorganized tax season. At the heart of these practices is an overhaul of the accountant-client relationship that calls for increased communication.

Set up an organized bookkeeping system that keeps data in order

The majority of accountants handle bookkeeping tasks for specific clients throughout the year. When tax season rolls around and the rest of their client portfolio has to file their taxes, they are thrown into a state of chaos. They are forced to sift through and make sense of a year of statements, receipts and uploaded documents. Trying to keep up with the demands of their wallet, they work 14 hour days until the tax filing deadline. It’s an inefficient way of doing business. Accountants can get organized by setting up a secure system where their clients can easily upload documents and accountants can access them. Customers lose patience and confidence when records they have provided throughout the year have to be resubmitted due to poor organization. By adopting a solid accounting system that delivers value, accountants will navigate tax season without the laborious hassle of waiting for clients to provide the relevant documents and statements they need to file their taxes accurately. .

Adopt efficient technologies to reduce manual workflows

While burnout isn’t new to the accounting industry, the ‘big quit’, spurred by the Covid-19 pandemic, has increased turnover in the industry. The lockdown landed in the middle of tax season, extending the usual 10 weeks to 10 months. This has taken its toll on the industry, exacerbating an already high turnover rate. Businesses interested in survival have embraced automated accounting software that has eliminated the need for most manual workflows. Statement collection, data entry, reconciliation, and accounting reporting workflows have been automated, keeping businesses running. With these systems in place, customers automatically receive statement requests. Smart technologies then extract the data and enter it into the general ledger, helping the accountant avoid the data entry part of the general ledger altogether. Data is delivered in real time, allowing accountants to provide their clients with accurate reports and tax returns without the hassle.

Use accrual accounting with the option to switch to cash accounting

Businesses choose to file on an accrual or cash basis in their initially filed return. Accrual accounting is a method in which income and expenses are recorded whether the money has been received or paid. Cash accounting records money only when it is actually received or paid. To get a more realistic view of a company’s current financial position, a company may choose to operate on an accrual basis throughout the year, but report its taxes in cash to avoid pay taxes on amounts not yet received. Performing accrual accounting gives business owners a longer-term view of revenue and expenses over a given period. Additionally, account payable balances can reduce taxable income when taxes are filed. However, reporting taxes on the accrual basis might not make sense; accounts receivable payments may make the business appear profitable, when in reality it may have low balances or empty accounts. With the ability to switch to a cash method of accounting when filing taxes, accountants can significantly reduce the amount of taxes a business could pay if filed on the accrual basis.

Review customer accounts on a monthly basis

A year of bank statements is no fun to sort through. Multiply that by 100 customers or more, and you have a nightmare scenario. Get in the habit of asking for statements and receipts from customers on a monthly basis. This helps accountants avoid the painful request for a year of statements during tax season. Instead, the repository will be transparent and access to the necessary data will be instantaneous. Workflow will not be interrupted and taxes will be filed in a timely manner. This process can also help the client understand relevant expenses to pay attention to throughout the year.

Set clear expectations with customers and have open communication

The accountant-client relationship should be a two-way street, although most clients don’t realize that. At the start of a new client relationship, set clear expectations about how to achieve favorable results. Prompt responses, document submissions and general adherence to the accountant’s process should be expected from the client or the system will fail. This strengthens the client-accountant relationship and defines the boundaries of the roles and responsibilities of both the accountant and the client. Consider meeting with more complex or high-value clients on a monthly basis. This builds trust around the process and gives clients a clear picture of where their business stands. Additionally, when a customer can see a real-time overview of their accounts, it allows them to make decisions that grow their business faster.

The accounting industry is undergoing rapid change, with much of the workforce retiring and barriers to entry rising. New and efficient technologies are adopted. These allow the accountant to focus on the client relationship while providing accurate reports and tax returns at the end of the year. Ultimately, what matters most is the ability to develop strong working relationships with clients and educate them on the accounting process. This way, accurate bookkeeping and tax filing can be a more streamlined process.

This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.

Author Information

sugam pandey is the co-founder and CTO of Docyt, an AI-based accounting automation software platform.

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