Modernize and virtualize your tax practice: Part 1

By Brandon Lagarde, CPA, J.D., LL.M., and J. Raleigh Cutrer, CPA/PFS/ABV

Editor: April Walker, CPA, CGMA

The global pandemic has caused severe disruption in the management of a firm's tax practice. From interacting with clients to managing staff, this past tax season provided unprecedented challenges to efficiently operating a tax department. Evolving a tax practice into a more virtual practice was no longer something that could be put off until "next year." Modernization became a matter of survival.

It is often said that the most important parts of a tax practice are its clients and its people. Part 1 of this column discusses challenges faced in dealing with clients and people in a virtual practice and provides suggestions and recommendations to overcome those challenges. Part 2 of this column will focus on managing firm growth.

Client focus
Electronic engagement letter process

Tax filing season generally starts out the same way each year. In order to perform services, the client needs to acknowledge the firm's services via an engagement letter. Membership in the AICPA Tax Section provides access to engagement letter templates, available at The good news is that for the 2020 tax season, at the start of the pandemic, most firms had already completed and delivered engagement letters for the upcoming filing season. In many firms, this was a manual process that involved printing, assembling, and mailing the letters only to wait for them to be signed and returned.

In an updated virtual practice, there is an opportunity to start this interaction with clients in the digital world. Look for a service that allows the firm to send clients engagement letters via email, allows clients to sign electronically, and tracks who has and who has not signed. Starting work before obtaining an engagement letter is generally not advisable. Virtualization of the engagement letter process can increase efficiencies in the distribution of the letters and increase the likelihood of timely execution of these important contracts.

Client organizers and portals

Earlier this year, many firms faced the major challenge of being unable to receive information from clients during the stay-at-home or shelter-in-place orders that were in effect throughout the country. In many places, offices were closed to the general public and buildings were locked to anyone not deemed "essential." It became extremely difficult to share information with clients via the normal pickup and drop-off procedures that many clients had become familiar with. This lack of access caused many firms to look closely at electronic or online organizers and portals to collect data from clients for preparing tax returns.

Clients historically have used tax organizers to help gather their tax paperwork and remind them of the items that they may be missing from the prior year. An electronic organizer is no different. Clients still use an organizer to assist with gathering their tax paperwork. But most electronic organizer products do not stop there. In a full virtual practice, the concept is to avoid paper at all costs. To do that, a practice should adopt an electronic organizer system that is interactive and allows clients to upload tax documents directly into the organizer platform. In most cases, the platform is accessible by both the tax professional and the client. This means the tax professional (or possibly an administrative support person) can check the status of the documentation to determine when there is enough information in the file to get started on the tax return.

There are certainly challenges when transitioning to an online or electronic organizer system for both clients and firms. Clients will likely need direction on how to upload the data or how to link bank accounts or broker accounts to the online organizer system. They may not have easy access to digital information or the ability to provide it. In addition, clients may not be comfortable putting their information online. Tax professionals will have to spend time educating clients on the new process and be able to discuss the security protocols that are put in place to protect their data. Firms will have to review intake policies and procedures and adapt them to account for this new mechanism of collecting information. This will be a different process for many firms and clients, and there may be bumps in the road. But this year has provided many opportunities to deal with challenges, and gathering information electronically is likely to provide many efficiencies.

Client meetings/interactions

As with the challenge of collecting data, office closures and social-distancing requirements severely limited the ability to meet with clients in person. In a virtual practice, it goes without saying that virtual meetings are a must. The good news is that there is no shortage of virtual meeting platforms. However, the real challenge is how to effectively conduct a client meeting via an online virtual meeting platform. You need to consider what you want to accomplish during the virtual meeting and make sure that the platform you use is the best platform for that. Most online platforms share the same features, but it may take some homework to understand the limitations of the various platforms. As an example, the free version of Zoom has a 40-minute time limit. That is something you would need to plan for if you are having a conference with an important client.

Review the various virtual conference platforms and determine which tool meets your needs. Factors to consider include: (1) ease of access (readily available with no cost to the client); (2) the ability to share screens (to be able to walk through materials, etc.); (3) the ability to record the call (if you will want to maintain a record of the conversation for later reference, but be sure you consider whether you need to obtain the participants' permission); (4) time limits; and (5) security. These are just a few factors to consider when deciding which video platform works the best for you and your client.

Having a virtual practice should not limit the face-to-face interaction that clients want and need. The ability to meet in a virtual space has never been easier.

Delivery of tax returns

The client has engaged with the firm via an electronically signed engagement letter, sent the information to the firm via the online organizer/portal, met with the tax practitioner virtually via a virtual conference platform, and the tax return has been completed. Now it is time to assemble and deliver the tax return to the client.

