Discussion:SurePrep

If you have time to scan and organize the documents, ship them overseas, etc... why can't you get better organized and keep it in house. In my practice we put ALL client documents in 1040 order from line 7 down, after 2 weeks of basic training, a GOOD college intern gets the doc's keyed in, runs machine tapes of W2's 1099's etc... to avoid transpositions and lists obvious errors (missing cost basis etc...) then I look at it. A tyical return takes an intern/admin person 45 minutes, I spend another 45 and 70 percent of the returns are done that way.

There are obvious benefits, but I do agree with Southparkca's comments.

We have been scanning and storing electronic files of our clients for over 7 years now. These just seems like the next step for our practice. We want to work smarter, not harder. This way we can take on more clients without taking in a new accountant. I'm a CPA not a data input specialist. It would make sense to outsource the non value added features if the cost is right.

There are risks everywhere.

as long as they are willing to come pick up their return at my office everything is fine, but now several are getting older and think that I run a shuttle service to hand deliver their returns just so the mailman or yard man or neighbor next door doesn't steal their mail. I agree people can be very paranoid, but I do everything I can to reassure them that we take no unnecessary risks. Telling them that I can't hire a college student to input their stuff (they want to think I do all of it anyways) and instead am emailing it to India to be done overnight just wouldn't sit well with most of my clients.

especially the ones who have had their own jobs 'outsourced'

Sureprep has two options, you can send the info overseas for about $50 per return or keep it onshore for $100 per return.

We charge enough for our services that we should not be going overseas for merely economic benefits. Thre are enough people here in the states that need jobs, are willing to learn and some who already know how to input, that the need to ship to India shouldn't be done.

I am not against out-sourcing, in fact, to get some of my employees additional hours I am entering into 'alliances' with other local CPA's. One of my goals is to eventually create some kind of on-line collaboration with others here to provide some form of out-sourcing/work sharing alliance.

In fact, this one CPA I am aligning with might require me to put together a team of additional CPA's who are looking for work.

Rather than outsourcing, why don't you put out a request here on TA and see how many of the newer people have excess time during tax season as they strive to build their practices. I am sure that that can be just as cost effective as outsourcing and in the process you are aiding a fellow countryman become an entrepreneur, possibly allowing them to hire additional people, thereby taking someone off of unemployment possibly and maybe even off of welfare.

Put an add in the local paper, contact your local Young CPA chapter and see how many hungry, inexpensive younger CPA's and CPA candidates are out there that would be willin gto do this.

If outsourcing was necessary to remain competitive, maybe, but that is not really the case here with tax prep.

Anyway, these are just my thoughts. Keep our work here. Keep our people employed.

Fred

Whenever you have a lot of money flowing in one direction, that money can be used against you one day to influence legislation and other things, and you do end up shooting yourself in the foot.

I have mentioned on here before the H-1B visa program, which is an outrage. Supposedly, American employers must certify that they have tried to find the educated labor in America before being able to bring people over on this visa. But cheating is RAMPANT. They put on a show of trying to find qualified Americans. It is unpatriotic. I don't understand these people that are all for the family and the rest of it, but they don't understand that when you deprive someone of a middle class job, then you are not doing any favors to the "family".

The H1-B has done far more harm to the middle class than any of these people walking across the border. These visa holders are taking the job of your college educated child, or at least serverely depressing the salary.

It seems like so much is designed today to harm the middle class worker. I think it pays to keep in mind that these very people are our clients. There are not enough super rich people around to support all of us, though everyone seems to be chasing after this mythical group all the time.

Henry Ford (circa 1914) "I pay my people $5.00 a day so they can buy my cars." He still made money on his cars, and expanded his market.

That means that the offshoring with Sureprep would only be considered for tax returns that would take more than 2.5 hours of college intern level data input. Anything less = you should do in-house.

OR, if you did it in-house, would YOU have to input because you have no one to hand it off to? Would it take you, let's say, 1 hour to input the same return? If so, is your time worth more than $50? Most likely it is.

I understand the economies. But still don't like the lack of control. There, I've written it. I'm a control freak. A typical S (Robert Kiyosaki's Cash Flow Quadrant readers will understand this - the rest of you should read the book - same author as Rich Dad/Poor Dad.)

I was offering an alternative. It's also a pet project that I would like to get up off the ground.

Certain industries must outsource to maintain that competitive edge. I don't think that tax preparation is one of them. yuo can easily make nice profit using American workers.

I also believe that the world is flat. That technology allows this to be. I also firmly believe that eventually, all the untapped cheap labor markets will have been tapped, eventually the workers in those underdeveloped countries will begin fighting for better wages, that this will continue until all the markets labor is comparable, then we will have a truly FLAT world. And then it will truly be a competitive marketplace. Might not be now, might take 100 years, but eventually, this will be.

