regroupTAX: Principles of Tax Workpapers
- 1. WORKPAPERS B Y R E G R O U P T A X P R I N C I P L E S O F T A X 1
- 2. 0 1 Introduction Two CPAs with 15 years + public accounting experience Started company in 2012 that helped tax pros scale their practices by providing key data entry services In 2016 launched SaaS based tax workpaper app (regroupTAX) designed to increase efficiency and workflow procedures 2
- 3. 34% THE TOP CONCERN FOR FIRMS OF ALL SIZES Workflow Efficiency 3
- 4. AGENDA Types of Workpapers: Ind. vs. Bus. 6 Principles of Good Workpaper Techniques Other Tips/Tricks to Maximize Efficiency Questions Short Demo 4
- 6. S T A N D A R D I Z E D F O R M S basic set of low-level functions can be completed for each return and every workpaper file looks the same V A R I O U S F / S F O R M A T S different formats make it difficult to shift tasks and effectively create a workpaper file that's consistent across the board INDIVIDUAL vs BUSINESS 6
- 7. Average tax preparation fee for a typical individual return (1040) Average tax preparation fee for a typical business return (1120, 1120S, 1065) $273 $743 Business returns = more room for profit 7
- 8. 1.油DEVELOP油INTERN PROGRAM 2.油OUTSOURCE油DATA ENTRY 3.油UTILIZE油 TECHNOLOGY COMMON GOAL:油 Shift low-level tasks to interns; let them scan, organize and input info Onshore and offshore outsource options; GruntWorx, SurePrep, etc. Most tax software offer an OCR add-on that will scan and populate; ProSystem fx Scan, etc. Eliminate data entry and create consistent workpapers at a significantly low price INDIVIDUAL TAX RETURNS ways to increase efficiency 8
- 9. A C C O R D I N G T O I N T U I T , E A C H B U S I N E S S R E T U R N T A K E S 5 . 1 H O U R S O F D A T A E N T R Y 5.1 hours 9
- 10. BUSINESS TAX RETURNS ways to increase efficiency GOOD WORKPAPERS! Requiring extensive, organized and indexed working papers or PDF files may take about 20 minutes per return but can reduce the time it takes the preparer to actually work on the return by approximately 50 minutes, and reduce the reviewer time by about a half-hour, resulting in a net gain of one hour per return. For a workload of 400 returns, this can save the equivalent of one fulltime person during tax season. 10
- 11. BE CONSISTENT P R I N C I P L E # 1 Design油a油set油of油techniques油that油work油for油you油and油your油firm and油stick油to油them. 11W W W . R E G R O U P T A X . C O M
- 12. SAVE A COPY P R I N C I P L E # 2 Before油you油even油think油about油making油adjustments油to油the financials,油save油a油copy油of油the油Balance油Sheet油and油Income Statement油as油received油from油the油client油or油their油bookkeeper. 油足油"PBC" 12W W W . R E G R O U P T A X . C O M
- 13. DESIGN AN INDEX P R I N C I P L E # 3 Designing油an油index油system油along油with油a油set油of油workpapers required油for油every油return油allows油you油to油standardize油the油prep process油and油eventually油delegate油low油level油work油to油staff and/or油interns. 13W W W . R E G R O U P T A X . C O M
- 15. AJES ONLY!!! P R I N C I P L E # 4 If油you油go油into油the油QB油or油Xero油file油and油start油changing transactions,油you油are油going油to油lose油your油trail油and油create油an extremely油frustrating油situation油for油yourself.油油By油recording everything油as油an油adjusting油entry,油you油create油a油nice油trail油and give油yourself油the油opportunity油to油present油the油changes油to油your client,油an油auditor,油a油partner油at油the油firm,油etc. 15W W W . R E G R O U P T A X . C O M
- 16. TOP 3 CHECKLIST P R I N C I P L E # 5 Come油up油with油the油first油3油steps油you油take油on油every油return. 油Need油some油suggestions?? 16W W W . R E G R O U P T A X . C O M
- 17. CHECK. CHECK. CHECK. does retained earnings match prior year return? are the financials complete through year-end? does the balance sheet tie to the income statement? 17