Historically, the assembly and delivery of a tax return involved printing a tax return and binding it into a folder with the firm's logo and mailing it to the client to sign. In a virtual practice, this process needs to be modified. Firms need to find an electronic delivery method that provides a safe, secure, and efficient method to electronically deliver tax returns and allows taxpayers to electronically sign tax returns as accepted and allowed by the IRS. Part 2 of this column will provide further discussion of firm practices for preparing tax returns and storing client records electronically, as well as other practice management considerations.

People focus

Managing a team of individuals is often challenging, and the days of "line of sight" management abruptly ended earlier this year when many were forced to work remotely. In most areas CPA firms were considered "essential" and allowed to remain open. Many employees needed to telecommute due to child care issues or health concerns for themselves and/or their family. It is no longer a question of if a firm allows remote work but how to best maintain efficiency and effectiveness in that environment while capitalizing on the opportunity to become the often-desired employer that promotes work/life integration.

Work/life integration acknowledges the connection between professional and personal lives, and it poses new challenges to practice management. How do you efficiently manage a team of individuals spread out across a community, a state, the country, or the globe? How do individuals manage their daily work schedules to ensure work is completed timely and efficiently?

When the pandemic hit the United States in the spring, one co-author's office remained open with a small staff to handle calls, accept tax information drop-offs, and process tax returns. With planning and more digital resources, some of these tasks may be handled remotely in the future. As this business started to reopen, staff were given a choice to work from home permanently, work in the office (based on available space and safety concerns), or participate in a blended option where the staff member would work one week in the office and one week from home. Interestingly, this co-author's firm had about 20% of staff choose to work remotely permanently; the other two options were evenly split.

This situation challenges firms to manage in-person staff as well as remote workers. The following provides some best practices for firms with at least a partially remote team to consider.

Develop a simple method for the staff to stay in touch with each other

The co-author's firm used Microsoft Teams for staff communication. Staff extensively used the chat feature to ask questions of others. Within Teams, there are multiple teams and channels to customize — audit, tax, client advisory services, partners, and administrative — allowing the appropriate groups to stay in touch, evaluate the workflow, and bounce questions or ideas between team members. Microsoft Teams also easily facilitates the transfer and sharing of files. There are other options, but a standard communication method is vital to success in a remote environment.

Workflow software is used to track projects

Easily tracking the status of a work product is important to the success of a remote workforce. One co-author's office used CCH Workstream to track projects' flow, work assignments, projects' status, and the number of days the project had been in the office. Tools like this one are critical to monitoring workflow and identifying bottlenecks. Of course, like any tool, it is only useful if everyone uses it properly and consistently. The success of a workflow system depends on properly training staff and emphasizing how critical it is to keep progress updated.

Communicate often

Communication occurs in a variety of channels — Microsoft Teams, email, text, or phone. What is the best way to communicate with each team member? Some team members prefer email while others prefer text. Not all communication should be client/work-related, especially in a stress-filled year like 2020. It is critical to check on staff's well-being since not everyone reacts the same way to stress. Employees' mental and physical health (and therefore their productivity) are more easily gauged with personal communication.

Provide tools and technology to work from home effectively and efficiently

Tools and technology vary depending on the primary duties and working habits of each person. At a minimum, they may include a laptop, multiple monitors, and a scanner. With spouses working from home and children attending school virtually, bandwidth can be a serious problem. Discuss internet access, and consider as a firm whether to reimburse employees for some portion of this access. Are the firm's software and files available for remote access? If not, consider the steps necessary to move in that direction.

Set guidelines for expectations

Supervision and support of staff can be more challenging in a remote-work world. Establish clear expectations on work hours (based on individual circumstances) and availability. As an example, how quickly do you expect a staff member to respond to you as well as to client requests? Same day? Within 24 hours? It could be as simple as creating a firm policy. For example, if communication is received by noon, a response should be required by the end of the business day, and if communication is received after noon, a response should be required by noon the following day. Also, workload expectations should be clearly set and monitored by all parties.

Communication is critical

Communication is the common thread among most of these best practices for an effective and efficient team (whether during a pandemic or normal times). Due to extenuating circumstances, working from home and managing a remote workforce became a necessity during 2020. Finding different ways to communicate and serve clients rather than holding in-person meetings was part of the norm. Change is difficult. But transitioning your tax practice to be more relevant in the virtual world will likely reap rewards in the future. To learn more, listen to the "Modernizing Your Practice" series on the Go Beyond Disruption Podcast, available at



Brandon Lagarde, CPA, J.D., LL.M., is a director with Postlethwaite & Netterville in Baton Rouge, La. He leads the firm's Tax Services Group. J. Raleigh Cutrer, CPA/PFS/ABV, is a shareholder with Matthews Cutrer and Lindsay CPAs in Ridgeland, Miss. Mr. Lagarde and Mr. Cutrer are members of the AICPA Tax Practice Management Committee. April Walker, CPA, CGMA, is lead manager—Tax Practice & Ethics, Public Accounting for the Association of International Certified Professional Accountants. Ms. Walker is the staff liaison of the AICPA Tax Practice Management Committee. For more information about this column, contact


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