Surviving the Second Busy Season Scaries
Between late documentation and procrastinating clients, it’s no wonder the April tax deadline is ghastly. But why does a second busy season haunt CPAs in October?
By JEFF STIMPSON | Fall 2019
The six months between Tax Day and fall pass sweetly enough:
slackening of the brutal hours, some time to clear the desk and
the mind, evenings to spend with almost-forgotten family and
friends, longed for summer vacations. But despite a whole year
before the next April 15 tax deadline, the pressure soon begins to
build again. Extended tax returns, a salve for CPAs stretched
thin leading up to the April filing deadline, lurk in the shadows of
spring and summertime fun.
Preparers attribute the scaries of a second busy season leading up
to the October tax extension deadline to two keystones of human
nature—procrastination and avoidance.
“The sense of urgency for all parties goes away after a tax return
has been extended,” says Illinois CPA Society member Ben Ralston,
CPA, director in the Chicago office of CBIZ MHM.
“It’s easy for staff, managers, and clients to deprioritize extended
returns,” says Neil Keller, CPA, ABV, CVA, tax partner-in-charge in
the Milwaukee office of Sikich LLP. “Things get put off until there’s
a more looming deadline.”
“You have a few other things happen after the first tax season,”
adds Illinois CPA Society member Mark Dalbey, tax principal in
CLA’s Peoria, Ill. office. “A lot of younger staff have kids who get out
of school around that time and you’ve got a lot of pent-up demand
for vacations. You almost lose the whole month of June. Then
you’ve got holidays like July 4, and we’re finding that any time you
get a holiday in the middle of the week, people tend to take the
whole week off. This all compresses the time frame.”
While burned out CPAs savoring spring break and summertime fun
certainly contribute to a compressed fall busy season, they surely
aren’t solely to blame.
“Generally, the extended tax returns are the complex ones, and tax
reform added to that complexity. With several technical issues that
need to be addressed, a lot of time and focus is put on coordinating
client information,” says Matthew Denman, CPA, MST, a partner in
the Schaumburg, Ill. office of Plante Moran.
In fact, the waiting game that’s played with clients and their third-party
documentation delays are prime suspects in the case for a
second busy season.
Illinois CPA Society member Jim Linehan, CPA, a sole practitioner
in Peoria, Ill., says clients often file late because they receive K-1s
or 1099s deep into the season. Clients used to get these
documents by the end of January. Now, delivery is often toward the
end of February. And yes, “some filers are procrastinators,” Linehan
adds. “If they know there’s an extension deadline in October,
they’re going to wait to get you stuff at the last minute. Staying on
top of procrastinators is the only way to remedy that.”
BUSTING THE SECOND BUSY SEASON
A second busy season is a burden on CPA firms and their staffs that
doesn’t come without risks. “A rushed return prepared in a
compressed time frame is a risk for the firm,” Dalbey says matter-of-factly.
From burnout to botched returns and client conflict, there’s
much to fear and be on watch for. But there are ways to put the
second busy season scaries to bed.
Keller, who has been working on an initiative to smooth out
workloads and better manage the second busy season, says the
best solution for clients that are the root of work not getting
completed is continuous communication.
Despite our high-tech age, Dalbey says “nothing’s better than
picking up the phone—it strengthens your relationship and the
contact becomes personal.”
Of course, direct, personal emails can also be very effective for
communicating what you’ve done for your client and what you need
from them. Dalbey recommends using progressive language
when clients need prodding: “In the first email, say you’re just
checking in. In the second, say you’re checking in again and ask if
the client can get the information in soon. In the third, say you’ve
received no response yet, and let the client know that if the
information isn’t in by a set deadline, you can’t guarantee getting
their return done by the filing deadline.”
CBIZ meets clients after the first due dates to “discuss the
expectation regarding the timeline for filing returns on extension,”
Ralston says. “One way to get a client’s buy-in for more timely filing
is to agree to a timeline where the client provides the missing
information well before getting deep into August or September. It is
important to follow up to make sure everyone sticks to the timeline.”
Setting milestone dates and making clients stick to them isn’t
always easy, so Denman offers a different tactic: “Create a fee-based
approach, offering clients a different fee schedule
depending on when they provide information. It’s important that
clients understand that if milestone dates are missed, it could
impact their fee.”
Another approach: “Over-communication can minimize the impact
of client delays,” Denman says. “Have regular meetings with clients
to make sure they’re aware and on top of the information they
need to provide. If they’re struggling to get information, these
meetings provide a great opportunity to guide them.”
“As accountants, we’re so scared we’re going to lose clients,”
Dalbey says, “but if you have a difficult client, you have to be willing
to have difficult conversations.”
“If a client continues to cause unnecessary delays, it may be worth
evaluating if they’re a good long-term client,” Denman says.
On the other hand, the importance of evaluating the morale of your
good long-term staff is easy to overlook when everyone in the firm
is busy, but CPA firm leaders should be as worried about losing staff
over poorly managed expectations as they are about losing
clients—and sometimes that requires difficult conversations as well.
“We set the expectation with staff early in the year that there will
be a second busy season in the fall so there are no surprises,”
Ralston says, “but we also offer summer hours between May and
July as a way to manage potential burnout.”
“In November and December, we ask staff to think about the
coming year,” Dalbey shares, explaining that CLA’s schedules are
built out by in-house, individual coaches who budget time for
chargeable hours, vacations, training, and volunteering well in
advance of crunch periods.
At Sikich, teams have weekly scheduling meetings to discuss which
clients they can work on and what can be done to move returns
along. “We’ve found that if you’re proactive from both the staff and
client perspective, you can, to an extent, smooth out some of the
work,” Keller says. “While you might not be able to completely avoid
a second busy season, you can make it much less daunting.”