The COVID-19 pandemic fast-tracked the need to invest in technology to accommodate clients and staff in the new remote-working environment.

• Author: Walker, April
• Position: Modernize and Virtualize Your Tax Practice, part 1

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 tinyurl.com/y527u6w7.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...