Why CPAs Need Tax Preparation Services During Tax Season?

Last updated: 01 Mar, 2023 By Puneet Sharma | 6 Minutes Read

The tax season is about to kick off, and we will soon be witnessing CPA firms running in all directions to manage the existing clients, take up new ones, offer 100% client satisfaction, and contribute to the business bottom line. There would be two sets of CPA firms, one expanding their human resources to manage the workload and the other utilizing tax preparation outsourcing services to embrace more efficiency, accuracy, and peace of mind.

While the chances to fail are high for the first set of CPA firms, the latter set (the one that relies on tax preparation services) makes the most of the strenuous tax season and comes out as a winner.

The Need for Tax Preparation Outsourcing

Tax preparation services outsourcing comes as a fresh gush of wind amid the time-sapping tax season. With workload increasing in heaps and bounds, CPA firms need a reliable source to help them handle their clients without fearing errors or wrongful tax preparation. Professional tax preparation services for CPAs have teams of pre-vetted, experienced, and highly qualified accountants who manage accounts, prepare tax returns and calculate the payable taxes for your clients comprising of businesses, companies, and organizations.

Their advanced approach to tax preparation based on modern technology, valuable experience in the field, and expertise in meeting deadlines make it even more thoughtful to outsource tax preparation services. Additionally, by outsourcing tax preparation services, CPA firms can save a lot of money by reducing labor costs, employee-benefit obligations, and hiring and training expenditures.

Finally, it is common for CPA firm employees to feel snowed under in work with tax season arrival. The extensive work hours and back-to-back client requirements can anytime compromise the quality of work and jeopardize your station as a reliable and professional CPA firm.

Hence, outsourcing tax preparation services is the best decision a CPA firm should make, especially when the going gets tough, as it does in the tax season.

What are the Benefits of Tax Preparation Services for CPAs?

1. Internal Resource Maximization

Hiring temp staff/ seasonal employees is a common practice for small and medium-sized CPA firms. While it does help manage the workload during the tax season, it also affects the budget. As small and medium-sized CPA firms already operate on a tight budget, hiring seasonal employees means adding salary, fringe benefits, insurance, infrastructure, training, and onboarding to the overheads. Also, once the season is over and there is no need for extra hands, all the hassle ends up being a bad investment.

When you outsource tax preparation services, they are an extension of your internal resources. Because outsourcing comes cheaper than the cost of hiring and training new staff and is available at flexible hiring models, they allow you to have a larger and better team without compromising your budget or any other resources.

2. Optimization of Time

Time is of great essence during the tax season, and the rush to meet deadlines and cover as many clients as possible often leads to inaccurate or wrong tax filing. The taxation process (accounting, bookkeeping, and tax preparation) demands a high level of precision, and any mistake can lead to severe consequences. Wrongful delegation or excess workload can lead to compromised output and quality of work.

Tax preparation services for CPAs are an excellent solution for time management and eliminate the chances of a less qualified person working on a demanding job or time crunch leading to lost clients.

3. Enhanced Data Security

The internet is a deceitful place, and even the best software and accounting tools may have a loophole inviting cyber criminals and hackers to invade your data privacy norms. Tax preparation services providers are vigilant to cybersecurity risks and have worked their way out to prevent their client’s valuable data. Their robust technological systems have authorized access, encryption, and high firewall systems to keep cybercriminals at bay.

CPA firms deal with highly confidential and valuable client information. This information can be secured and wisely used by tax preparation services for CPAs to ensure accurate tax preparation without any security lapse. With an in-depth understanding of the IRS’s rules for security, tax preparation services companies have developed a robust framework to operate in a safe and secure environment.

4. Access to the Latest Technology

The technological space is rapidly changing, and CPA firms are struggling to maintain the pace. With new software launching in the market automating the tax preparation industry, the need to invest in the latest tech and take advantage of seamless working is at its highest. But it is an expensive project for small, mid-sized, or even start-up CPA firms. The technology disruption presents several major challenges, including:

High initial investment
Monthly maintenance and upgrade charges
Training and integration costs

These challenges can be easily overcome by choosing to outsource tax preparation services, as the leading outsourcing companies have already acquired the latest tech and are offering their services based on the automation feature.

5. Access to Qualified, Licensed, and Experienced Professionals

Working with underqualified personnel exposes a CPA firm to errors in work which can lead to dire consequences, including Internal Revenue Service investigation (IRS). The client remains unaware of their tax requirements and trusts their CPAs blindly to work efficiently and accurately for them.

With tax rules changing every year and a high workload making it tough to manage every account efficiently, the chances of error are natural. One big mistake and you are out of the game for several years as you are tagged as an unprofessional CPA firm with a record of wrongful tax preparation.

With tax preparation services, eliminating the chances of error and efficiently managing the high workload during tax season is achievable. The accounting outsourcing companies provide you access to a talent pool of qualified, licensed, and highly experienced accountants. As a result, you can take advantage of specialist expertise and expand your ability to work on any type and scale of business.

6. Amplified Focus on Core Functionalities

CPA firms operate with smaller teams, and often every team member is loaded with a multi-task profile irrespective of their skill set or specialization. While it is a common practice for the rest of the year, operating on the same model during the tax season brings disadvantages.

With time-sapping tax season, managing too much work in too less time is challenging and often takes your focus away from the core functions. Increasing the number of employees brings its own set of challenges. To equate the situation, it is best to outsource tax preparation services, especially during the tax season, and let the professionals share your responsibility and free up your mind to focus on your core functions.

7. Improved Quality of Work

There is no scope for error in taxation. Your error can jeopardize your client’s credibility, exposing them to taxation fines and scrutiny by the IRS. To ensure error-free tax filing, prevent putting clients at risk, and tackle the hassle of filing revised returns, CPA firms must outsource tax preparation services, especially during high workload season. Tax outsourcing services ensure error-free taxation practices and help you maintain a spotless record.

How to Find and Choose the Right Outsourcing Tax Partner?

The benefits of outsourcing are clear, but they do not just come with every other tax preparation service. Deciding which accounting partner is right for your firm is a key factor and must be assessed diligently.

As you assess the available tax preparation services options, you must focus on a few factors, including:

Comprehensive data security
Proven track record
Outstanding talent pool
Assure quality delivery
Offers the best-in-class technology and infrastructure
Flexible engagement models
Exceptional client support

A thorough assessment of the tax preparation services company is important to ensure you choose the best accounting firm that helps you expand your capabilities and take up more work during the demanding tax season while maintaining accuracy and quality of work.

At Cogneesol, we are industry leaders with expertise in tax preparation services for CPAs and accounting firms. Our team of qualified, licensed, and experienced professionals can help you tap into opportunities and manage the rise in demand for tax services in the upcoming tax season.

Let’s connect and discuss your needs to customize a tax preparation services plan for hassle-free management of taxation requirements in the coming tax season! Contact us at +1 646-688-2821 or send an email to info@cogneesol.com.