Tax & Accounting Blog

Client Data Collection—The Fallout of Bad Process

Accounting February 16, 2016

As clients clamor to meet tax filing deadlines, the pain of collecting client data is at a fever pitch for accounting firms this time of year. Clients send us documents and paperwork in a variety of ways—at best, disconnected emails and portal uploads; at worst, shoeboxes filled with paper (the horror!).

What does all of this inefficiency do to your accounting firm? You lose time, your relationships break down with your clients and ultimately, you lose money (ouch). Ensuring you have an efficient process for data collection from your clients is key to cutting these issues off at the pass.

Lost Time

How often do you or your staff run around collecting client documents during tax season? That W-2, those receipts, bank and mortgage statements—the list is endless. Your clients struggle to gather the necessary documents from their vendors and get them to you in a timely manner. You’re constantly reminding them, directing them, coaching them through the process—only to have missed deadlines and work pushed back, making your tax season more stressful.

Relationship Breakdown

It is very easy for the relationship to break down between you and your client during tax season. Clients are not the experts here, but are often treated as such. What documents to keep? How to submit them? Where to get them from? What format? It’s all very confusing to the client and tensions can quickly run high when expectations aren’t set and met, as well as when guidance is not given. Does your firm have a ‘best practice’ approach to client data collection, so that everything is very clear and consultative?

Lost Revenue

Ultimately, your accounting firm’s bottom line suffers when client data collection is a struggle for all parties. Lack of efficiency and wasted time means billable hours down the drain. Frustration and relationship breakdown can lead to lost clients, or clients not expanding their business with you. If you had a more automated way to collect data from clients, couldn’t you be spending more time offering valuable services to your client?

Take the time this tax season to evaluate your data collection process as you go along. Where do processes break down? Where are you losing time? Where are the tension points between you and your clients in this process? How can you make the process more efficient and a win-win for your firm and your clients?

This article from AccountingWeb digs deeper into the topic of data and document management and the items you should be analyzing to ensure you have a sound process in place.

Don’t forget that your client is part of the picture as well and needs processes to be efficient and amenable to them; include them in the analysis process.

We would love to hear from you what your biggest pain points are with client data collection or your thoughts about the process. Please comment below.