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Discover a unique way to review the year in your firm

Will Hill, MBA  Product Manager — Tax Professionals Advisory, Thomson Reuters

Will Hill, MBA  Product Manager — Tax Professionals Advisory, Thomson Reuters

As Paul Miller and Will Hill have talked over the years about some unique things you can do at your firm, one unusual concept is to close your doors to the greater outside world the last week of the year to take some time to review processes. Most firms hear that and scratch their heads and ask three questions. One, why? Two, but how does the business survive? And three, would I survive if I did that? Here we will go through the reasons why and share some input and perspective to see if this could work in your firm. Are you running around meeting deadlines at the end of the year? Maybe next year you can plan to do something different.

In this episode of Pulse to the Practice, “A Unique End of Year Concept”, I was joined, as always, by Paul Miller, owner of Business by Design, to discuss his end of year review strategy of closing their doors for a bit. It seems impossible, but this unique concept may build a strong start to the new year and the next tax season.

Why take time to review the year in your firm?

Paul Miller started doing this in his firm about ten years ago. He mentions, “I just got really sick and tired of the end of year stuff. Anytime you give clients a deadline, they’re generally not going to come in two weeks before that deadline. Usually, it’s at that deadline. And so this end of year closing came into being because of all these different requests, and between Christmas and New Year’s, we’d be spending time doing all these things and literally working right up to New Year’s Eve.”

This concept of closing for a few days during the end of year holidays is about more than just giving staff extra days off. If you close your office to the outside world and work on things internally for a couple of days, you can catch your breath before the next busy tax season. This purposeful slowdown can give you time to focus on what you need to do and review your firm’s systems and processes. It’s a good time to tackle that ongoing list of things that you can’t seem to get done at regular times.

“To make this concept work, you have to make a concentrated effort to get out of that cycle of last minute deadlines at the end of the year. And so one year I experimented with this and I just said, If you can, send an email around October telling clients what your fourth quarter schedule is going to be and get your year-end review scheduled in that planning.” added Paul Miller.

How can you close the firm and still manage payroll?

One big issue that may come up if you decide to close your doors is if your firm manages payroll. With more modern software, however, this process is pretty automated. That’s one of those admin tasks that your payroll administrator is going to have to manage.  But you can still close to clients when it comes to taking phone calls or having meetings for a short time. It’s no different than when you close for the 4th of July holidays or Thanksgiving. The main thing is you have to find a way to not let the client run your business. You can’t let the clients dictate what days and how you’re going to operate.

One might ask what the client reception would be like if you closed your accounting office doors for a short time. How do you deal with clients who have end of year tasks? How many years of this pattern before everyone is “trained”? It might take some time for the clients to get used to this idea, but it is doable.

Paul Miller says, “We say this with clients. Let’s use the analogy of debits and credits, right? When you do something for a client that you go out of your way  to do, for example; you send me this panic email and it needs to be done in the next day. If I reply that I’m not at the office, but I choose to do something to help you out, now I kind of look at it like you owe me one. The next time something comes up where maybe it didn’t go as planned, we might balance that out. And let’s be honest, how many real accounting emergencies are there?”

Expect the unexpected when considering a closed firm review

In some cases though, you have to manage things differently. Two years ago when TCJA was passed the IRS announced a property tax issue where taxes were going to be limited the next year. You probably had a number of clients that had to prepay their property taxes at the last hour. That was just a rare exception where it was impossible to close the doors, but generally, you can work around the client’s needs. There are times when you have to jump in when something like that happens. The moral of the story is, firms don’t always take enough time to work on themselves and to do that you literally have to tell your clients that you’re closed to the outside world. Your administrative strength is the key to managing any surprises that might come up unexpectedly.

How to talk to clients about closing for a few days

As accountants in that professional service role, you may view a brief closure time as bad for your clients but surprisingly, your clients can relate and it’s about communicating it to them. You have to tell them why you’re doing it. Explain it so they understand that your firm has to work on its internal process for a few days to ensure policies and procedures are in place. Most of your clients will also take time to close their businesses during holidays.

Paul Miller suggests it’s not a bad idea to take some time off from clients somewhere around July as well as the end of the year. Even if it’s not a full day closed to clients, at least a half day could be used to make modifications to your firm’s processes. You can take even these short bursts of time with breaks from clients to ask questions internally and take stock in your processes as a firm. It’s a good time to take a view of your tax season and review after the end of April. By May, everyone kind of resets and summer is  a good time to look at your workflow inventory wise.

Re-center your staff before busy season

Another side benefit of doing these internal reviews before you’re about to head into a heavy sprint is that it helps your firm succeed through the next season better by taking just a couple of extra days to take a breath and re-center. When you’ve set your schedule for the whole year, you know what needs to happen. Once you get into January, you have to close out books. There are always 1099s and W2s to process. In January, there are deadlines for the first part of the month. Then you move to the second half of January, where you want to begin preparations to process early filing. When you get into February, you’re rocking and rolling when it comes to a typical year. If you’ve done your planning at the end of the previous year, you can be perfectly prepared for April and beyond.

Listen to the “A Unique End of Year Concept” episode of the Pulse of the Practice podcast on your preferred platform (Google Play, Apple, Spotify, Stitcher) or here.

 

 

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