Tax & Audit Season Tips for Tax and Accounting Firms
Prepare for your busiest season with a business line of credit from Citizens Bank
For accountants and tax professionals, January through April is the busiest time of the year, with many employees working 60 hour weeks to get through all the required submissions by April 14. If you own a small firm you know that tax and auditing season can put a strain on your cash flow if you're not otherwise prepared. Whether you need to hire and train seasonal employees, upgrade technology and software, or balance accounts receivable, a business line of credit can help. Check out the tips below to better manage the busy season for your business and speak to a Business Banker to obtain the financing you need to be prepared.
Use a business line of credit to cover staffing needs in the busy season
To prepare for the busy season you likely plan on hiring seasonal employees to help manage the workload. This process should start as early as November to ensure your new hires are trained in time for tax and audit season in January. Often, many tax and accounting firms hire back the same temps they used in previous years, but you may still need to provide training to ensure they are up to date on the current tax code. As you will be hiring employees before you have generated the revenue to pay for them, a business line of credit can help cover the cost of salaries and benefits for these short-term or new hires.
Remember that you will likely need more than just tax preparers or additional auditors - you'll also need help around the office, especially if you have multiple locations. When hiring seasonal employees consider your need for office leaders, client services professionals, administrative assistants and professionals to train your new hires. Also consider if you will be using this time to hire full time employees for the coming year or simply get what you need to cover the current workload.
Use a business loan to replace technology and software before or after tax season
For most accounting and tax firms, May through December is significantly less busy. While you may use this time to give employees more time off or at least a more flexible schedule, you can also use it to prepare for next year's busy season. Use a business loan to make leasehold improvements to a property that needs renovations or purchase the latest computers and software complete with new tax considerations. Then, when busy season rolls around you'll have a bright new office space and the equipment your employees need to do their jobs more efficiently. If making leasehold improvements, consider creating a lounge or recreational space for your employees. Twelve- to fifteen-hour days can take their toll on employee morale, but having a space to relax or a free gym in the office can make things easier.
Look for other ways to improve productivity during audit season
While a business line of credit can help you make needed purchases and improve your short-term cash flow, it's important to look for other areas of improvement in your processes that will boost your profits and productivity. Consider these tips for tax and audit season:
- Shift your focus to more profitable clients. It may be difficult, but if you have clients you're spending a lot of time on but aren't earning a large return from, it may be time to re-evaluate your portfolio.
- Ask clients to provide year-end information in January. The faster you can obtain information from your clients, the faster you can process their returns, increasing your productivity and profitability.
- Decrease work in process inventory. Client work that sits unfinished is your least profitable asset. Try to adjust schedules so that your employees can go through a client's return from start to finish. Set a precedent of frequently contacting clients to obtain missing information until work is done.
- Reduce receivables by billing when client work is delivered. When returns are filed or audits are delivered, send the bill at the same time to improve the likelihood of a quick payment turnaround.
- Increase marketing efforts. While it will likely mean an additional outlay of cash up front, increasing your marketing spend can bring you more and better qualified customers, but it's important to start advertising long before tax or audit season approaches.
- Have fun. From happy hours and free meals to team events and flexible off-season working hours, look for ways to boost morale through employee rewards.
Obtain a business line of credit before you need it
Cover the cost of hiring and training new workers, updating software, advertising and more with a business line of credit from Citizens Bank. Even if you don't need the line of credit now, it can be beneficial to apply before you need it to have funds on hand for unexpected expenses during tax or audit season. To learn more about how a business line of credit can help your accounting firm or our Professionals First program, speak to a Business Banker today. They can help you find the right cash management tools and financing solutions for your needs.