Tax time in a post-COVID world
Face-to-face interaction is hardly an option during lockdown. Three practitioners reveal how they are interacting with clients during tax time in 2020.
Derek Parker | July 2020
For many CPAs in public practice, the end of the financial year is the most important time for their business.
However, the need for social distancing and contactless transactions due to COVID-19 has added a whole new dimension of difficulty for most, especially because tax compliance work has traditionally taken place on a face-to-face basis.
Some CPAs, however, have leveraged technology to develop innovative solutions for clients. It’s a process that hasn’t been easy for everyone, and many practices are working from the position of having taken a major financial hit in 2020.
Murray Wyatt FCPA, director and chairman of Melbourne firm Morrows, notes that ultra-tight margins have meant that there had to be staff reductions, and the remaining staff were working at reduced capacity. There was an early move to working from home for everyone.
For the next few months, he identifies uncertainty as a major issue.
“Now, the question is what happens when the government’s fiscal stimulus program ends,” he says.
“Will the economy fall off a cliff, or will the government stump up again? No one really knows. The challenge is to determine how it impacts our client population and therefore our practice fees.“There has long been a trend towards technology and a gradual move away from face-to-face contact as the first option. This crisis has accelerated that, driving the process through desperation and necessity.”
New systems in place to tackle tax time
Phil McCann FCPA, principal of McCann Financial Group, agrees. He adds that his practice, like many, provided advice on accessing government support without looking for full fee recovery to help clients through a very difficult period.
Now, with revenue under pressure for accounting practices and their clients, looming tax deadlines have required new thinking.
“We have traditionally been a face-to-face contact practice,” McCann says. “But we also have clients all over Australia and indeed the world, so we already had much of the needed technology in place.
“Most of our clients have been willing to make the switch, particularly our younger clients.”
McCann explains that the practice is conducting regular mail-outs by email to ABN holders and iForm clients, and setting up systems for telephone contact, email and videoconferencing.
“We have discovered Zoom meetings and various other types of tele/video-presence and on-screen conferencing,” says McCann.
“It’s good, but not it’s perfect, so you have to be prepared to do follow-up work.”
Sean Beasley, principal of a Gold Coast-based practice that bears his name, has also found that most clients, understanding the broad situation, are willing to communicate online, by phone, or with videoconferencing.
Unusually, revenue increased over the crisis period, which he puts down to the fact that his practice offers a wide range of services, and there was extra work connected to Jobseeker and grant applications. However, he notes that he would be ready to be flexible on payment arrangements if a client was having trouble.
“If they are in a difficult position, I’m not going to make it more difficult,” he says. “We all have an obligation to share the load.”
Beasley emphasises that even if the financial picture of his practice was not too bad, it has been a time of great strain, with all staff working from home. He has drawn on his CPA Australia network of colleagues for advice and support, which he sees as especially valuable in tough times.
Beasley believes that company leaders should acknowledge the difficulties, including isolation and family pressures, that working from home can place on employees.
“As a manager, you have to make clear that missing a deadline is not the end of the world,” he says.
“The ATO [Australian Taxation Office] has been very understanding, and there are no lives at risk on a late BAS!”
Making it easy for tax clients
An important step for McCann’s practice has been the development of a cloud-based Dropbox facility for tax clients.
“The client transfers their documents, which might be a year’s compliance papers, into their own Dropbox in the cloud, and then give us a time-limited “invitation” to access it,” he says.
“We can download the material from that Dropbox onto our server and then use it as our workpapers. When the process is finished, we can forward the draft return to the client as a PDF attachment to an email, with the tax file number deleted by our software for security purposes.”
He sees this as a process that is easy to manage, requiring little new IT expertise from clients.
Wyatt likewise believes that providing a convenient digitised experience for clients is a way of enhancing client relationships.
“Videoconferencing and the full digitisation of paperwork enhance the client experience, and we will retain it going forward, so it’s a question of how much it replaces face-to-face contact,” he says.
However, he is also aware of the need to improve efficiencies on the operational side.
“The past few months have turbo-charged the change management process with our staff. In the future, there will be a very different work environment, with more working from home and greater use of videoconferencing, both between staff and with clients. I suppose it is a matter of not letting a crisis go to waste,” Wyatt notes.
ATO gets the thumbs up
Wyatt, McCann and Beasley all applaud the ATO for its cooperation, concessions and communication throughout the crisis, and its website has been a useful source of information on assistance measures.
McCann notes that he has been part of a regular telephone hook-up with the ATO commissioners, other tax practitioners and professional bodies around the country.
“The sense of collegiality and cooperation in this incredibly difficult time has been wonderful,” McCann says. “The ATO deserves our appreciation for the lodgement arrangements it has put in place.”
As for the post-crisis future, the consensus is that there will always be circumstances where face-to-face contact will be required. Planning, liaison, strategic advice, understanding and reassurance are usually provided more effectively in face-to-face meetings, even if many other matters can be handled with technology-based tools. Older clients are often more comfortable with personal contact.
“And that’s the bottom line,” says McCann. “You have to be able to do both.”
Access all of CPA Australia’s COVID-19 resources.