COVID-19: Accounting firms are finding efficiencies amidst disruption

Ottawa-based business journalist Jeff Buckstein, CPA, CGA, has written two other series on COVID-19 for Canadian Accountant. Read the first article in the Coronavirus & Public Practice series, and the first article in the COVID-19 & Economics series.

OTTAWA – While social distancing has created many workflow challenges for Canadian accountants, sole practitioners and small to medium-size accounting firms are finding efficiencies amidst disruption. Fewer informal conversations with clients and more time for tax and financial statement preparation has proven to be more efficient. 

Jason Kingston, a principal with DSK LLP in Kitchener, Ont., has found that there is less disruption to the workday. “You always get people who are just dropping items off, but they also have that one quick question that requires a staff accountant or even a partner to get involved. That’s disruptive to our day,” he says. “As much as we, for the most part enjoy talking with our clients, during tax season you don’t necessarily want to have what could be a five-minute meeting turn into a 20-minute catch-up session. 

“I find — especially on video chats and even on the telephone — clients are much more likely to just want to talk about their specific questions and then be done, versus if they were coming in for that meeting,” Kingston adds. 

But among the inefficiencies he has noticed, administrative staff are spending more time walking clients through DSK’s online process, using either DocuSign or the company’s portal system to access their documents. 

“I think it’s probably a little less efficient dealing with purely PDF than maybe it is having an envelope of paper slips dropped off, because the electronic forms are uploaded to the secure file server, and then that needs to be transferred to our internal server. The preparer has to go and open the PDF, solve the PDFs, mark them up, or whatever the case might be,” Kingston explains. 

No substitute for working side-by-side

Steven Flynn is a partner with Andersen Tax LLP in Vancouver. “With the exception of some of the clients that aren’t as technology savvy, we haven’t noticed a huge change,” says Flynn, who notes that, compared to a traditional tax season, doing those tasks electronically has worked fairly efficiently. 

Within the office, when all staff is present, “it’s easy walking around the halls to check in with staff, or managers, and they can come and see you,” says Steven Flynn, a partner with Andersen Tax LLP in Vancouver. “Today, we have to be more proactive and mindful that we’ve got to reach out and talk to people every day. We’ve got to find a reason to call or get them on a Zoom video conference to discuss a file or situation — whatever it is. But also to see how they’re doing,” says Flynn. 

There is, he acknowledges, no substitute in terms of efficiency for working side-by-side with a staff member when, for example, searching through Canada’s Income Tax Act for a specific section or searching the U.S. Internal Revenue Service Code. But under the circumstances presented by Covid-19, sharing screens electronically to try and carry out those same tasks is a necessary alternative that everyone tries to do their best with. 

Another advantage of a face-to-face interaction, says Flynn, is that a supervisor can seek facial cues and body language of staff or clients to determine comprehension and whether there are follow-up questions, or whether something might have been missed, or if there is disagreement. A video conference at least allows a person to be seen. But other alternatives are harder, such as when a conversation is taking place on the phone or, even worse, an email in which the other person can neither be seen or heard, he notes. 

Where client inefficiencies arise, it is because clients are having trouble getting the documentation required for their tax returns either due to delays or lack of access, says Flynn. However, that disadvantage has been alleviated somewhat because the extended tax deadlines in both Canada and the U.S. have reduced the timing urgency, he adds. 

“I think some of the inefficiencies probably come from clients having their lives turned upside down, like all of us. They’re trying to figure where their business is going. They’re trying to get their kids to do online schooling. They’re trying to take care of their elderly parents. Taxes are a low priority right now,” Flynn says. 

The stop-and-start nature of picking up and putting down files again is another inefficiency. By the time Andersen Tax is able to examine the client information it receives and compile a list of follow-up questions, the client may have already moved on to something else, so there could be a significant time gap before contact is made again, notes Flynn. 

Workflow taking longer during pandemic

Catherine Barrie, a sole practitioner in Barrie, Ont., notes that, compared to a traditional tax season with in-person meetings, the process this year is taking much longer. 

“I had thought we would be more efficient if we were not seeing clients face-to-face but it isn't working out that way. It's more difficult for people as there is a change in the normal process. Many of them require much more attention on the telephone than they would have needed in person. Many people are already operating at a much higher anxiety level than normal and dealing with taxes is just one more stress,” she explains. 

Furthermore, explains Barrie, “I seem to be spending a majority of my time on the telephone. The most worrisome thing is that it is taking us so long to get the work turned around and people have been waiting for longer than usual to get their work completed. I think this is typical for all businesses, as it takes longer to shop or get any type of service right now, but hope the longer time doesn't frustrate clients,” she explains. 

“However, all things have been unusual this year,” Barrie notes. “I feel like I have spent the past three or four weeks speaking with everyone about how the government subsidies work and how they apply for them. It's been a little frustrating because we didn't have any more specific or earlier information than what was in the news, yet clients felt we should know everything and be able to advise them. We've had to do a lot of ‘wait and we will let you know when we figure it out,’” she adds. 

Given the slower speed at which things are moving, it feels like the firm is working as hard as ever, but has so far only been able to file about half the number of returns as last year due to the extra phone calls and e-mails required to go from step to step, says Barrie. There is also frustration at not being able to reach the Canada Revenue Agency with queries in a manner they would be able to during a normal tax season. And many documents are missing on the CRA website for importing compared to prior years. 

Documentation taking longer too

Then there is the process required to get the client signature which requires scanning in the documents and highlighting where to sign, sending the documents for review and signature, and then receiving them back prior to e-filing. 

“This can sometimes take a few telephone calls from the client, double checking where to sign, etc. We have different piles of files going, people who have signed but still need to pay, people who have paid but still need to sign, etc. We have researched and tried some different processes and software. They are either not working or too expensive for our purposes,” says Barrie. 

Nor do bankers and financial planners seem to be available to answer questions about client investments as per normal. Moreover, some clients have not yet received their T4 slips, and there is nobody to contact about that at their place of employment, she complains. 

While the social distancing of Work From Home (WFH) practices are accelerating change through workflow efficiencies may come down to the type of practice and its workflow processes. In part five of this series, Canadian accountants will weigh in on whether their practice will change, post-pandemic. 

Jeff Buckstein, CPA, CGA is an Ottawa-based freelance business journalist. Image by Gerd Altmann from Pixabay.

This article is the fourth in a series on accelerating change in Canadian accounting offices. Read the full series in order:

Part One: COVID-19 is accelerating change at Canadian accounting firms
Part Two: COVID-19 pandemic promotes paperless public practices
Part Three: WFH: COVID-19 is accelerating remote work at accounting firms
Part Four: COVID-19: Accounting firms are finding efficiencies amidst disruption
Part Five: COVID-19: How SME accounting firms will change post-pandemic