EOFY and the importance of checklists

The beginning of a new financial year means tax advisers around the country will look ahead for ways to improve the ability to look back. Improving productivity and ensuring accuracy are the key factors when it comes to income tax return preparation across your client base.

A savvy way that advisers are improving productivity and ensuring accuracy is by implementing end of financial year (EOFY) checklists. By streamlining general and regular tasks in the annual tax return process, more time is available for advisers to provide complex solutions where necessary, as well as opportunities to develop strategies in uncommon situations.

This is imperative when you factor in the complexity around staying on top of the annual tax return process. Each year there are key changes and new measures you need to be aware of when completing your client’s tax returns. Routine processing is in fact anything but routine – each year there are exemptions, deductions and levies to be considered and it’s crucial that advisers plan for every eventuality – after all that’s how we build trust with our clients.

Reducing the chances for errors

The largest business risk we have in yearly tax return processing comes from not picking up an error in law or an omission of a deduction. EOFY checklists can help all advisers, and their staff, get the day to day stuff right. A checklist also helps initiate communication you need with clients to deal with annual tax changes and other unexpected considerations.

They are valuable as part of an induction process for new staff members. Generally, when a new employee begins at a firm there is a chance that some knowledge of clients is lost. Adequate professional checklists gives new staff an easier ability to understand the intricacies of a client’s tax situation. Also, checklists give clients an opportunity to be more efficient by preparing documentation ahead of time in the format provided by the checklist. Therefore, more time can be spent focussing on higher value client concerns such as ongoing tax management strategies for individuals and businesses.

Finding efficiencies and implementing them across the board

EOFY checklists can be ideal for accounting firms with multiple team members working on one client. These checklists can be the tool to achieve consistency and efficiencies in the review process, which provides more time for customer service delivery with your client. These checklists work because the handful of changes to deductions are clearly itemised and explained. With a professional checklist, you don’t need to re-invent the wheel – the exceptions to the rule even have their own list.

When applied across the practice, we estimate professional EOFY checklists can improve productivity levels around 10 – 15 per cent, as well as strengthen quality control throughout teams and the firm as a whole.  No more re-keying lists, skipping steps and training staff in the way to do things.

What’s in a professional EOFY checklist?

Pre-prepared EOFY checklists can include:

  • Client conversation and letter checklists for individuals and small business for year-end tax strategies for income tax, capital gains and losses, deductions, offsets, depreciation and trading stock plus many others.
  • Checklists and client letters for individuals and small business for annual tax changes – for example informing clients that from 1 July 2019 businesses who do not comply with tax administration laws on withholding payments to employees may lose their tax deductions. Alternatively, you can advise individuals over a certain age that an additional contribution to superannuation may be allowed if they sell their home.
  • Worksheets that work through the general deduction items for individual workers, so that standard claims seen in practice are dealt with completely and quickly.
  • Examples for small business with tax instalments.
  • Year-end business questionnaires and business “health checks”.

Going to the next step

Apart from the administrative house-keeping benefits of preparing for tax time and managing your client’s tax planning requirements, the information you have at your fingertips in each tax return is invaluable. Increasing efficiency provides more time and opportunities to develop and consolidate the relationship with your clients.

The better the data in your client’s checklists and tax returns, the easier it is to provide additional services, such as:

  • identifying future opportunities with capital gains tax and superannuation
  • strategic planning and structuring in future business operations, and
  • keeping clients up-to-date with actionable items.

All of these items help a client stay in front of their tax affairs, and help you to develop a deeper and broader advisory relationship with them.

Increasing efficiencies in an accounting practice provides you with more opportunities to provide a personalised service to your clients. Selling yourself, as a trusted advisor with access to opportunities, will strengthen and consolidate their commitment to you with their future returns, as well as future investment and business transactions where they need your advice.

 

Ben Miller, Senior Writer, Wolters Kluwer

Ben Miller is Senior Writer for CCH iQcontributing writer for the CCH Federal Budget lock up team and public speaker for industry and Wolters Kluwer events.  Today Ben delivers experienced insights for CCH iQ customers – the software and information services solution from Wolters Kluwer that is specifically designed for accountants to help redefine how they do business.

Ben Miller

Senior Writer at Wolters Kluwer
Ben Miller is Senior Writer for CCH iQcontributing writer for the CCH Federal Budget lock up team and public speaker for industry and Wolters Kluwer events. Today Ben delivers experienced insights for CCH iQ customers – the software and information services solution from Wolters Kluwer that is specifically designed for accountants to help redefine how they do business.
Ben Miller

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Ben Miller

Ben Miller is Senior Writer for CCH iQcontributing writer for the CCH Federal Budget lock up team and public speaker for industry and Wolters Kluwer events. Today Ben delivers experienced insights for CCH iQ customers – the software and information services solution from Wolters Kluwer that is specifically designed for accountants to help redefine how they do business.

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