Tax planning isn’t something that accountants should do for their clients once the calendar ticks over to 30 June, but something that is planned for and managed throughout the year.

This is certainly not a revelation in thought, rather a reminder of the importance of providing considered tax planning services well before tax time.

But for many accountants struggling with the dual burden of completing accounting and tax compliance jobs and staying up-to-date with current taxation regulation, finding both the time and the right process needed to deliver effective tax planning advice to clients can be incredibly difficult.

This is where having the right tax planning tools comes into play.

To be truly effective, your tax planning tools (by which we mean the set of procedures, workpapers and checklists your team relies on to guide them through the tax planning job process) must (1) empower your team to cut back on the amount of time it takes them to prepare and deliver tax planning advice and (2) provide you with confidence that your team are considering everything they should be in order to deliver sound advice.

So how can you know whether your tax planning templates (or, for that matter, any set of templates relied on by your firm) are effective? Here’s a few pointers:

- They must always be up-to-date (for the latest rates, legislative changes and industry best practice).

- Updates must be shared with team members well in advance of the point at which they will need to rely on them (for familiarisation and training purposes).

- They must make it easy for your team to complete them electronically or on paper (to suit all preferences).

- They must allow your team to select those items which need to be considered for the job at hand, given the particular circumstances of the client (one size does not fit all clients).

- They must be flexible in their design, so that they are useful and relevant for junior accountants (who tend to rely on them for guidance and learning) as well as those more experienced (who tend to refer to them only for a ‘checklist’ function).

Frequently, accounting firm partners and principals find that relying on a reputable external provider for tax planning and other templates is the more cost and time-effective approach. After all, with the many client engagements to keep them busy throughout the year, just how many accountants have the time to spend creating and maintaining their own (effective) templates?  

Two of the key challenges faced by accounting firms today are how to improve the efficiency of firm-wide processes to ensure the firm is – and remains – profitable and competitive, and how to ensure all staff stay on top of current rates, legislation and industry best practice so as to manage the risk exposure of the firm.

Indeed, these two challenges have been consistently identified as top challenges over the ten years in which Business Fitness’ industry leading benchmarking study – the Good Bad Ugly – has been carried out.

At Business Fitness, we therefore continue to be surprised that less than one third of Australian firms are paperless or thereabouts, for an effective strategy for going paperless will naturally help an accounting firm to overcome these two challenges. Essential elements of any paperless strategy include effective electronic document management and the use of electronic workpapers – perhaps not coincidentally, these are also two of the most effective (and most easily achievable) ways to improve accounting firm efficiency.

Perhaps we can put this down to a possible misconception that the paperless office is something which can simply be ‘bought’. Or maybe it is due to a lack of a well thought out strategy in place from the start, a lack of leadership, or not having the right electronic document management system in place.

Whatever the reason may be, there is no denying the fact that, by not going paperless, firms are retaining the burden of some hefty costs that are well within their control to eliminate. Take, for example, the fact that, on average, it costs $20 to file a single paper document, $120 to search for a misfiled document, and $220 to reproduce a lost document.¹

Just how much could your firm save by implementing smarter processes and technologies in your practice?

Business Fitness are the experts in helping accountants (and their SME clients) to go paperless. Contact us if you'd like to find out more.

The comments in this blog are explored in detail in our first Good Bad Ugly Supplement Report - 'How to Profit from Going Paperless' - now available for purchase from Thomson Reuters. You can download a free copy of the Executive Summary here.

¹Source: Kofax White Paper: The Business Case for Automating Document Driven Business Processes (2010) (figures based on the results of a study conducted by PwC)