Post-COVID Tax Season Survey Findings

Right Networks conducted the 2021 Post-COVID Tax Season survey including participation of CPAFMA members to find out about their experience with tax production and applications through this pandemic year and to understand expectations going forward into a post-COVID world.  The survey was completed by 285 firms with 77% of respondents being firm owners and senior management.  The majority of respondents were in firms larger than 10 members and a third of the respondents were in multi-office firms.

58% Believe 2021 Better than Last Year: Whether it was the improving economy, comfort with technology, or positive outlook on the beating the COVID crisis, the majority of respondents felt that the 2021 busy season was better that last year with 36% of respondents saying it was better and 12% stating it was much better. 28% felt it was about the same and the remaining 23% experienced a worse year.

Remote Work Most Significant Change (74% of Respondents): Not surprisingly employees working remotely/from home was consistently listed as the top change from March 2020 which corresponds with other industry surveys.  Of those respondents, 61% stated that the change was positively viewed when adopted and 56% felt positive that employees would continue working remotely in the future.

61% Implement Flexible Hours: The majority of respondents (64%) viewed allowing flexible hours in a positive light with some slight hesitation that it would not continue post-COVID (61%).  We took this to infer there is some hesitation on the part of a few firm managers to continue offering flexible hours.  We believe this could be viewed negatively by those remote workers that have gotten used to it so we suggest firms evaluate the goodwill created and continue promoting flexible hours as part of the firm’s ongoing remote work program.

68% Promoted Use of Digital Tools/Collaboration: Not surprisingly, automation/collaboration was one of the most positively viewed changes made since March 2020. 71% of respondents viewed technology adoption as “somewhat” or “very positive” and slightly more (72%) expected to continue using the tools they adopted as the firm returns to normalcy post-COVID.

Majority Preferred Sharing Information with Clients Digitally: When it comes to working with clients the vast majority of respondents preferred using portals followed by secured email attachments. For the 15% that insisted on physical delivery, it is advised to provide clients with hands-on training on using the firm’s digital solutions, particularly those that utilized USB sticks.* We actually suggest firms completely disallow the use of any USB Flash/thumb drives as they are a favorite hacker tool that can inadvertently compromise the firm’s network.

• Cloud client portal-58%                            
• Secure email links/attachments-27%           
• Paper via postal mail-6%                               
• In-person Delivery-4%                                 
• USB Stick-5%                                                   

Two-thirds of Firms Benefitted from New Opportunities During COVID: 75% of all participants viewed the opportunities provided around PPP guidance as either “somewhat” or “very” positive with the same percentage positively viewing this type of advisory work as likely to continue post-COVID.  The hidden opportunity for many firms as this can be seen as their entry into promoting advisory services to their clients.

43% of Firms Experienced an Increased Focus on Cyber Security during COVID: Simultaneously 44% did not make any changes in regards to cyber security during COVID.  This infers that a large number of respondents either felt confident in their firm’s security capabilities or did not feel or consider if their security was impacted.  Experience has shown that cyber criminals will take advantage of any opportunity and we saw that the combination of increased phishing emails (including those built around COVID) and many remote work “newbies” created additional exposure in firms, where we believe specific training is warranted.

Adoption of Cloud Based Applications Increased 36%: More than one-third of respondents increased the use of cloud applications over the past year with the majority (57%) viewing the adoption as very positive, somewhat positive, or neutral and 62% expecting the same post-COVID. With application after application proving to be more available, maintained, and secure in the cloud than on premise, it is expected that cloud will eventually become the primary vehicle for all applications and data.

Most Common Tax Solutions Adopted in the Cloud: With cloud solutions naturally having the advantage of standardized remote access and “anytime, anywhere” capabilities below we list the various solutions being utilized by the majority of respondents.  If your firm is currently performing any of these functions on-premise, your firm is behind the adoption curve and should be evaluating these solutions during the extension season.

• Client Portal-68%                                          
• Document Management-62%                   
• Electronic Signature-61%                               
• Tax Planning/Projections-60%                          
• Workflow/Due Date Tracking-58%         
• Practice Management-57%                          
• W2/1099 Preparation-50%                                

Cloud Enablement Helps Firms Manage Client Demands: The survey asked what features provided by cloud applications provided the most benefit in working with clients. Not surprisingly anytime/anywhere was the top selected response followed by automatic updates (and stronger version control) which the firm would no longer be responsible for managing.  Security was the third most selected reason which supports the earlier inference that many firms feel that cloud security is stronger than what they were doing internally themselves.  57% of respondents also found the cloud streamlined their workflows and provided greater efficiencies and one-third stated that they were able to take on more clients due to cloud enablement of applications.

• Anytime/anywhere access-71%                                             
• Automatic updates-67%                                                       
• Secure environment-60%                                                   
• Streamlined workflows-57%                                                 
• Greater client efficiencies-57%                                             
• Stronger version control-43%                                            
• Greater capabilities to take on more clients-33%                 

Throughout the past year’s visits within CPA firms and in discussions with peer consultants a consistent theme has emerged in that the majority stated they had their best year ever despite the everyday impacts on life due to the COVID crisis. We believe this can be attributed to firms that were properly positioned to work remotely and/or rapidly adopted cloud-based applications which took advantage of the anytime, anywhere access, and outsourced IT and security benefits.

Roman H. Kepczyk, CPA.CITP is the Director of Firm Technology Strategy for Right Networks and works exclusively with CPA firms to implement today’s leading best practices and technologies incorporating Lean Six Sigma methodologies to optimize firm production workflows. Roman is a CPAFMA Advisory Board Member and been consistently listed as one of Accounting Today’s Top 100 Most Influential People in Accounting, INSIDE Public Accounting’s Most Recommended Consultants, and CPA Practice Advisors Top Thought Leaders to the profession.