Articles

Filing percentages showing improvement

Tax agents are getting better at managing their workloads says John Haylock, BankLink's Practice Performance Manager.

I’ve previously been critical of the overall performance of tax agents with respect to getting their tax returns filed on time.

For example in a June 2009 Journal article I noted that: “Extension of time is a huge privilege for tax agents in this country. Yet the performance of many tax agents against their filing targets has been poor.”

At that time the percentage of tax returns filed through tax agents by 31 March had flatlined for several years at around 92 to 93 percent. This is considerably lower than the Extension of Time target of 100 percent.

The good news is that over the past two years there has been a considerable improvement with particularly strong performance to 31 March 2011. This year 95.80 percent of tax returns were filed by 31 March. This followed an improved 94.79 percent the year before which was then the best result achieved since 1996.

When looked at over the longer term the trend now appears encouraging.

There are probably a number of factors at play here.

1. I understand Inland Revenue account managers are placing more pressure on under-performing practices to improve their performance.
2. Tax agents are managing their work better. Awareness of workflow management best practice has improved signifi cantly in recent years along with access to better workflow tools.
3. The weaker economy since 2008 has helped reduce pressure on tax agents. The growth rate of new businesses has slowed at the same time as the demand for other services supplied by agents has slackened. A weaker job market has also meant it is not as hard to fill vacancies as it was from 2005-2008.

While 95.80 percent of returns filed is an improvement it is still short of the 100 percent legally mandated target. One hundred percent of returns filed on time is possible.

The keys to achieving 100 percent returns filed on time remain the same as they have always been.

• Select your clients carefully. You can’t file returns for clients who won’t supply you with information on time. You are better off without these types of clients.
• Ensure you have good training for your team and consistent systems for them to use.
• Prepare a capacity plan. Tax agents are very fortunate in having a relatively predictable flow of work. This means there is the opportunity to match your capacity with your demand and be aware of issues as far in advance as possible. This means that you can take action if you have a shortage of capacity.
• Ensure you are getting good quality information from clients and check it thoroughly before jobs are started. Encourage your clients to use systems that are appropriate for their level of accounting ability.
• Turn each job around as quickly as possible. In particular, focus on minimising opportunities for jobs to be held up and on keeping your number of open jobs at a minimum. Monitor the jobs at query and at review very carefully.
• Plan to achieve your 100 percent returns filed well before 31 March. Despite your best management things will still occasionally go wrong. You need spare capacity to be able to handle the unexpected. Don’t leave it to the last moment.

Making these sorts of improvements won’t just help you achieve your filing targets. Getting through your work quicker will delight your clients. It will also make your practice a better place to work and a more successful business.

This article first appeared in The Journal. It is reproduced with the permission of the NZICA.