Rick Telberg

Tax Season Off to Smooth Start

CPAs report fewer glitches, improved business results. Benchmark your business; join the busy season survey.

March 10, 2008
by Rick Telberg/At Large

Despite last-minute changes to the tax code and an emergency economic stimulus package … despite critical staffing shortages and late or unprepared clients … despite all that, busy season 2008 appears to be going better and smoother for most accountants. So far, anyway.

In my soundings of the profession, CPAs are generally telling me that they are less harried and that business is generally as good or better so far this busy season that it was for the same period in 2007.

In all key gauges — revenues, profits, volume and stress — accountants are reporting a smoother, better and healthier "busy" season.

Through last week, about one in four (24%) respondents reported the highest levels of stress. That's a lot of stress, to be sure, but it's seven points less than the 31 percent who reported the most severe forms of stress during the same period in 2007.

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At the same time, only one-third (34%) of CPAs are reporting that business operations are running "worse than last year," which is down from 41 percent a year ago.

Less stress. Better business. What's to complain about?

How this? Reports of late (and unprepared) clients are surging to 44 percent (from 34% last year), and staffing shortages still afflict about half of all the accounting offices in the survey. But it appears that problems with tax code changes have dropped by half, down to 16 percent from 32 percent of our sample last year — notwithstanding this year's last-minute changes to the Alternative Minimum Tax (AMT).

And key business benchmarks are tracking strongly for 2008. For instance:

  • Total revenue — 60 percent of accounting offices are reporting improvements in the top line this year. That's about comparable to the same period last year.
  • Net profit — Up at 63 percent of offices, which is five percentage points better than a year ago.
  • Number of clients — Up at 63 percent. Comparable.
  • Number on extension — Up at 24 percent. Again, five points higher than last year.
  • Revenue per client — Up at 61 percent. Unchanged from a year ago.
  • Profit per client — Up at 55 percent. Again, comparable.

To be sure, things are not going as well as accountants had hoped during the pre-season warm-ups. Last fall when we were asking what accountants were expecting this year, the optimists outnumbered the pessimists by about four to one. But true to form, once the season is under way, the number of accountants reporting better, worse or unchanged conditions evens out. Once the season is over, most accountants are willing to say it was satisfactory.

So, the fact is, few accountants have much to complain about this year.

But try to tell that to the one in four accountants who are facing their own busy seasons from Hell. What's to complain about? Plenty!

For instance (and in their own words):

  • "Amount of work, pressure from clients, staff issues."
  • "Too many people talking to me at once."
  • "Demanding clients and constant interruptions from inexperienced staffers."
  • "Too little time and too much work."
  • "Too many e-mails."
  • "Too many client meetings that eat up work time, with lots of returns coming in by mail, too."
  • "The demands of the crazy partners."

Some problems, of course, are good problems to have. Too many clients? Too much work? Some of us may dread this time of year, but few of us would trade it for anything else.

So hang in there. You're entering the home stretch. Only 36 days left. And counting.

HOW'S YOUR TAX SEASON: Join the survey. Get the benchmarks.

COMMENTS: Questions, rants or raves? Send comments to Rick Telberg.

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About Rick Telberg

Rick Telberg is editor at large/director of online content.

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