Over half of firms outsource complex tax questions
Administered to staff working in public accounting firms of all sizes, the 2023 cross-Canada survey revealed that 52% of firms outsourced complex tax questions to a tax specialist. This 22% year-over-year rise in the number of firms leveraging outsourced specialists could be due to a lack of time.
Many firms have staff working at full capacity. They don’t have the time to research and answer complex questions or keep abreast of convoluted tax legislation changes. One survey finding supports this: only around 34% of respondents spent a significant amount of time answering tax questions from staff.
Meeting the challenge: outsourcing is a common practice that many firms leverage. However, firms need to ensure that they have a solid process in place to ensure that there’s no impact on the client experience and they can track the status of any outsourced work. A two-part plan needs to be implemented for firms who want to bring these advisory services in-house. Part one includes improving capacity and reducing unnecessary manual labor on existing staff, while part two requires firms to recruit talent with solid tax expertise to build their internal knowledge base.
Most teams are up to speed on tax issues and updates impacting returns; there is still room for improvement.
On complex matters, firms were in much better shape. 82% of the respondents stated that their team was up to speed on all the tax issues and updates impacting their returns. Yet just over 65% of firms said they found it easy to get answers or explanations on tax topics they weren’t familiar with, seeming to indicate they would benefit from having tools on hand that would put tax information at their fingertips.
Similarly, over 75% indicated their process for researching and documenting tax filing positions worked well, which means that one-third of respondents would benefit from research and documentation process improvement.
Meeting the challenge: some of the struggles highlighted by survey respondents in this area can be solved by taking steps to improve existing processes. However, this doesn’t solve many underlying issues that firms have struggled with, such as staffing and retention issues. Implementing powerful tax research and workflow tools could help bridge capacity gaps and help firms progress on their growth plans.
Once again, the issue could be addressed by implementing powerful online tax research tools.
Learn more about other topics in the report.
The 2023 survey also examined the remote working, staff management, client service, and workflow and technology challenges our country’s accounting professionals encountered during tax season.
Download the Industry and Tax Season Challenges Report to read about each of the topics.