- 18. LEVERAGE TECH P R I N C I P A L # 6 There油are油plenty油of油software油programs油designed油to油reduce inefficiencies.油油Each油has油it's油pros油and油cons. 18W W W . R E G R O U P T A X . C O M
- 19. Leveraging Technology to Enhance Client Service THE PCPS CPA FIRM TOP ISSUES SURVEY 2 0 1 1 - 2 0 1 5 Top 10 Issue: 19
- 20. OTHER TRICKS... Prior year file Book-to-tax reconciliation Fixed asset detail Referencing State tax detail + estimated payment schedule Tax-related questions 20
- 21. PY FILE Make油it油a油habit油to油quickly油review油the油prior油year油file油before油you begin油tax油prep油for油the油current油year.油This油will油give油you油a roadmap油of油what's油going油on油with油the油client. 21W W W . R E G R O U P T A X . C O M
- 22. BOOK-TO-TAX Paint油a油clear油picture油of油how油you油moved油from油the油book financials油to油the油tax油return.油Use油this油reconciliation油to油explain the油tax油return油to油your油clients. 22W W W . R E G R O U P T A X . C O M
- 23. FIXED ASSETS Tie油out油the油depreciation油schedule油to油the油assets油on油the油books. Make油sure油your油client油confirms油any油assets油that油are油no油longer in油use油or油have油been油disposed油of. 23W W W . R E G R O U P T A X . C O M
- 24. REFERENCE Reference油determinations油you油made油on油the油tax油return.油We recommend油to油To/From油system. 24W W W . R E G R O U P T A X . C O M
- 25. STATE TAX + EST. Avoid油future油notices油by油confirming油the油state油taxes油and estimated油taxes油paid油during油the油year. 25W W W . R E G R O U P T A X . C O M
- 26. TAX RELATED ?'S W W W . R E G R O U P T A X . C O M Brainstorm油with油your油staff油before油tax油season油to油compile油a油list of油tax足related油questions油to油ask油every油client. Think油new油credits,油etc.油 26
- 29. CREATE YOUR OWN WORKBOOKS Use the off season to create an excel workbook and setup each client's financials + formulas. EMBEDDED OR ENGAGEMENT Most tax software offer embedded functions and addt'l engagement software for purchase. TAX WORKPAPER APPS Apps that are designed specifically to create tax workpapers allow for flexibility in acctg/tax software choices. Recommendations for consistent workpapers 29
- 30. PROS CONS Excel Workbook -Low Cost -Minimal Training -Customize Reports -Significant Setup Time -Human Error -Manual Upkeep 30
- 31. PROS CONS Embedded Functions -Integrates w/ Tax Software -Minimal Data Entry -Familiarity -Lack of Updates & Maintenance -Inconsistent Output -Future Conversions 31
- 32. PROS CONS Engagement Software -Integrates w/ Tax Software -Minimal Data Entry -Familiarity -High Cost; Difficult to Implement Firm-Wide -Designed for Audit -Future Conversions 32
- 33. PROS CONS Tax Workpaper Apps -Software Neutral (Acctg + Tax) -Implement Firm- Wide; Consistentcy -Low Cost -No Direct Integrations w/ Tax Software -Web-Based: Pro or Con? -Breakeven 33
- 34. UTILIZE TECHNOLOGY C O N C L U S I O N . . . 82% of top 100 accounting firms tie new tech to client retention and firm growth 34
- 35. T H E B E N E F I T S W W W . R E G R O U P T A X . C O M "The value of technology is best seen in its ability to automate routine or otherwise manual processes. What does this mean in practical and beneficial terms for your firm and clients? The consulting firm McKinsey anticipates that automating work processes that used to be done by human labor will allow more meaningful work as routine or repetitive tasks are replaced." 35
- 37. D E M O W W W . R E G R O U P T A X . C O M 37
- 39. Automating or even eliminating mundane or routine tasks like manual data entry with computers or software programs frees up employees time to actually use their brains for things that computers or software programs cant do, like utilizing their creativity. N I C K L O W E N S T E I N , D I R E C T O R I N S A G E W O R K S A C C O U N T I N G D I V I S I O N 39
- 41. thank you. Rachel Gregg, CPA rachel@regrouptax.com Emily Dear, CPA emily@regrouptax.com 41