Randolph Johnston
Randolph Johnston

Improve Tax Tracking

How to develop a workflow system for tax offices.

November 16, 2009
by Randolph Johnston, MCS/MCP

“Why change the way the office tracks tax work through the office? Isn’t the manual system better? If it ain’t broken don’t fix it!” I have heard these and many other sayings over the years and it never surprises me, because accountants, like many of us, don’t like change. If you are using a manual system or your tax software as a workflow system it is time to review how much your current workflow systems are costing you. Lost time, low productivity, failed promises and the risk of not filing on time are some of the costs.

This article will look at why developing a workflow system and using automation software could make a $10K+ difference in your profits in just one year. It will also look at the inherent benefits of a well-defined automated workflow system. To understand these benefits let’s first look at the pitfalls of using a manual tracking system or your tax software alone to track workflow.

Manual Systems

Here are some of the problems with manual systems:

  • Once a file is received it potentially falls into a “Black Hole”;

  • Staff do NOT always update route slips correctly as the file moves through the office, thus inaccurate information exists with the file;

  • No reporting or statistical information is available with manual systems, making productivity impossible to measure;

  • Time is tracked manually or not at all; and

  • Client documents are accruing in file cabinets causing increased time in retrieval and lost productivity when looking for information.

Using Tax Software for Tracking Workflow

A good automated workflow system can eliminate these tax-tracking problems. Not only are manual systems costly, but the wrong use of existing software can reduce productivity and profitability. Do you know how many times I have heard, “I use my tax software to know where something is or when it is due”? This may be great for tracking E-file transmission or acceptance but should not be confused with a workflow system. Each year I hear “Last year we missed a deadline for one of our clients. Do you have something that can help me never miss a deadline again?” Tax systems, while convenient for simple tracking, break down very quickly and lack the full potential of workflow systems. Here are some problems with using tax software to track workflow:

  • They are especially inefficient in offices with more than one staff;

  • Tax software doesn’t allow easy delegation and accountability;

  • Does not warn or remind staff of pending due dates;

  • Lack of integration does not track other due dates like notices, audits, payroll and sales taxes; and

  • Breakdown in cohesive information can be costly unless a truly integrated process is used.

Workflow Automation

To automate your workflow you must first map your existing processes, identifying when tax work arrives and the steps you take to move it through the office. Be sure to map out every step and pay special attention to the steps that are not working effectively. This is a great opportunity for you to make changes to the processes in your office. When mapping the steps, take into account any special locations and instructions needed. Below is an example of basic tax workflow steps:

Receive Copy/Scan Input Preparation Missing Information Review Print/Assemble; optional scanning Sign Invoice Contact Client Deliver E-file Complete

Once you have the new workflow defined, then it is time to look at systems that allow for complete control, automation, delegation and accountability. While some of the benefits of an automated workflow system are obvious the biggest one is saving time. In many cases, I have seen an office of three to 10 staff eliminate the need of one admin person and in some cases the savings have been greater than $10K.

More Benefits

Other benefits include:

  • The physical location of the file and tax return is always known;

  • The status of the file, tax return, and it’s due date is always known;

  • Time tracking for payroll as well as billing is available;

  • Statistical information is available for performance, productivity and profitability; and

  • Files are stored electronically and easily accessible.


If a truly automated tax workflow system is implemented the results will be phenomenal. You’ll wonder why you ever held on to the manual systems in the first place.

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Randolph P. Johnston, MCS/MCP, is executive vice president at K2 Enterprises. He is a nationally recognized educator, consultant and writer with over 30 years experience in strategic technology planning, systems and network integration, accounting software selection, business development and management, disaster recovery and contingency planning and process engineering. Please note the views expressed in this article are solely the author’s and in no way reflect the views of the AICPA or CPA Insider™.