We are excited to introduce a new opportunity that involves our use of a third-party data entry service that will enable us to complete your tax returns more efficiently. We have contracted with Xpitax Solutions Private LTD (“Xpitax”), an affiliate of CCH Incorporated, and an industry leader in data entry, to handle the time-intensive work our team members have historically shouldered.
Outsourcing Data Entry: Frequently Asked Questions
Why is your firm moving to outsourcing data entry?
We have lost team members due to a number of different reasons and coupled with the growth over the past few years, our current staff is unable to shoulder the full workload. Taking time-intensive data entry work off their plates will enable them to focus on the thoughtful preparation of your returns as well as have a more reasonable work-life balance.
Why does your firm use a third-party vendor to work on tax returns?
Our firm prepares a significant number of returns in a very short window of time. Using a third-party will allow us to focus on the more complex areas of your return rather than data entry. Many firms, including the Big Four accounting firms, are utilizing an outsourced data entry service to improve client service and provide employees with a higher quality of life during busy season.
Why can't your firm find staff?
The accounting industry is facing a national pipeline crisis. Firms everywhere are facing the same problems we are. There simply aren’t enough professionals in the business and even fewer students going into the field. Our own local university currently has only 5 students considering following in our footsteps. Statistically speaking, there will be fewer students locally graduating in accounting than there are local CPA firms. Working in public accounting does not appeal to every accounting student, and these young professionals are presented with great opportunities in private industry and government when entering the job market. Additionally, many professionals with experience are leaving the public accounting profession for opportunities in other accounting fields.
What other options have you considered, or steps have you taken?
- We have been aggressively recruiting and hiring young professionals entering the workforce along with nontraditional candidates more senior in their careers, both of which we have committed to an investment in training.
- We’ve researched a number of service bureaus like Xpitax and determined this was the best option for our firm and our clients.
- We have eliminated our audit practice to be a firm that strictly specializes in individual, business, nonprofit, trust, and estate income tax preparation and planning, along with advisory, bookkeeping, and compilation services.
Why don't you hire CPAs who work remotely?
That is an option we thoughtfully considered, but it’s not a good one for several reasons:
- They would not be here to meet with you or answer questions when you call, nor would they be ingrained in our firm culture and local community.
- We don’t know what their living situation or home office is like. Are they using the Wi-Fi at the corner coffee shop to transmit your data? Do they have an unscrupulous roommate?
We’re not willing to hire someone to prepare your tax return who will never get to know you or come to care about you. To us, you are a person, not a tax return. It is hard to build that relationship with someone you never see. We certainly won’t be hiring someone whose home office is an unknown. This is an option many firms are utilizing, but we won’t do it because it is not being a good steward of your data. The funny thing is, the IRS doesn’t require us to ask your permission to outsource to people who live in the US, even though the firms that use them have no idea if they are set up to keep your personal information safe like Xpitax is.
Where is my data going?
Your data is going to a server based in the US that is accessed by overseas professionals for the sole purpose of data entry. The teams overseas use secure terminals to access the information and enter data in an all-paperless, controlled environment. The processes followed are certified under an independent SOC2 certification. When the data has been entered, we’re notified through a secure delivery system and are able to then prepare, review, and process your return as we normally do.
Who is Xpitax?
Xpitax is a company based in the US that was founded in 2003 by a CPA who wanted to find a way to enhance tax season for CPAs. Xpitax has a hosting facility in the US and uses trained professionals internationally with significant tax data entry experience whose work enables accounting firms like ours to work more efficiently and provide more timely service. The company is a division of Wolters Kluwer, which also includes Commerce Clearing House (CCH), the US tax authority for the last 100 years and the only provider the firm has ever used for its tax preparation software.
How do you know my information is safe?
Xpitax has built state-of-the-art infrastructure for its outsourcing operations to ensure the highest level of reliability, performance, and security available. Its facility was designed expressly for outsourcing tax and accounting compliance work and therefore has stringent physical and network security measures in place to safeguard sensitive client data. Additionally, Xpitax has designed a fully redundant network infrastructure at a secure Boston area datacenter with off-site backup and recovery capabilities at a similar facility in North Carolina.
- Xpitax security protocols are SOC (Service Organization Control) 2 Certified. This certification is issued by outside auditors who consider security, availability, processing integrity, confidentiality, and privacy. The SOC2 designation is endorsed by the AICPA, the governing body for CPAs.
- Our firm principals have reviewed the SOC2 report to validate and understand the security protocols followed.
- Data is fully encrypted the entire time it is transmitted and stored.
- The Xpitax servers are located in the United States.
Who will be responsible for my tax return?
Our firm is still responsible for your tax return. We will prepare, meticulously review, and process it just as we always have.
Are the overseas professionals knowledgeable?
Yes. These qualified and skilled professionals with Xpitax are highly trained and meet or exceed the quality of work expected by most CPA firms. They receive additional rigorous training from Xpitax that was developed by a US-based CPA firm covering US tax law and various tax software programs so their work is accurate and efficient.
Is this going to cost me more?
Sadly, due to inflation, everything is costing you more. The accounting industry is not immune to rising costs. The industry is projecting continued increases in tax preparation invoices for the 2022 tax year. We are moving to Xpitax in an effort to keep our rate increases as low as possible during an inflationary period that we have not seen in recent years, while still keeping them below the national averages of expected increases.
How does the process work?
If you agree to allow us to outsource your data entry, you’ll provide us with your tax organizer and other applicable information when you receive it. We will scan your documents and upload the file to the Xpitax server in the US. From there, the data entry staff will access it, enter it, and we’ll be notified when it’s ready for us to begin preparation. This is usually done within a few days, so our turnaround time on your tax returns should be faster.
You will continue to do things as you always have: gather all your tax documents and get them to us as soon as you can once you have them all, be available to answer questions, and review and sign your return when it’s done. The only thing that we hope will be different is that you receive your return sooner thanks to the extra hands at Xpitax.
Who is requiring my approval to use Xpitax?
We are. We want to be transparent with you. The IRS also requires we obtain your permission if we utilize someone located outside of the United States to aid us in working on your tax returns.
What are the benefits of using Xpitax to me as a client?
We anticipate our clients will receive many benefits thanks to our partnership with Xpitax:
- We will continue to be able to help as many of you as possible.
- Outsourcing expensive data entry will likely help us stay below the national averages of expected return increases.
- Our professional team will be able to focus on the more complex areas of your return rather than data entry.
- Our turnaround time for your tax returns will likely be faster.
- You will give our dedicated team members a much-needed adjustment in their work-life balance. We are cognizant of the reality that many accountants are leaving the public accounting profession due to the workload compression of tax season. The past 3 years have been a period in which many of our team members have lost the necessary balance to sustain a career in a public accounting environment. We are being proactive in making changes in this regard to continue to be a successful locally owned business in our community.
What if I don't want you to use Xpitax for my data entry?
Participation is voluntary and we will still prepare your return; however, the timeliness of return completion is dependent on the level of participation we receive in our use of third-party data entry. A certain level of participation will allow us to fairly forecast our workload capabilities from February 15, 2023-April 15, 2023, for the 2022 tax year. All clients will receive a mailing prior to November 30, 2022, in which we ask you to indicate your preference and return to us by December 23, 2022.
I support and trust the firm’s decision to partner with Xpitax, what do you need from me?
We appreciate your support, and all clients will receive a mailing prior to November 30, 2022, in which we ask you to indicate your acknowledgement on the consent and return to us by December 23, 2022. If you need a copy, please email us at firstname.lastname@example.org. We will send you an organizer just like we normally do in early January 2023 so you can begin getting us your documents.