CPA Case Study 4

Client

A mid-sized tax firm based in Chicago, IL with a successful track record and a large tax return preparation practice. The Client provides tax resolution, tax preparation, bookkeeping and accounting services to a diverse mix of small-medium businesses. The outsourcing project at our firm started with a test period of one week and was extended to almost 300 man-hours in the very first month. The services required were accounting and clean-up activities in QuickBooks.

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 services
Software

QuickBooks Enterprise

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
Impact
  • The client saw savings of over 35% in the first two months. Savings of about 50% is expected for the ongoing process through better through put
  • Fast turnaround time even for multi-year backlogs ensures that the more throughput
  • The accounting practice was a secondary practice compared to tax practice for the client. This successful pilot has allowed the client to expand their accounting practice cost-effectively
  • Senior client staff are now increasingly focusing on high-value add services