I have long believed that October’s filing deadline on the 15th is the worst of them all. To begin, none of the returns you are filing in October are easy ones that you can just pop out the door. If they were, they’d be done by now.
October returns are either clients who waited until the 11th hour to provide documents to you or the returns are extremely complex, and you probably still have not received final K-1s.
To add to the pressure, clients have started to think about year-end and tax planning strategies. Where fewer of them were motivated by having a tax planning call in the first quarter, and they all want to know now, “what do you owe for estimates.” Further compounding the October work to include not just wrap up of last year’s returns, but now the need for projection calculations and strategy sessions.
Wait there is more. With the IRS late filing relief currently extending to Sept. 30, the pressure is quadrupled. It remains to be seen if the IRS will heed the AICPA’s advice and extend this relief to Dec. 31 to take pressure off practitioners, but as of now, clients are incentivized to finish late filed 2019 and 2020 returns to take advantage of the relief.
So how do you and your team muddle through this madness? Here are five tips for surviving the second season:
1. Set clear expectations
Our engagement letters are clear that if documents are not received 30 days prior to a deadline, our team cannot guarantee timely filing. We also reiterate this expectation when sending out client organizers as well as in any follow-up communication requesting docs. Make sure your expectations of clients are clear and written.
If you are receiving documents inside of that 30-day window, or whatever time frame you deem reasonable, I always remind clients by saying “thank you for sending these, just as a reminder we cannot guarantee timely filing when documents are received less than 30 days before a deadline, however, we will do our best to accommodate you” so there’s no lack of clarity.
2. Charge penalties
We instituted what I would consider a “rush” fee years ago. These are also clearly defined in our engagement letters. It is spelled out clearly for clients that the fees for missing that 30-day window will be added on to the cost of return automatically regardless of whether or not we are, or are not, able to complete the return by the deadline.
You will be happy to have these on late season returns as historically they’re the ones that are stopped and started the most, eating into your profit margins to begin with. Some firms require documents as early as July 1 before penalties will start to be added to client bills.
3. Control client attrition
If you have the same offenders year over year sending documents on Oct. 10, time to reevaluate the relationship. Sure, sometimes there’s good cause, you have all the information except the K-1 that never gets completed and sent to your client until after Sept. 15, but if that’s not the only piece of information your team is waiting on, time to reconsider whether or not this client is a good fit.
Clients who have consistently shown you they have a bad habit of appearing last minute for filing deadlines, time to let them go.
October returns are either clients who waited until the 11th hour to provide documents to you or the returns are extremely complex, and you probably still have not received final K-1s.
4. Boost your team
I think October just sucks more because we had the summer to rest. We are rejuvenated by being at the beach and we’re not ready to enter another round of tax season 2.0. Our kids just went back to school, we need to be at soccer practice and the stress can feel more overwhelming than in March and April.
Coming up with something to boost team morale like Friday morning bagel delivery, once-a-week chair massages, or even just a fun team outing to look forward to right after the deadline can let them know that they are supported through the finish line. Make sure they know what the client deadlines are and support them in enforcing them with last-minute clients so they do not take all the pressure on themselves.
5. Stay focused
If your team is not using technology to stay organized and focused, put this on your must-dos before the season starts again in the new year. Beyond just having a system for organizing returns coming in and out and tracking who is responsible for what work, make sure you’re training your team on how to stay focused and task-oriented.
Our office for example instituted “quiet time” for an hour every afternoon where internal messages are not expected to be sent or responded to, and our team is encouraged to close emails and not answer phones. This welcome break is to ensure that everyone has an opportunity (and permission) every day to focus on getting projects completed and out the door.
