According to Albert Einstein, one of the brightest minds ever seen, the hardest thing in the world to understand is the taxes. And it is rightly so. With the changes and additions in the tax laws year after year, it becomes a challenge to the unversed to tackle taxation. The pandemic has further complicated the tax filing and assessment. The extension given to deadlines is a respite. It may backfire if a good action plan is not in place.
It is common knowledge that there are several challenges in front of an accounting firm. Despite all these, the utmost aim is to provide error-less, top-notch quality service to its clients. The awareness of the different hurdles is the first step to finding the best possible solutions. Some of the significant issues are:
- The amendments in the taxation laws
- The evolution of new business models
- Upgradation of technology
- New accounting automation
- Need for skilled employees
- Meeting the deadlines
It is necessary to address these issues to improve the overall operational efficiency during the tax season. Every accounting firm adopts some practical tips and techniques to combat such situations. Or, in simple terms, like oil to a rusted lid, this help go through the tax season with more confidence.
Tips to smooth sail through tax season 2022
As mentioned before, tax season is a trying time for an accountant. So is the fact that it is the most revenue-generating time for an accounting firm. Every accountant is ready to go down the rabbit hole, equipped with some strategies to face daunting tasks.
- Getting organised by having effective communication with the client
More often than not, the chaos during the tax season is a consequence of procrastination and a last-minute hassle to meet the deadlines. It can adversely affect the process efficiency and may affect the quality of the end product. This will be in the best interests of both the service provider and the end-user to start the processes well ahead of the deadline. And is possible by having effective communication between the two.
- Making a list of necessary documents needed
The mandatory documents required for filing the ITR is not the same for a salaried individual, a business person, or a business itself. There is every possibility of not fulfilling the complete list in the last-minute rush. It is essential to have a checklist with the clients to ensure every document is in place. Say, for example, a business must submit TDS challans, balance sheet for the current financial year, challans for the income tax payments, and other documents like audit reports, if applicable. It gives a clear picture of what matters for a seamless filing of ITR.
- Keeping abreast of the changes in the taxation laws
The taxation laws amend or change every year as per the national budget or financial goals set for the country. It is fundamental to keep abreast of the changes to avoid filing a wrong ITR. Although an erroneous filing of ITR is rectified by filing a revised return according to section 139(5) of the Income Tax Act, it is certainly a waste of time, effort and money.
- Periodic checking to meet the deadline effectively
It is not wrong to say that the global pandemic has changed the ways of the business world. Many lost their jobs or underwent a salary compromise. This sense of uncertainty affected the filing of tax returns as well. The authorities have extended the deadlines to provide relief during these unpredictable times. It is pivotal to know the deadlines or their changes in any circumstances.
- Making use of technology and automation in accounting
Though there are two warring opinions about whether technology and automation in accounting is a boon or bane, it is a fact that it is well-blended in today’s business world. The emergence of new business models is, to an extent, the result of technological advancements. The benefits of incorporating technology are many. It improves data accuracy, helps in fast data retrieval, heightened information security and anytime cloud accessibility. So, it saves time and enhances the efficiency of the system.
- Upskilling the employees
Along with the pressure of meeting the deadlines and maintaining the quality, it is of prime importance to have the whole team on par with the changes in the taxation law. As mentioned before, today’s business world integrates technology and automation for easiness and better efficiency. Periodic training of the staff is paramount to delivering the best quality service to the clients.
- Retaining the headcount
One of the dreaded situations for an accounting firm during the tax season is the mind-boggling amount of work vis-à-vis the number of heads to manage it. It is relevant for the service provider to maintain or add employees according to the need of the hour.
Filing an income tax return is most certainly tedious, but it has various advantages, as well. The many benefits of ITR include its role in securing a loan, claiming Tax Deduction at Source (TDS) refunds, applying for visas, etc. The highly dynamic world of taxation requires an expert hand to help the uninitiated.
Out of the many working practices, the team at Diligen values timely completion and delivery of quality work at the top. They work in concurrence with the client to achieve this.