Spring and Fall are typically when an accounting firm’s gears are in full operation. The mid-season lulls, however, offer valuable opportunities beyond mere recuperation. These less intense periods are important windows that allow your tax firm to evaluate its performance and efficiency, and implement improvements that will not only prepare you better for next year’s peak seasons but pave the way for wider growth in general.
In this article, we’ll explore some of the more effective strategies available to tax firms and how platforms like Harness can help your practice realize its full operational potential.
Table of Contents
- Strategies to improve your tax firm’s efficiency
- The broader strategic advantages that technology brings to tax practices
- How tax firms can improve the client experience efficiently and effectively
- How Harness can help
- FAQs
Strategies to improve your tax firm’s efficiency
No matter how well your tax practice may have performed during the last tax season, it’s important to evaluate that performance objectively. Even if your firm made it through the peak season relatively unscathed, improving procedures where possible sets your practice up for growth as opposed to simply maintaining an operational status quo.
Aside from hiring more seasonal or full-time, there are a number of highly effective strategies tax firms can pursue to improve their operational performance.
Adopting OCR (Optical Character Recognition)
OCR is a powerful technology that significantly improves operational efficiency by automatically converting text from scanned documents, PDFs, and even images into machine-readable data. This removes the need for time-consuming and error-prone manual data entry of client information, and dramatically reduces processing times for tax documents.
Importantly, OCR isn’t a technology that will replace your team members. Instead, OCR is a tool that provides staff with more capacity and gives them the space to level up their skills. With your team able to spend less time on administrative tasks and more time on higher-value activities like strategic tax planning, OCR is a relatively quick and cost-effective way to drive tax firm growth. If your tax practice isn’t using OCR technology yet, you should make looking into it a priority.
Using offshore support teams
Given the skills shortage that currently plagues the domestic accounting sector, offshoring offers a compelling solution for tax firms looking to scale capacity quickly. The approach delivers a number of major benefits, including substantial cost savings on labor and access to a vast global talent pool of specialized skills.
That said, offshoring can present as many challenges as it does solutions. Language barriers and cultural differences can be a problem, as can maintaining consistent quality control and conducting smooth communication across time zones. Data security in these circumstances is another concern, with strict protocols and thorough due diligence required when selecting an offshore partner.
Addressing client, service, and pricing inefficiencies
Operational inefficiencies aren’t just about internal processes—they’re often rooted in the intrinsic structure of your client base and service offerings. Many tax firms find themselves stretched thin serving a high volume of low-value clients, performing basic compliance work without charging for the true value of their expertise. This results in your most valuable resource being consumed by tasks that don’t generate adequate revenue, limiting your capacity for growth.
Post-tax season gives you the breathing space needed to honestly assess if your client portfolio aligns with your firm’s broader goals. Is your firm attracting and retaining clients who value advisory services beyond basic tax preparation? Are your pricing structures reflecting the true value and complexity of the work you provide? Firms that deliver impartial answers to these kinds of questions can free themselves from constraints of operational inertia and tailor their services more meaningfully.
The broader strategic advantages that technology brings to tax practices
While technological solutions like the earlier mentioned, OCR, improve operational efficiency, tax firms can be hesitant to adopt new technologies, favoring instead the familiarity of their existing systems and procedures. Working with what you know is often seen as a solid strategy, perhaps understandably—however, it can be a false economy when it comes to technology.
Given that the general shift across all industries is toward digital systems, tax firms that stick to more traditional processes not only have to deal with unnecessary inefficiencies during tax season but run the risk of being left behind in a market where clients are increasingly tech-oriented.
Tax firms that adopt the right digital tools can build a more efficient, competitive, and client-centric operation year-round, with some the key technologies to consider including:
Cloud-based accounting platforms
These platforms provide “anytime, anywhere” access to key financial data, promoting easy and efficient collaboration among team members and their clients. With real-time updates making sure everyone is working with the same most current data, cloud-based platforms vastly improve accuracy and decision-making.
Document management systems
Secure cloud-based document management systems offer a centralized repository for all client files, ensuring easy searchability, version control, and reduced risk of lost or misplaced documents. Integrated client portals, such as those provided by Harness, provide secure and efficient document sharing that streamlines communication and improves the client experience.
Practice management tools
Practice management (PM) tools serve as central hubs, standardizing workflows and maintaining consistent client engagement from start to finish. Streamlining fragmented operational procedures, PM tools deliver accurate time tracking and effective project management, providing real-time visibility into resource allocation and project status. This granular data helps optimize tax firm workloads and offers the insights needed for better strategic decision-making.
AI and automation
Artificial intelligence (AI) and automation technologies are having a major impact on the tax industry. AI assists tax firms with predictive analytics, identifying potential audit risks or tax planning opportunities. In particular, AI-powered research tools help speed up the process of finding relevant tax information.
Meanwhile, automation is helping tax firms handle routine tasks like data entry, document sorting, and basic calculations, freeing up professionals for more complex and strategic work.
Data import/export management tools
Adopting tools that efficiently manage the import and export of data between different software systems is central to maintaining data integrity and reducing errors. These tools deliver smooth data flows, saving time and improving accuracy across a tax firm’s various platforms.
How tax firms can improve the client experience efficiently and effectively
As well as removing the bottlenecks that cause delays during tax season, it’s important to analyze client interactions and identify areas for improvement in the overall client experience. Satisfied clients are simply more likely to return and refer others, contributing directly to the firm’s growth.
