In the United States, the accounting and tax industry is steadily evolving around two initiatives: improving efficiency and maintaining compliance. With tax deadlines shrinking, paired with increased client requests, CPA firms face substantial pressure during tax season.
The IRS has reported that there are over 150 million individual tax returns filed each year (2 to 3 million of these are filed in the CPA industry), along with millions of corporate, partnership, and trust returns. CPA firms already doing tax preparation, bookkeeping, and advisory work can quickly feel overwhelmed in such an environment. This is where switching to an outsourcing approach with Drake Software for outsourced tax filing and preparation introduces a disruptive strategy.
CPA firms outsource Drake bookkeeping software in the USA.
Why CPA Firms Choose Drake Software for Outsourced Tax Filing
The Drake Tax Software is known and trusted for over 40 years in tax preparation. It is noted for its speed, accuracy, and compliance features that allow CPAs to quickly complete federal and state returns. When combined with various outsourcing/margin models, Drake Software for outsourced tax filing becomes an even larger advantage.
CPA firms are increasingly using Drake Software for outsourced tax filing, specifically because it:
- Processes complex multi-state and federal returns efficiently.
- Automates calculations to minimize human error.
- Transmits information instantly and securely through a data portal.
- Provides e-filing compliance with the IRS and state compliance departments.
- Creates greater efficiency and ease of navigation to enhance productivity.
When CPA firms hand off tax filing responsibilities to a specialized team of professionals who already work in the Drake-hosted environment, CPA firm staff become available for higher-value services like IRS representation, financial planning, and advisory.
Why Do CPA Firms Outsource Drake Bookkeeping?
During tax season, there is a lot of focus on filing taxes; however, CPA firms outsource Drake bookkeeping throughout the year. Errors in bookkeeping will carry over to provide incorrect information for tax reporting, so having clean records is essential to providing good customer service.
Examples of bookkeeping tasks that CPA firms outsource include:
- Recording income and expenses.
- Reconciling bank and credit card receipts.
- Keeping track of payroll.
- Financial statement preparation.
- Year-end adjustments for tax purposes.
By outsourcing bookkeeping tasks specifically on the Drake software with The Fino Partners, CPA firms know that they will be able to easily do tax preparation on the same software. This saves the CPA firm efficiency during a busy filing season.
The Process of Outsourced Tax Filing with Drake Software
CPA firms that use Drake Software to outsource for tax filing typically follow these steps:
- Data Collection and Security: The client collects all tax documents (W-2s, 1099s, K-1s) and sends them to the CPA firm.
- Data Security from CPA Firm to Outsource Partner: The CPA firm then sends the secured client data to the outsourced partner via portals or VPN.
- Tax Preparation with Drake Software: The outsourced team will input the data and run compliance checks using the Drake tax software.
- First-Level Review: The quality team then checks all returns to see if they have errors.
- Returns Go Back to CPA Firm: The outsourced team will send the returns back to the CPA for final review as drafts.
- Final E-Filing of Returns: The CPA will then submit the filing through Drake’s secure e-filing system.
This process typically saves 40%-60% of preparation time and is cost-effective to either the client or CPA firm, particularly during high-volume filing periods.
Benefits of Drake Software for Tax Filing
Utilizing partners familiar with Drake Software for tax filing produces several benefits for CPA firms.
Cost Reduction:
Firms could save up to 50% in costs to operate when outsourced.
Scalable:
Can complete large quantities of returns without the extended time of additional personnel.
Accuracy Improvement:
The trained team in the DRM software reduces discrepancies.
Time Management:
Returns are produced in a fraction of the time without the extensive workflow.
Client Confidence:
Provides a faster turnaround and an advisory approach that strengthens relationships with clients.
While outsourcing is about labor efficiency, it is also about reallocating firm resources to provide greater client value.
Benefits of CPA Firms Outsourcing Drake Bookkeeping
By utilizing Drake bookkeeping outsourced to CPA firms with The Fino Partners, they receive consistent, year-round value.
