Businesses of all kinds breathe a sigh of relief on April 15 (or 18th this year). Whether filing taxes is outsourced or done in-house, the end of tax season is a reason to celebrate. But there are many ways to improve and learn from the traditionally stressful and expensive time period each year.
Although the immediate reaction is to forget about taxes until the end of the year- specifically now when the process and numbers are fresh in everyone’s mind is the best time to boost productivity, evaluate the process, and find ways for the finance team and company to improve.
1) Evaluating the Process Itself
Big corporations have little choice but to use 3rd party tax companies to complete their long and complex tax returns, but small and medium businesses have more leeway for how to complete the process. It is far easier and less stressful to outsource taxes, but for companies of certain sizes it may be more efficient to hire in-house.
At the same time, the opposite may be true. Paying a full time accountant may not be worth it if the business is too small to hire full time, or if the job is only needed during tax season itself. Whether the job is outsourced, in house, or completely passed on to a tax corporation, evaluating the price, time, and efficiency based on the numbers and company vision, can create a cheaper and more efficient tax process next year.
2) Embrace Automation
Just about every company can improve efficiency through automation and technology, and this is especially true with tasks such as accounting and financial planning. From the accounting side there are an endless number of software options for real time accounting, such as Quickbooks or Xero to name just a few.
Real time accounting and tax automation are obvious solutions for those looking to save time on repetitive tasks, but automation and technology extends beyond that. Practice management softwares help create more efficient tax teams by simplifying activities such as assigning tasks, automating workflows, and getting approvals. Pixie and AccountancyManager are a few of the leaders in accounting practice management softwares.
In addition, the end of tax season is a great time to implement automation in financial planning, as what companies do with the numbers and data from filing taxes plays a big role in the budget, forecast, and growth of a company for the upcoming year. FP&A software solutions such as DataRails and Jedox allow companies to budget and forecast far more efficiently with the data collected from accounting and any other department.
3) Diversify tax exposure
“Nothing is certain in life except for death and taxes.” The famous quote from Benjamin Franklin holds as true as ever, but that doesn’t mean there aren’t ways to improve where, when, and how much goes to taxation. While there is no one-quick fix, it is often well worth it to hire tax professionals in order to identify where money can be saved.
This is especially true with all of the events of the past few years which have caused a major tax shakeup. New laws and regulations pop up faster than usual, and oftentimes they are created in order to benefit businesses.
Whether it be ways to diversify investments, new and complicated laws, or even a discount for certain criteria, there is a good chance that a business can save a significant amount by hiring a professional to review these things. There is no better time to get ahead of this than right after filing taxes, as preparing for next year's hectic tax season in advance is less stressful, more professional, and significantly cheaper than hiring last minute.
4) Increase Communication
Medium and large companies can especially benefit from this, as an organization is made up of many teams and departments that don’t necessarily communicate with each other. The financial team (both accounting and finance) has extreme oversight that no other department has, and the entire company can benefit from the data they analyze, and the bigger picture that they structure.
Whether it be simple team communication tools such as Microsoft Teams or Slack, or virtual meeting rooms to adapt to the hybrid work culture, increased communication does wonders for collaboration and company productivity. Fresh off of tax and budget season is when the finance team has the most immediate insights and ways to communicate data to the rest of the departments.
Being transparent, communicative, and open to new ideas and technologies are all good courses of action to take after the stressful time period of tax season. The data from the finance department is a big part of what shapes the direction and goals of the company over the next year, and creating a more efficient and informative process is beneficial for the entire company.