Are you a CPA, EA, or Accounting firm with high hopes and ambitions? Do you want to establish your business in the cutting-edge competition? Considering outsourcing companies for tax return preparation will help you achieve higher efficiency and get an opportunity to grow your business.
From small start-ups to fortune 500, outsourcing tax preparation services have helped firms reduce stress, improve productivity and expand the client base. However, there are a lot of myths and facts about considering outsourcing companies for tax return preparation. Here are the top ones:
1. Myth: My clients will not allow me to outsource their returns.
Fact: Most clients won’t ask why their return is being outsourced.
There is a perception that clients will ask many questions if the firm outsources tax returns. The truth is that most clients trust the firm has done due diligence before outsourcing their tax return preparation. So if the firm is okay with it, they are too.
However, the firm should be ready for the clients who ask for detailed information. Tax outsourcing companies will help your firm with FAQs to answer client questions. Even after answering their questions, if some clients still have concerns about their outsourced tax return, you can offer them the option to continue doing their return in-house.
2. Myth: Outsourcing tax return preparation is beneficial only for large firms
Fact: Small and mid-sized accounting firms can also outsource their tax returns and focus on growing the firm.
By taking help from outsourcing companies, small and mid-sized accounting firms can increase their portfolio and provide many services to their clients. If you have bookkeeping staff but don’t want to say no to clients for tax return preparations, outsourcing will help keep your client from going to another firm and also help you maintain the relationship with them for a longer duration.
This way, small and mid-sized accounting firms can offer all kinds of services to their clients without hiring full-time professionals.
3. Myth: Even during a down economic period, you will have to pay the same amount to the outsourced company
Fact: With outsourcing, you only pay for the services that you actually use.
Firms tend to shift their workforces if the situation changes economically. This process is challenging, but if you outsource your tax returns, the responsibility of managing the talents lies with the outsourcing companies. You can ask them to scale back their services and pay them less if you need fewer hours from your outsourced accounting team. When you are ready to scale back up, just let them know, and you will have a full-time team again.
4. Myth: The quality of outsourced tax returns will not be up to the mark, and my staff will have to spend their time fixing them
Fact: The quality of tax returns prepared by experienced outsourcing companies will be of the same or higher quality than that of your firm
Working with an experienced outsourcing accounting company will help you level up the quality of your tax returns. Outsourcing companies hire qualified and skilled professionals to meet or exceed the quality of tax return preparation done in most CPA firms. While shortlisting an outsourced company, ask about staff experience and continuing education, how often the staff receives training on U.S. tax laws and regulations, and their review process. Usually, these outsourcing companies have a proper review process before sharing tax returns with you.
5. Myth: My clients’ data won’t be secure with outsourcing companies.
Fact: Outsourcing companies have strong client data protections and protocols to prevent data breaches.
Outsourcing Tax Return Preparation and giving financial information to another company can be daunting. Over the years, concerns over client data protection have decreased with an increase in the use of cloud accounting and security. However, the firm must ensure that the tax outsourcing companies protect their information against external and internal risks. They must have a plan to protect clients’ confidential and sensitive information at any cost.
Top outsourcing companies invest in impenetrable and expensive security systems that can help mitigate the odds of data breaches and compromised security programs. You can benefit from having access to the latest technology at no additional cost by outsourcing tax returns to these companies.
Don’t allow these myths to influence your decision. Outsourcing tax preparation services can help you reduce cost, improve work quality, expand your portfolio, gain professional expertise, and much more. You can focus more on your core business by working with outsourcing companies for your tax return preparation.