While there are any number of steps that can be taken to improve the client experience, some of the more effective include:
Implementing Standard Operating Procedures (SOPs) for your most common tasks by providing consistent, high-quality service delivery across your team. SOPs also reduce the likelihood of errors and streamline operations in every client interaction.
Proactive communication is also another key factor here. Regularly updating clients on the progress of their returns during tax season and offering insights and advice during the rest of the year demonstrates client care as well as tax expertise. This is a combination that you can be sure your clients are looking for.
Tailoring advisory services to meet individual client needs, such as tax planning for the upcoming year or guidance on financial decisions, adds major value to your services and strengthens client loyalty in the process.
Client education is another worthy pursuit as it allows clients to better help themselves and reduces the operational demands on a firm. Providing clear and concise information about tax processes, required documentation, and potential tax-saving strategies can lead to smoother interactions and fewer last-minute requests.
Secure client portals are particularly valuable tools in this respect, allowing for smooth communication as well as document sharing, heightening convenience for all involved.
How Harness can help
At Harness, we have a two-fold approach to helping tax firms operate more efficiently. As a leading technology provider, our platform offers a suite of tools designed to improve workflows and encourage growth. Our user-friendly client portal, for example, streamlines document exchange and communication.
Complementing this is TaxAssist, our AI-driven data management tool. TaxAssist automates the extraction and organization of client financial information directly from documents, drastically reducing manual data entry, minimizing errors, and cutting the time needed to prepare tax returns.
Just as important as the technology at Harness are the people. Harness is a vibrant community of tax advisors. This network serves as a valuable resource where members can share insights, learn best practices, and gain support from peers facing similar challenges. By joining Harness, you gain access to a technology-driven, collaborative environment designed to help tax firms prosper and grow.
Discover how Harness can help your tax practice grow
Book a call with one of our team members.
FAQs
Some of the more common questions regarding tax practice efficiency include:
How can firms proactively leverage cloud technology and integrate AI with existing tax software to gain a competitive advantage in post-tax season strategic planning?
Firms should make use of cloud technology for accessible financial management and integrate AI directly into their tax software. This allows for automated data transformation, reducing manual tasks and human error. The freed-up valuable time enables a proactive approach to strategic planning, providing deeper insights and more sophisticated financial planning services, which strengthens client relationships and heightens overall technical expertise.
What advanced strategies can tax firms employ with project management tools and client communication to maximize efficiency and manage client expectations for multiple clients?
Implementing advanced project management tools is central to optimizing workflows, allowing firms to track progress across multiple clients and manage internal resources efficiently. By streamlining processes, time spent on administrative overhead is minimized. This allows for more focused, proactive client communication, setting realistic client expectations for the busy season, and transforming reactive client demands into strategic tasks.
How can analyzing client data and gathering feedback provide insights to drive sustainable growth and maintain quality amidst resource constraints?
Analyzing client data and gathering feedback offers insight into service delivery and potential areas for operational improvement. This data-driven approach helps identify opportunities to optimize workflows, maintaining peak efficiency and quality even when faced with resource constraints. Strategic planning like this is critical for making informed decisions, nurturing sustainable growth, and ensuring a proactive approach to future challenges.
How does a firm’s commitment to data security directly translate into stronger client relationships and a distinct competitive advantage?
Data security is one of the main foundations for building and strengthening client relationships. Though carefully protecting sensitive client data, firms cultivate trust and demonstrate professionalism. This focus on data integrity becomes a key competitive advantage, reassuring clients that their confidential information is in safe hands, which is crucial for retaining loyalty and attracting new business, especially during critical times like the busy season.
Beyond simply avoiding errors, how does diligent double-checking work with tax software enable firms to mitigate risks and provide more strategic guidance?
Diligent double-checking work within tax software goes beyond basic error avoidance and is a fundamental risk mitigation strategy. This careful attention to detail ensures accuracy and reduces errors, safeguarding both the firm’s reputation and client assets. The confidence derived from this rigorous process allows tax professionals to provide more strategic guidance and engage in higher-level financial planning, even under the pressure of the busy season, knowing their foundational work is solid.
Aside from automating repetitive tasks, how can integrating AI strategically enhance your firm’s capacity for strategic tasks and contingency plans?
Integrating AI allows your team to dedicate valuable time to complex strategic tasks. AI can refine predictive analytics, offering deeper insights for financial planning and enabling better contingency plans. This allows many firms to shift internal resources from reactive problem-solving to proactive strategic guidance, thereby maximizing efficiency and adapting to evolving client needs with greater agility.
Disclaimer:
Tax-related products and services provided through Harness Tax LLC. Harness Tax LLC is affiliated with Harness Wealth Advisers LLC, collectively referred to as “Harness Wealth”. Harness Wealth Advisers LLC is a paid promoter, internet registered investment adviser. Registration does not imply a certain level of skill or training. This article should not be considered tax or legal advice and is provided for informational purposes only. Please consult a tax and/or legal professional for advice specific to your individual circumstances. This article is a product of Harness Tax LLC.
Content was prepared by a third-party provider and not the adviser. Content should not be regarded as a complete analysis of the subjects discussed. Although we believe the content is reliable, it is not guaranteed as to accuracy and does not purport to be complete nor is it intended to be the primary basis for financial or tax decisions.