How to Improve Tax Return Client Delivery

Written by Brandon Gray

Make Your Accounting Firm More Efficient‍ Next Year

As tax season winds down, most CPA firms reflect on how they did this year and how they could be more efficient so that their team doesn’t wind up working overtime and weekends to meet the deadline next year. 

At Firm360, we support these last-year reflections and hope to offer the right next-year accounting solutions. Our passion is understanding the needs of small and medium-sized accounting firms and making their processes as efficient as possible.

Every year, we interview hundreds and thousands of people in the accounting industry to accomplish this. We look at their problems and figure out how we can help them improve. Tax Return Client Delivery almost always comes up as one of the areas with room for improvement.

Does the following situation sound familiar?

You have done all the work ahead of the deadline, all you need to do now is get the client to sign off and pay so you can submit their package to the IRS, but you have to wait for the client. The waiting game is not a fun one to play, so don't play it!

Today, we'll talk about Tax Return Client Delivery processes and how to avoid typical time traps and accounting delays. First, let's take a closer look at this common pain-point situation.

The Client Delivery Situation That’s Slowing Down Your Accounting Firm

You have finished the client’s tax year return. Your partner has reviewed it. Wouldn’t it be nice if that was it? You can just submit the client's tax return, and the cash is in the bank?

We wish, but no!

There are many steps required to move from a "prepared tax return" to a "done tax return." Here's a breakdown of those steps:

  1. Send the client a copy for review and comments.
  2. Print a final client copy out of your tax software.
  3. Store the documents for future reference. Typically you generate a client copy, a preparer’s copy, work papers, and the client action items.
  4. Deliver the final client copy and get it signed by the client.
  5. Send the client an invoice.
  6. Collect payment for the invoice.
  7. Submit the tax package to the IRS either by e-filing or by mail.
  8. BONUS - In August, the client is refinancing their house and needs a copy of the last two years' tax returns. Can you send them again?

The stakes are big; there's no time to waste! Some firms bring in over 50% of their annual revenue during tax season, and yet, for many of us, time delays occur. This is incredibly stressful, as you just busted your tail for months to get everything done, and now if you don’t get paid for that work promptly, it can put a burden on your firm’s cash flow. So how do you ensure that time delays don't occur?

‍Let's break down some processes that we have seen actual accounting firms using and reflect on the issues that these standard processes bring.

Client Delivery Scenario #1: Using Paper Documents

Mr. Peter Paper - CPA firms have been using paper documents for years, and it has worked just fine, so why change now? Here is how this type of firm typically delivers a tax return:

  1. Call the client, tell them you are all done, and just need them to take a look. Email them a PDF of their tax return. You aren’t crazy, you saw a blog post on hackers, so you password protect the return using the last four digits of their social security number.
  2. Put the package at the front desk and have your admin schedule a time for the client to come in and pick it up.
  3. When the client picks it up, you give them the package (including a paper invoice) and ask them to write you a check for the balance due. They didn’t bring their checkbook and will drop it in the mail “later today.” They sign the forms so that you can e-file their return.
  4. The admin makes copies and puts them in the file cabinet. Bonus points if they scan them and put them on a shared drive on the office computer.
  5. The admin notifies you that the package has been signed and delivered, and now you can submit it to the IRS.
  6. In August, when the client calls you because they are refinancing their house, the admin has to find the paper file, and you dutifully scan it and email it to them password protected with their SSN.

Pain Points:

  • Clients expect to be able to handle this without taking off work and driving to your office.
  • The client forgot their checkbook, then failed to send you the check for two months until you called them.
  • Password-protected PDFs are better than nothing but far from perfect.
  • You are stuck waiting for the client to be able to come into the office. The client wants to come in at 6:30 pm or Sunday after church or some other inconvenient time.
  • You have to pay someone to find the documents every time the client needs a copy.

‍Client Delivery Scenario #2: Using Digital Transfers

Mr. Donnie Digital - This firm has been through a digital transformation, and they love it! All their files are on their computers instead of in file cabinets.

However, the tax return delivery process is still quite time-consuming. How so? Let's take a look at Mr. Donnie Digital's client delivery process.

  1. Call or email the client. Tell them their tax return is ready.  
  2. Upload the document to the firm's document storage service for future reference. 
  3. Upload it to your client portal, so the client can get access and review it.  
  4. Help the client reset their password that they created 12 months ago and have since forgotten.
  5. Upload the return to your e-signature solution; send the signature request to the client.
  6. The client signed the document, now download the signed copy and upload the signed copy to the document storage system and the client portal.
  7. Generate and send the client invoice
  8. Wait for the client to pay.
  9. In August, the client calls you because they are refinancing their house and forgot you have a client portal. When you ask them to check the portal, they call back and ask you to help them reset their password. You either help them or give up and send them the document directly at this point.

