CPA Case Study 4

Reasons for Outsourcing

• High demand of backlog and clean-up accounting services from small business owners for tax season
• Tax resolution specialists in the company were spending majority of their time in maintaining and updating books
• Shortage of staff to manage year-end and tax-season peak loads
• High costs associated with hiring and retaining qualified accountants and consultants
• Inability to expand their high-end services like tax-consulting and financial planning due to existing services like bookkeeping and accounting

Solution

We choose a specialist team of accountants who had worked extensively in QuickBooks and small clients earlier and clearly understood the intricacies in backlog accounting in QuickBooks.

A pilot phase of one week was designed to process six months of data each for two end-clients of the CPA firm. The test phase was a success and the client quickly expanded the work volume to cover two full time junior accountants.

Challenges

• Majority of the end clients wanted their books to be updated till date. Backlog accounting work for as far as past six years was required
• High volume of work due to extension filings in September and October
• Fast Turnarounds were required
• Most files were new files and had no/limited past historical accounting records. Hence the accountants had to substantially research expenses online to identify their nature

Production and Quality

• A two tier review system with junior accountants handling the processing and a senior accountant reviewing the files was used. This ensured high accuracy levels and consistency of accounting practices among different accountants.
• Clearly established communication protocols for prioritization of client files
• Clear work-flows and daily schedules ensured quick start and clear visibility of work in progress files.
• The emphasis early on was to ensure accuracy without comprising on processing speed. Internal benchmarking on process rate ensured every accountant had a reference processing rate to work on.
• Ensuring that the client housed all the data in a specific folder at the server, with clear instructions of priorities marked for the accountant to process the file
• Service timings of the accountants were changed to ensure a two hour over-lap with US end to resolve queries and data-related issues

Process Innovations

• Common Vendor lists for general expenses were created across different end-clients to ensure easy recognition of common expenses such as meal, fuel, supplies etc.
• Review checklist was established and implemented to ensure good review even at the processing level
• All client instructions and corrections were captured in a process manual. This was used while processing any new work. This ensured that learnings from one file carried forward to another file.
• Designing and implementing procedures to reduce processing time and error correction time E.g.: Importing and exporting data between QuickBooks and MS excel
• QuickBooks shortcuts and new features were used for faster processing of recurring transactions and expenses from similar vendors.
• Reduction of turnaround time through batch postings and innovative reporting