- Daily bookkeeping functions are performed efficiently, reducing strain on the in-house staff.
- Financial information is consistently updated and compliant with U.S. GAAP.
- CPA firms are able to have tax-ready books sooner during tax season.
- Reducing operational expense is realized as you eliminate the expenses associated with training and the software.
- The CPA firm maintains accuracy because the outsourced bookkeeping service uses professional bookkeepers who work in the team's bookkeeping system in Drake.
Ultimately, CPA firms enable their staff to devote more time to advisory services and tax planning, and other compliance counseling, and less time reconciling all your transactions.
Compliance and Security in Drake Outsourcing
Numerous CPA firms are hesitant about outsourcing work due to confidentiality issues. All outsourcing providers handling Drake tax filing and bookkeeping utilize best-in-class security and privacy measures, including:
- Encrypted data transfers utilizing software with SSL or TLS compliance
- Multi-level access - where only certain roles and permissions can access sensitive data
- IT systems that are in alignment with SOC 2, GDPR, and ISO compliance
- Regular audits and internal reviews to mitigate breach risk
- Staff training based on IRS Publication 4557 regarding taxpayer data security
Reputable outsourcing firms will also facilitate CPA firms and clients with confidence that their compliance is continually monitored through NDAs and service agreements.
Real-World Use Case: CPA Firms with Drake Outsourcing
Imagine a mid-sized CPA firm in New York generating approximately 3,000 individual and 500 business tax returns each year. Like many firms, they faced the same issues every tax season of hiring seasonal staff. However, their firm transitioned to Drake Software to take care of their tax preparation and bookkeeping for their outsourced tax filing experience. Resulting in:
- A 45% reduction in in-house hiring costs.
- Quick turnaround on all 3,500 tax returns, improving their turnaround times by nearly 30%
- No stress on audits in advance of tax season by bookkeeping, using Drake’s software and firm staff.
- Extra time with clients of partner-level staff increased by 25%.
As the cases above illustrate, these examples show how an outsourced tax filing experience with Drake helps CPA firms find a balance between cost and efficiency for all of their clients to maximize satisfaction.
Future Growth of Outsourced Drake Filing and Bookkeeping
The worldwide accounting outsourcer has a current market value exceeding $35 billion, and a large percentage of that total comes from tax and bookkeeping outsourcing. With the advancement of automation, cloud-based integration, and AI-based compliance tools from Drake Software, this trend will continue to develop at breakneck speed.
Within 5 years or less, CPA firms may not only outsource compliance tasks such as filing or bookkeeping, but they will also depend on offshore Drake professionals for data-driven advisory capabilities. CPA firms that can pivot and adopt these models early are likely to remain competitive, efficient, and client-facing.
How to Select the Right Partner for Drake Outsourcing
Choosing the right outsourcing partner like The Fino Partners is critical. CPA firms should evaluate partners based on:
- Experience with Drake Software outsourcing for years.
- Staff expertise in tax filing and bookkeeping, both must have knowledge of tax filing and bookkeeping for Drake.
- Transparent price structure with no hidden fees.
- Working hours must be available during peak tax filing hours in the U.S.
- Agreement on no compliance violations or non-disclosure agreements.
- References from other CPA firms in the U.S.
The scope of tax preparation and bookkeeping is changing rapidly. CPA firms that only rely on internal staff will have issues with scalability, cost, and pressure to meet deadlines.
Related Resources
- Global Expansion: Why San Francisco CPA Firms Should Consider Outsourcing
- Why CPA Firms in Texas Use Outsourced Accounting Services
- The Benefits of Outsourcing Bookkeeping for CPA Firms in Chicago
For small and large CPA firms outsource Drake bookkeeping, workflows using Drake is not just a way to reduce costs, but it also prepares the firm for the future. The right outsourcing partner will deliver better performance, compliance, and prepare your clients for long-term trust and growth.
Contact The Fino Partners today to outsource Drake Software bookkeeping for CPA firms in the USA.