But, he's also your market (unlike an imported car). Until he is forced to sell himself elsewhere, he's your market. This applies especially to the country specific market for professional services.

Because labor is less mobile, it can be taken advantage of. You are, as is your right, taking advanage of cheap labor in another country. Why are they cheap? Because they are inelastic, they can't easily move (legal/money), or they are human beings and they don't want to move from the homeland.

Pure economics says that you pass that savings on to your clients from your outsourcing. That does not happen to any great degree, and that is exactly what people like Friedman don't take into account. As you pocket more money (as is your right), our National Income Account increases. It looks like America is doing better since this account is increasing. But, we ARE NOT, because, at least to me, it's not just the size of the pie that counts, but how it's divided.

My comments would follow Kevin's, so I'll say, I have look at outsourcing and found that my twenty year granddaughter needed some money (help). My decision was to pay her and have her performed the work at the reception desk (I have a reception "desk", but no receptionist). So at a rough cost of $15 per hour I get the work done, and employ someone who I know needs the work (could be anyone). My turn around time is also very guick. Usually, when in one hour or so I have on my computer at my desk the input I wanted.

I just can not see "any" real advantage (that is a finacial gain to me) to outsourcing the accounting and tax functions I provide, heck, I am the outsourcer for my clients.

All returns are reviewed and signed by me.

Carol took the Block course one year, is my age and is so damn reliable. She emails questions, or puts a review list with the returned data. Last year she did 36 returns, less than 10% of the total done.

The past two years I've found another source for outsourcing: my wife, who sits at her computer at the other end of the house. Slowly she is learning more than W-2s, interest and dividends. Her total for this year was 32 returns.

As Roy so elegantly puts it, I do the rest of the outsourcing.

Seems to me this whole question turns on how many returns are done by the office, and how many part timers were hired in the past. Seems to me most of the defenders of keeping the work here are, like me, one man bands. It would be interesting to here from our volume specialist, DZ. Where are you, oh Great One?

What worries me about the off-shore firms is what a large target they represent. Would the Russian or any other mafia hack or use other methods to get access to 500 tax preparers with 500 clients or one with 250,000? This similar to why Will Sutton robbed banks instead of mom & pop stores , “Cause that’s where the money is.” When you scan and send tax information, there is more information in one spot than anywhere else. Do you scan and send brokerage and bank 1099’s that usually include account numbers? What is your liability if they get hacked and your clients’ accounts are cleaned?

And if no one will buy at the established minimum wage, what do you tell the poor soul then?

For example, I can input a Schedule E off an organizer in less than 5 minutes. But I can also pay an outsource guy $1 to do that for me. Multiply that out and it seems to make sense. But can you rely on the outsource guy to input that Schedule E correctly. How will they allocate land & bldg? Will they question a large Repair expense as a capital improvement? Will they separate Sec 1245 improvements from 1250 improvements? I'm gonna end up spending that 5 minutes anyway reviewing the return.

As in any occupation, there are 2 types of tax practitioners: sales-people & technicians. Outsourcing seems to only make sense for those sales-people type. They are already comfortable issuing returns that may or may not be full of errors, and prefer to deal with the error later if somebody questions it. Face it! The IRS only audits less than 2% and the client's don't/can't read the tax returns that they pay for. Like a tree falling in the woods with nobody to hear it, so is a tax return with errors that nobody finds.

I know this sounds simple and I might be dreaming, but that is why I started this discussion. I needed to hear back from the other professionals.

My only other point was that for approximately 50% of your billing fee you could have another professional from TA prepare the return and as you become comfortable with his or her work, your review time actually drops and net revenue increases.

Just thinking I make more sense.  ;-)

If I was to pay the person I already have $50 per return to input this stuff they would be getting a raise.

My thought process is that if you are at a level where taking on more returns is extra work, then it pays to have a proficient preparer being the outsource agent. Hiring a person in house is sort of outsourcing, except it's insourcing. lol

Snowbird, here they will sue everyone remotely involved, and let the court proceeding sort it all out. Here's where Fred's genius comes in, as it's a bit of a logistical nightmare to get us all.

One problem with Fred's idea is that we might be considered a de facto partnership. But, these trivial details have kept many a man from reaping millions, and therefore, one must take a probalistic view of the matter.

As a lawyer, I might even try to argue that an outsourcing firm is a de facto partner. You can plead in the alternative, different counts, etc. I might not win on the idea, but it could contribute to settlement leverage along with everthing else.