regroupTAX: Principles of Tax Workpapers

WORKPAPERS

B Y R E G R O U P T A X

P R I N C I P L E S O F T A X

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IntroductionTwo CPAs with 15 years + publicaccounting experienceStarted company in 2012 thathelped tax pros scale theirpractices by providing key dataentry servicesIn 2016 launched SaaS basedtax workpaper app (regroupTAX)designed to increase efficiencyand workflow procedures

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34%THE TOP

CONCERN FORFIRMS OF ALL

SIZES

WorkflowEfficiency

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AGENDATypes of Workpapers: Ind. vs. Bus.

6 Principles of Good Workpaper Techniques

Other Tips/Tricks to Maximize Efficiency

Questions

Short Demo

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POLLNG QUESTION #1

What does your current practice look like?

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S T A N D A R D I Z E DF O R M S

basic set of low-levelfunctions can be completedfor each return and everyworkpaper file looks thesame

V A R I O U S F / SF O R M A T S

different formats make itdifficult to shift tasks andeffectively create aworkpaper file that'sconsistent across the board

INDIVIDUAL vs BUSINESS

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Average tax preparation fee for

a typical individual return

(1040)

Average tax preparation fee for

a typical business return

(1120, 1120S, 1065)

$273 $743

Business returns = more room for profit

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1. DEVELOP INTERNPROGRAM

2. OUTSOURCE DATAENTRY

3. UTILIZE TECHNOLOGY

COMMONGOAL:

Shift low-level tasks to interns;let them scan, organize andinput info

Onshore and offshoreoutsource options;GruntWorx, SurePrep, etc.

Most tax software offer anOCR add-on that will scan andpopulate; ProSystem fx Scan,etc.

Eliminate data entry and createconsistent workpapers at asignificantly low price

INDIVIDUAL TAX RETURNS

increase workflow efficiency

ways to increase efficiency

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A C C O R D I N G T O

I N T U I T , E A C H

B U S I N E S S R E T U R N

T A K E S 5 . 1 H O U R S

O F D A T A E N T R Y

5.1hours

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BUSINESS TAX RETURNSways to increase efficiency

GOODWORKPAPERS!

Requiring extensive, organized and indexed working papers or PDF files may take about 20 minutesper return but can reduce the time it takes the preparer to actually work on the return by

approximately 50 minutes, and reduce the reviewer time by about a half-hour, resulting in a net gainof one hour per return. For a workload of 400 returns, this can save the equivalent of one fulltime

person during tax season.10

BE CONSISTENTP R I N C I P L E # 1

Design a set of techniques that work for you and your firm

and stick to them.

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SAVE A COPYP R I N C I P L E # 2

Before you even think about making adjustments to the

financials, save a copy of the Balance Sheet and Income

Statement as received from the client or their bookkeeper.

"PBC"


DESIGN AN INDEXP R I N C I P L E # 3

Designing an index system along with a set of workpapers

required for every return allows you to standardize the prep

process and eventually delegate low level work to staff

and/or interns.


POLLNG QUESTION #2

What is your role within your practice?

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AJES ONLY!!!P R I N C I P L E # 4

If you go into the QB or Xero file and start changing

transactions, you are going to lose your trail and create an

extremely frustrating situation for yourself. By recording

everything as an adjusting entry, you create a nice trail and

give yourself the opportunity to present the changes to your

client, an auditor, a partner at the firm, etc.


TOP 3 CHECKLISTP R I N C I P L E # 5

Come up with the first 3 steps you take on every return.

Need some suggestions??


CHECK .CHECK .CHECK .

does retained earnings match prior year return?

are the financials complete through year-end?

does the balance sheet tie to the income statement?

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LEVERAGE TECHP R I N C I P A L # 6

There are plenty of software programs designed to reduce

inefficiencies. Each has it's pros and cons.


Leveraging Technology toEnhance Client Service

THE PCPS CPA FIRMTOP ISSUES SURVEY

2 0 1 1 - 2 0 1 5

Top 10 Issue:

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OTHER TRICKS...Prior year file

Book-to-tax reconciliation

Fixed asset detail

Referencing

State tax detail + estimated payment schedule

Tax-related questions

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PY FILEMake it a habit to quickly review the prior year file before you

begin tax prep for the current year. This will give you a

roadmap of what's going on with the client.


BOOK-TO-TAXPaint a clear picture of how you moved from the book

financials to the tax return. Use this reconciliation to explain

the tax return to your clients.


FIXED ASSETSTie out the depreciation schedule to the assets on the books.

Make sure your client confirms any assets that are no longer

in use or have been disposed of.


REFERENCEReference determinations you made on the tax return. We

recommend to To/From system.


STATE TAX + EST.Avoid future notices by confirming the state taxes and

estimated taxes paid during the year.


TAX RELATED ?'S

W W W . R E G R O U P T A X . C O M

Brainstorm with your staff before tax season to compile a list

of taxrelated questions to ask every client.

Think new credits, etc.

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POLLNG QUESTION #3

What product do you currently use for business workpapers?

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C O N S I S T E N C Y I S K E Y

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CREATE YOUR OWNWORKBOOKS

Use the off season tocreate an excel workbook

and setup each client'sfinancials + formulas.

EMBEDDED ORENGAGEMENT

Most tax software offerembedded functions and

addt'l engagement softwarefor purchase.

TAX WORKPAPER APPS

Apps that are designedspecifically to create tax

workpapers allow for flexibilityin acctg/tax software choices.

Recommendationsfor consistent workpapers

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PROS CONS

Excel Workbook

-Low Cost

-Minimal Training

-Customize Reports

-Significant Setup Time

-Human Error

-Manual Upkeep

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PROS CONS

Embedded Functions

-Integrates w/ TaxSoftware

-Minimal Data Entry

-Familiarity

-Lack of Updates &Maintenance

-Inconsistent Output

-Future Conversions

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PROS CONS

Engagement Software

-Integrates w/ TaxSoftware

-Minimal Data Entry

-Familiarity

-High Cost; Difficult toImplement Firm-Wide

-Designed for Audit

-Future Conversions

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PROS CONS

Tax Workpaper Apps

-Software Neutral(Acctg + Tax)

-Implement Firm-Wide; Consistentcy

-Low Cost

-No Direct Integrationsw/ Tax Software

-Web-Based: Pro orCon?

-Breakeven

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UTILIZE TECHNOLOGYCONC L U S I ON . . .

82% of top 100 accounting firms tie new tech toclient retention and firm growth

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T H E B E N E F I T S

WWW . R E G R O U P T A X . C O M

"The value of technology is best seen in its ability to automate routine orotherwise manual processes. What does this mean in practical and beneficialterms for your firm and clients? The consulting firm McKinsey anticipates thatautomating work processes that used to be done by human labor will allow moremeaningful work as routine or repetitive tasks are replaced."

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POLLNG QUESTION #4

Of the following issues, which is most pressing for your

practice?

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D E M O

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RECAPGOAL

-Increase Workflow

Efficiency

HOW

-Consistent Workpapers

-Utilize Technology

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Automating or even eliminating mundane or routine taskslike manual data entry with computers or software programs

frees up employees’ time to actually use their brains forthings that computers or software programs can’t do, like

utilizing their creativity.

• • •

N I C K L O W E N S T E I N ,

D I R E C T O R I N S A G E W O R K S ’ A C C O U N T I N G D I V I S I O N

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POLLNG QUESTION #5

What was the most valuable part of this webinar?

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thank you.

Rachel Gregg, [email protected]

Emily Dear, [email protected]

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