30 days may feel like a long duration but once you see some of the tasks that CPA firms must undertake during tax season, you will realize that this may not be the case.
They have tax returns pending review and many clients from whom they are yet to receive documentation. There are complex tax returns in need of research, some clients are waiting for their K-1s to arrive, while others are unresponsive to emails. Ironically, October 15 keeps drawing closer.
For CPA firms that handle late tax returns, the final 30 days are more than just a countdown. It is time to assess their workflow and communication.
As you may have already guessed, those CPA firms that get through this busy March-April season successfully are not necessarily those with the biggest staff. In fact, getting through the extension season requires a firm to understand the tasks that need priority attention, the existence of any barriers and when additional employees may be needed.
The question is what CPA firms can do in the remaining 30 days before October 15?
Who Needs to File by the October 15 Tax Deadline?
For individuals with approved extensions prior to this deadline, the date for filing personal income tax returns is October 15.
However, a distinction needs to be made when considering extensions to filing taxes versus extensions to paying taxes. Even if an individual requests an extension to file, it does not mean that the person has been granted an extension to pay taxes owed. Payments need to be made by the date indicated in the tax regulations to avoid incurring additional penalties or interest.
For a CPA firm, these points make a significant difference. It is necessary to recognize that being busy with preparing taxes means, among other things, that clients need clarification concerning their duties and the firm must ensure that the return has passed through the firm's system on time.
Therefore, October 15 cannot be regarded merely as a date on the tax calendar.
Start With a Complete Review of Outstanding Returns
Before speeding up the workflow, make sure everyone gets clarity on what they need to do.
You can begin by checking the state of each pending return. It is best to classify the returns into several categories, such as:
- Ready, awaiting final review
- In preparation
- Waiting for client
- Waiting for partner or manager review
- Complex, requiring more research
- At risk of missing the deadline
By knowing how busy the company is and the status of each return, the management will have full visibility. For example, while one return is waiting for one more document that can be solved with a short call to the client, another return, for example, a multi-state business return involving several entities, can take much longer to process.
Manual intervention can be kept to a minimum, and the goal is to properly classify each return and understand who is processing each of them and what to do next.
Identify Your High-Risk and Complex Returns
Different tax returns come with their own danger levels. Some tax returns can be prepared and filed quite fast or can come to the surface in any phase of the process.
Pay heed to tax returns related to:
- Partnerships and S corporations
- Several different business establishments
- Multi-state filing of taxes
- Foreign reporting duties
- Drastic changes from one year to another
- Complex nuances of deductions
- Absence or contradiction of records
- Clients who are always late in their responses
All the above-mentioned returns must be considered as red flags.
Find them early and allow enough time for preparation, checking, fixing, and approval.
The worst time to know that the tax return is to undergo some changes is October 14.
Stop Waiting for “One Last Document”
Every CPA firm is familiar with the expression: "I will send it tomorrow." Sometimes tomorrow turns into October 13. As a result, a tax return may remain incomplete simply because one of the following is missing: a K-1, brokerage statement, business activity, or corrected document. Due to this, follow up with your clients more samples than before during the last 30 days.
Before you start sending reminders to your clients, you need to track:
Client name → Missing Information → Date Requested → Follow-Up Date → Internal Deadline
More importantly, don't consider October 15 the deadline, and set it earlier.
Having an earlier internal deadline for collecting documents will give your team some time to prepare tax returns and finalize reviews. Even a quick call today may spare you from many unnecessary hours of work later.
Turn the Final 30 Days into a Countdown
When you look at 30 days in its entirety, it may seem like manageable time.
But when you see that only 10 working days are left, the situation appears totally different.
Splitting the month into small milestones will help CPA firms to bear the load without difficulties.
Days 30 to 21: Analyze and Organize Tasks
The first thing that should be done is to have a complete picture of the tasks that are to be performed.
- That involves going through all returns that are still not completed.
- You should define the most complicated and risky files.
- Collect all the instances of information that have been lost and are needed to finish the job.
- Communicate with the clients in case they delay giving the required information.
- Define the person who will be responsible for the return.
Days 20 to 11: Prepare the Returns
Now you need to shift the focus from defining the task to the process of doing it.
- Complete complicated returns that were started.
- Give answers to the outstanding questions.
- Move all completed returns to the reviewing stage.
- Accelerate the process of solving the blocked problems.
- Continue contacting the clients.
Days 10 -5: Review and Complete
At this point, quality control and preparation for filing should be the focus.
