8 Tax Preparation Related Challenges Faced by CPA Firms


8 Tax Preparation Related Challenges Faced by CPA Firms

The work of CPA business organizations is very complicated and needs to be accomplished with utmost seniority and professionalism. The work of accounting companies varies from simple bookkeeping to challenging tax preparation services. Additionally, with the advancement of technology, the work environment of CPA organizations has dramatically changed.

The complication of the taxation process has generated numerous challenges for accounting firms which they have to overcome regularly to satisfy their customers. Some of the CPA firms have been already using the outsourced tax preparation services to overcome the challenges of the taxation system. Below are some of the challenges faced by CPA tax preparation services;

Taxation Challenges faced by Accounting Firms

Accounting companies have to prepare taxation reports for their clients very carefully after following all the local rules and regulations. Apart from this, there are a series of challenges that CPA firms have to face, such as –

#1. Challenge of Handling Rush Season

The USA tax return for the period ending in December needs to be filed by the 15th of March (for corporates) and the 15th of April (for Individuals) of the next calendar year. It means CPA firms have to prepare tax reports for their corporate client and submit them within only two and a half months. Moreover, all individual tax returns need to be filed within 1 month of the deadline for corporate returns. This becomes very hectic for accounting firms to manage tax preparation with their regular workload while making sure that their CPAs won’t feel overwhelmed with the workload.

This challenge of CPA firms can be pretty easily resolved by using outsourced tax preparation services for your business. Accounting firms can delegate their tax burden to outsourcing accounting companies and deliver the best services to their clients.

 #2. Challenge of VAT Collection

The cross-board sales made by the client makes it difficult to evaluate the VAT. This gets even more difficult when the exchange of goods and services involves vendors or customers from abroad. Moreover, the concept of online shopping has made VAT calculations even more dramatic. It is a challenge for CPA firms to evaluate the VAT amount of their clients after applying all the international and national norms and filing the tax before the due date.

#3. Challenge of Different State Tax Rulers

The USA is a very vast country with 52 states and each state has slightly different tax preparation rules both for Income Tax and Sales & Use Tax. Plus, these days most business organizations are involved in multi-states transactions so it is the responsibility of accounting firms to follow local rules before preparing tax reports and that can be a tricky job.

To manage the problem where the customer and supplier belong to different jurisdictions, it becomes highly challenging for accounting firms to handle tax preparation services.

#4. Challenge of Keeping up with Changing Tax Policies

This is a very common challenge that CPA firms have to face as the government keeps on improving the tax policies for the betterment of people and tax preparation ratios also keep on changing. In this, it becomes highly critical for accountants to keep up with the changing taxation policies to deliver accurate tax reports to their clients. However, it is difficult for accounting firms to keep a tab on the latest taxation trends while handling their truckloads of other work.

Again here outsourcing taxation services is going to be a great solution for CPA organizations as they have designated a team of accountants who always monitor the changing tax policies both nationally and internationally.

#5. Challenge of Managing New Business Models

With the introduction of digital technology, the traditional business models have been replaced with new digital business models like eCommerce business, online submission of returns, etc., The new business models have made it difficult for accounting organizations to train old staff for new systems. Plus, tax complications increases in the new business models with the availability of new technologies like 3D printing and much more.

So, accounting firms need to have staff that can manage all the complexities generated by the new business models which is quite difficult for small CPA companies to acquire such a versatile employee strength.

In this case, tax preparation outsourcing services work for Small CPA firms who can’t afford to hire new people or train existing people with changing business models.

#6. Challenge of Satisfying Clients

Every client has different requirements and business structures which makes it very difficult for accounting companies to satisfy their clients. It takes lots of effort and research to satisfy a client. If one client isn’t satisfied with your taxation services, then he will leave a bad review of your company and this will takes numerous clients with it.

CPAs have to work very hard and evolve different methods to satisfy their clients and one of the easiest methods for CPAs would be outsourcing professional services like tax preparation.

#7. Challenge of Coping with Technology Efforts

In a recently conducted survey, it is concluded that two-thirds of CPA tax preparation services suffer because of technology challenges. It is very difficult for CPAs to find a correct balance between the changing technology and client expectations.

CPA firms have to keep up with the changing tax preparation technology and provide training to their staff to use the new technology. Moreover, technology keeps on obsolete very quickly so it is very challenging for CPAs to find a solution to this problem.

#8. Challenge of Retaining Employees’ effort

Just like every other business organization, talent acquisition is a very crucial problem for accounting firms. The task of tax preparation requires an optimum level of expertise. But, due to the cut-throat competition in the accounting firms, it gets very complicated for organizations to retain good tax-preparing staff who is fully competent to handle the tax preparation services.

For this accounting firms have to create a strong brand image and have to offer lucrative benefits to their staff. However, if you are not in a position to offer extra benefits and a large salary to your tax staff, then outsourcing tax preparation services is one ideal option for you.

After carefully reading the challenges faced by CPA firms, one thing has been concluded the solution for many challenges is hiring outsourcing tax preparation companies and benefiting your accounting business. There are numerous tax preparation companies available, but you should choose which offers highly trained tax experts, the latest technology tools, and advanced services. CapActix is one of them.

Our taxation services are highly modern and technical to handle the workload of any business model. We follow the latest taxation policies and always keep a tab on the changing tax trends.

To acquire our tax services, you can contact our team by email – [email protected]. or can calling on +201-778-0509.