Pain Points:

  • This fully digital process utilized 3-5 different systems. The amount of time spent clicking between systems downloading/uploading the file to transfer it around adds to a frustrated staff.
  • The client can never remember their password and probably hates being told to use this “secure portal.”
  • When working on a client throughout the year, their documents aren’t readily available, so you have to go and search through a separate document management system to find exactly what you need.

‍Client Delivery Scenario #3: Using a Paper & Digital Process

Mr. Harry Hybrid - As they say, everything’s fine in moderation. This CPA firm uses digital technology where it makes sense, and more traditional methods where needed. What's that look like?

  1. Call the client and tell them the tax return is ready; email them a copy password protected.
  2. Print out a copy for the client to come in and sign.
  3. Scan the signed copy and put it in the document storage solution; file with the IRS.
  4. Send the client an invoice that they can pay online in a system not tied to the client management system. When the invoice is paid, go in and update both systems, so everything is in sync.
  5. In August, when the client calls you because they are refinancing their house, the admin prints a copy and sends it to the client, password protected.

Pain Points:

  • The client still has to drive into the office, which is inconvenient for them.
  • The admin spends a lot of time (and paper) printing and scanning.
  • The client still needs your assistance to access documents in the future.

With So Many Client Delivery Tax Return Pain Points, There Has To Be A Better Way!

These common accounting scenarios have some pros and cons, but the significant disadvantage they all share is the large amount of staff time in delivering client tax returns.

At Firm360, we think that the optimal and most efficient process for tax return delivery looks something like this:

  1. Print the client tax return documents from your tax preparation software (UltraTax, CCH, etc.) directly into your document management system.
  2. Send the tax return for electronic signature directly from the document management system. This system must support KBA (Knowledge-Based Authentication) to be IRS compliant.
  3. Once the client signs the document, it should flow back into the document management system and notify you that it’s complete.
  4. Send the client the completed return from the document management system to their client portal, which does NOT require the client to use an insecure password that they will forget anyway.
  5. Send the client invoice, which can be paid online. Invoice reminders should be sent automatically if not paid by the due date. 

That all sounds great, but now leaves the following questions.

How do I get there? What accounting tools are needed to become more efficient in delivering tax returns?

We're glad you asked! There are a few options for you and your accounting team to choose from to improve client delivery efficiency.

Option 1: Separate your Tax Return Client Delivery solution.

Some interesting solutions are popping up in this space, and they solve the problem well, but some solutions charge anywhere from $5-$20 per return, and for a firm with 2,000 clients, this can add up to $40,000. At this point, a reasonable alternative would be to hire an admin to deal with it and then have them help out with other projects year-round.

Option 2: Have multiple solutions.

You can research and subscribe to a different solution for each piece of the accounting puzzle and hire someone to build out all the integrations between them, but this will be very expensive and take about 3-6 months minimum to go live. Who has that kind of time?

Option 3: Use Firm360.

You can go with the all-in-one accounting software solution Firm360 - a company founded to solve these problems. At Firm360, our core concept is saving you time by having a single integrated solution to run your tax firm efficiently. With our platform, you can be up and running with the process described above in just a few short weeks, never missing or looking back to the old ways. All the tools needed to use the Tax Return Client Delivery process described in this article are included in your Firm360 subscription at no extra cost.

Sounds a bit too good to be true? We have the proof to back it up! Let's look at the benefits and honest testimonial snapshots of real Firm360 users.

‍Benefits of Firm360 - Your Best Option & Solution

When you use Firm360, your Tax Return Client Delivery collection and process become simpler and more efficient. Everything is in one place. Everything is integrated and streamlined, which saves you time and money. Win-win.

Here’s a peek at some Firm360 users and their success:

Betsy at Banks, Gray, and Crumpler estimated that they save over 100 clicks per individual tax return using the process with Firm360, compared to their previous solution.

Amanda at Moore & Spivey used to haul boxes of work documents between home and the office if they wanted to work remotely. Now they are entirely paperless, and their clients love it!

Leigh at Mark Ashman CPA was also in need of a digital overhaul of their accounting firm. They now use the Firm360 client portal to deliver documents securely and collect signatures and payments electronically.

Your firm can be next! All you have to do is book a call to discuss how we can help you revolutionize your processes.

Book a Free Demo Today!

You'll be surprised to find that we not only help resolve your issues in tax return deliverability but all other accounting issues.

Want more solutions from the Firm360 accounting platform? You got it!

In addition to Tax Return Client Delivery, Firm360 is an all-in-one solution for all your firm’s needs. We handle client relationships, project and workflow management, time and billing, invoicing, advanced reporting, and client portal. We would love nothing more than to have a call to find out how you are handling Tax Return Client Delivery and how we may be able to help you in other ways. Book a 100% free demo call with Firm360, and get started and helped today.

We look forward to talking soon!