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Blog » Why CPA Firms Should Outsource Tax Preparation – 6 Strategic Reasons

Why CPA Firms Should Outsource Tax Preparation – 6 Strategic Reasons

Last updated: 30 Jan, 2024 By | 6 Minutes Read

tax preparation for cpa

The tax season is fast approaching; as a result, CPAs and CPA firms are becoming busier than usual due to an exponential rise in the tax accounting workload. As a CPA firm owner, you might already know that the busy tax season can be demanding, requiring your CPAs to do multi-tasking, which may further lead to chaos.

On the contrary, with CPA tax preparation outsourcing, you can delegate some tedious tax-prep tasks to a responsible service provider and experience higher accuracy and quality, increased capacity, cost savings, and a lot more other benefits. Let’s read through this article and learn;

Why CPAs or CPA Firms Should Outsource Tax Preparation

Optimizing Time

CPAs need to invest their time, skills, and dedication to complete the labor- and time-intensive tasks involved in financial accounting and tax preparation accurately. Especially in the tax season, you might assign some tax work to an employee who might not have enough experience managing taxes. As a result:

  • They would take a lot of time to complete the work assigned
  • Otherwise, if they do it in a hurry aiming to meet the deadline, they become vulnerable to making mistakes, causing inaccuracies
  • The longer TATs often lead to delays in other associated tasks

On the other hand, if you outsource tax preparation, you can free your staff from time-eating jobs, saving their time that they can better utilize for other value-adding areas like client servicing or providing advisory services.

Leveraging Tax-saving Opportunities

As a CPA firm, your prime focus and objective are to help your clients maximize tax deductions, credits and bring down their tax liability as much as possible. However, given that your accounting staff usually remain busy, it might be difficult for them to spare time for learning about tax law amendments and their effects. Due to this, they might even miss on new tax deduction opportunities.

Opting for a competent partner for tax return outsourcing ensures that you can rest assured. Their team is thoroughly familiar with tax norms and regulations, and they actively stay updated with any changes in the applicable laws. As a result, they leverage tax-saving opportunities, helping you make your clients happily satisfied.

Meeting Tax Deadline & Ensuring Compliance

Running a professional services business like a CPA firm is all about meeting compliance and deadlines because these are the routes to gaining clients’ trust and loyalty. One of the main reasons CPA firms should consider outsourcing is getting the work done by experts who ensure higher accuracy and fast turnaround times.

When you outsource, you get access to skilled tax professionals who possess multiple years of experience preparing taxes for clients from various states. Moreover, since they are familiar with almost all types of taxes applicable to your clients, they can complete the assigned work without any delay, helping you meet client-defined deadlines. That way, you not only gain accuracy in numbers but also ensure compliance, helping your clients prevent hefty penalties or the IRS audit.

Benefitting from Time Zone Difference

You can take advantage of the time zone difference by outsourcing tax preparation. For example, your CPA firm is in the US, and you outsource tax services to a provider firm in another part of the world, perhaps in a region where the difference in time is a minimum of 10 hours. With this, you can benefit a lot when you assign work to the outsourcing firm by the end of the day, and you will get the work the next day. Apart from that, most tax outsourcing companies offer round-the-clock support, which means the firm can resolve your queries at any time.

Maximizing Technology

Professionals at tax outsourcing firms are usually aware of the most advanced technology used for tax preparation purposes. By joining hands with a reliable firm, you can leverage their technology expertise for your software and tools.

If the staff at your CPA firm isn’t appropriately knowledgeable or experienced in operating tax-prep programs and applications, now is the best time to outsource tax preparation and utilize your software subscriptions to their best.

Besides, they generally have advanced IT infrastructure, which means you need not pay for any add-on hardware your outsourcing partner firm requires to manage your tax work – they would most likely have it all in place.

Ensuring Secure Data Transfer & Storage

CPA firms store and manage highly confidential client information (typically regarding their finances). One must protect this information against illegal usage because otherwise, the clients can suffer losses. Not only that, but the CPA firm can also lose its reputation in the market, leading to a loss of trust in clients, facing legal fines, and, at worse, shut down. All these concerns make it necessary to ensure your outsourcing partner takes data security seriously.

Hence, choosing a reliable outsourced tax preparation firm is an ideal solution to ensure secure data transfer and storage. At Cogneesol, all sensitive information is accessible when you regulate and control the information security environment. We have designed and implemented a robust Information Security Management System (ISMS) in line with the ISO 27001 and SSAE18 standards. This ensures that the information we are in the custody of and are responsible for is safeguarded against inappropriate disclosure by maintaining confidentiality.

How Does Tax Preparation Outsourcing Save up to 60% of Your CPA Firm’s Costs?

CPA firms usually struggle to stick to a tight budget. However, at the same time, they are expected to provide high-quality services to clients, which eventually becomes costly due to the need to hire skilled and experienced professionals. On the contrary, if they don’t hire quality staff and fail to meet client expectations, they might not be able to build a solid customer base. This makes it a challenging situation for them, and if you are also dealing with the same, know that outsourcing can help you save a lot.

By outsourcing some repetitive, time-consuming tax preparation tasks, you not only get a team of tax experts without spending on recruitment, training, monthly salary, perks, and benefits but also reduce CPA firm costs. Moreover, you can get quality service at hourly rates or pay them on a project basis.

    In the busy tax season, you might hire extra employees to manage the increased workload. But once the peak tax season passes and you experience a decrease in workload, you no longer have that much work, but you would still pay for those employees. Outsourcing tax return preparation helps you avoid these expenses as you can acquire these firms when needed, and scale up or down services according to your changing requirements. In a nutshell, as a CPA firm owner, you can save up to 60% of your expenses with outsourced tax preparation.

    How Does Cogneesol Help Your CPA Firm?

    At Cogneesol, we have a team of 100s of skilled tax preparers with an average experience of 10 years and have the required expertise to meet your needs. We have been servicing CPA firms since 2008, helping them deliver high-grade tax return preparation services to their clients and fulfilling their expectations.

    We are a globally trusted tax preparation outsourcing firm you can lay your trust in. With our customized and scalable services, you can obtain tax preparation services according to your unique requirements. So choose us to reap benefits such as complete compliance, increased capacity, enhanced efficiency, fast TATS, higher productivity, cost savings, and more.

    Get in touch today to learn more about us, our services, and our pricing plans. Call us at +1 833-313-3143 or send an email to [email protected].