Improve Tax Tracking With Automated Workflow


“Why should we change the way we track tax work through the office? Isn’t the manual system better?”


I have heard these types of questions many times over the years, and it never surprises me because accountants, like many of us, don’t like change.


Firms that use a manual system or their tax software as a workflow system need to review how much those systems are costing them. Lost time, low productivity, broken promises and the risk of not filing on time are some of the potential costs. Developing a workflow system and using automation software could boost profits by $10,000 or more in just one year.


While some of the benefits of an automated workflow system are obvious, the biggest one is saving time. In many cases, I have seen offices of three to 10 staff members eliminate the need of one administrative person, saving more than $10,000.


To understand the inherent benefits of a well-defined automated workflow system, let’s look at the pitfalls of using a manual tracking system or your tax software alone to track workflow.



Here are some of the problems with manual systems:


  • Once a file is received, it potentially falls into a “black hole,” where the physical location and/or status may not be known.
  • Staff do not always update route slips correctly as the file moves through the office.
  • No reporting or statistical information is automatically available with manual systems, making productivity much more difficult to measure.
  • Time is tracked manually or not at all.



The improper use of existing software can also reduce productivity and profitability. Countless times I have heard accountants say they use their tax software to know where something is or when it is due.


This may be great for tracking e-file transmission or acceptance but should not be confused with a workflow system. Each year accountants tell me that the previous year they missed a deadline, and they want to know how to avoid missing another one.


Tax systems, while convenient for simple tracking, break down very quickly and lack the full potential of workflow systems. Here are some problems with using tax software to track workflow:


  • It is inefficient in offices with more than one staff person.
  • It doesn’t allow easy delegation and accountability.
  • It doesn’t warn or remind staff of pending due dates.
  • Lack of integration—it doesn’t track other due dates like notices, audits, payroll and sales taxes.



To automate your workflow, you must first map your existing processes, identifying when tax work arrives and the steps you take to move it through the office. Map out every step and pay special attention to steps that are ineffective. This is a great opportunity to make changes to the processes in your office (see “Get Results: Improve Your Accounting Firm Processes Using Lean Six Sigma,” JofA, Jan. 10, page 38). Once you define the new workflow, then it is time to look at systems that allow for complete control, automation, delegation and accountability.


Randy Johnston ( is executive vice president at K2 Enterprises and a member of the JofA’s subject matter advisory panel for technology.


To comment on this article or to suggest another article, contact Alexandra DeFelice, senior editor, at or 212-596-6122.


A version of this column originally appeared in the AICPA CPA Insider e-newsletter. The AICPA Insider Group’s e-newsletters deliver news, commentary, recommended products and professional development resources, covering individual and corporate taxes, corporate finance, wealth management and careers. Sign up for free at



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