- Finish the review by partners and managers
- Address the notes from reviews
- Check federal and state laws
- Get any necessary signatures and approvals
- Prepare the returns for filing
Days 4 - 1: File, Monitor, and Respond
The last few days should be about execution – not figuring out what is missing.
- File everything
- Track e-files
- Solve rejected filings
- Resolve any final issues with clients
- Keep track of all filings
The deadline should be on October 15.
Protect Quality While the Deadline Gets Closer
Speed is of the essence once the deadline is set.
However, speed alone can have its drawbacks, which can be reworked.
A rushed job may lead to revisions, inquiries from clients, rejection of returns, or unnecessary tension for reviewers.
Before the filing takes place, CPAs need to have a consistent review process in place with respect to:
- Details regarding taxpayer and entity,
- Income and spendings,
- Supporting schedules,
- The comparison with previous year returns,
- Advance payments of taxes,
- Federal and state requirements,
- Forms and disclosures required,
- Signatures and authorizations for filing.
An organized review process can help the members of your team to perform their work more quickly.
In fact, this process usually leads to the opposite in practice.
Uncovering an issue during the review is much easier than fixing it after filing.
Don't Forget What Happens After “File”
The process of submitting may resemble the point of completion.
However, it could indicate that the work is not over yet.
Any CPA company must follow up about the e-file confirmations and rejected filings. While facing the deadline pressure, one should understand that rejected returns should become a priority in the absence of possibility to fix and re-submit them on time.
The straightforward status cycle will go as:
Prepared → Reviewed → Signed → Filed → Accepted.
In this case, the managers get a better overall view of what they have achieved.
The fact is that “filed” is not identical to “accepted”.
Tracking the result is equally important as guiding the return.
When the Workload Is Bigger Than the Team
The extension season has an uncomfortable truth:
Productivity isn't always the actual issue; capacity may be.
It's possible for your team to be efficient and organized in ways that help them perform well, yet they can still have more work than there are hours available to complete it.
This is when the help can come in handy.
Technological solutions for your firm to use include workflow management systems, online portals for storing documents, automated reminders, and tax preparation solutions, which help reduce routine processes and improve efficiency in a firm.
However, technology alone is not enough.
When the firm has limited capacity, outsourcing can help solve this issue.
For example, Xconcile's outsourced tax preparation services can support CPA firms with tax preparation work, helping internal professionals focus on review, client communication, and complex tax matters.
Similarly, Xconcile's outsourced accounting and bookkeeping services can help firms manage accounting tasks such as bookkeeping and reconciliations when internal teams are already stretched.
The objective isn't to outsource responsibility.
It's to make sure your most experienced professionals aren't spending valuable time buried in repetitive work when they could be focused on reviewing, advising, and serving clients.
Build an “Are We Really Ready?” Checklist
Before entering the final week, every CPA firm should be able to answer a few basic questions.
Workload
- Have we identified every outstanding return?
- Does every return have an owner?
- Have we identified high-risk files?
Client Communication
- Have all missing documents been requested?
- Are delayed clients being followed up with?
- Do we have internal document deadlines?
Preparation & Review
- Are complex returns being completed early?
- Are review responsibilities assigned?
- Are review notes being resolved promptly?
Filing
- Are signatures and authorizations complete?
- Have federal and state requirements been verified?
- Are e-file acknowledgments being monitored?
- Do we have a process for rejected returns?
Capacity
- Does the team have enough time to complete the remaining work?
- If not, do we have additional support available?
If the answer to some of these questions is “not yet,” that's not a reason to panic.
It's a reason to act now.
October 15 Should Be the Finish Line, Not the Fire Drill
The extension season imparts one lesson to CPA firms:
Deadlines are not generally the cause of chaos, but disorganized work is.
The last month presents a chance to avoid chaos.
- Be aware of your workload.
- Identify the bottlenecks.
- Contact customers.
- Process complex exchanges.
- Safeguard the review stage.
- Monitor every filing.
And if your internal capacity is starting to become limited, you should seek help before the pressure rises.
With proper workflow, technology, and help, October 15 can be just another day.
Need Additional Capacity Before October 15?
If your CPA firm is heading into the final stretch with more returns than your team can comfortably handle, Xconcile's outsourced tax preparation support can help provide additional preparation capacity while fitting into your existing workflow.
Talk to Xconcile to explore how outsourced tax and accounting support can help your firm manage the final stretch with greater confidence.
