why you can’t skip checklists

do you want tax returns fast or right?//www.g005e.com/2021/03/23/17-basic-expectations-of-partners/

by ed mendlowitz
how to review tax returns: the field-tested update

this is an area i feel very strongly about, and it is a major reason for the success of the better firms and the lack of growth of smaller firms.

more:tax review procedures are your quality control|seven types of tax return reviews|how to turn tax returns into new business
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by my way of thinking, a system must be established to assure the greatest quality at every level, reduce the number of touches per return, and present the client with the type of return he or she is relying on you to deliver. this system only works if there are the right processes and procedures and a strict adherence to them, and this includes the careful and deliberate use of checklists.

most people do not like filling out checklists. why? i don’t know because i like them and find them useful and invaluable.

“checklists create order, cause me to not reinvent the wheel every time i need to do something i previously did, create a place where i can list things that need to be done that won’t be forgotten, help me make sure i cover everything i am supposed to cover, and enable me to more easily pass on what i know and have learned from my experiences.”

now you read this quote out loud as if you wrote it and read it as if you mean it and if your procedures do not include checklists but you believe this is the way it should be, thenmake it happen!

checklists also make it easier to assure the quality of work and procedures of people you supervise and also easier for staff to know what to do. despite these many benefits, many staff members do not like to fill them out, including both less and more experienced staff and even some partners. furthermore, because of this unease many times a manager or partner will have a staff person skip a checklist or parts of it for the sake of expediency to get something “out the door.”

the issue with many checklists – and this is especially so with income tax preparation – is that the checklists are just too long. the aicpa tax section and ppc tax preparation checklists are about 10 to 20 pages. however, in these instances there is a very good reason for their length. tax returns are very complicated, requiring a myriad range of knowledge that most preparers, many reviewers and few partners possess.

the problem with such long checklists is that they take too long to follow, making it cost-prohibitive for most tax returns. because of this, they are not used, and then neither are any other checklists. both of these organizations have abbreviated shorter checklists for those that want to use something, but i think that defeats the purpose of the checklists, which is to assure that nothing is missed or passed over.

at a minimum i believe reviewers should use the long-form checklists as a guide when they perform their reviews. the purpose of the review is to assure the quality. the long checklists provide that check. when used as a guide, the long-form checklists do not necessarily need to be filled out, but their value as a guide is important because of the increasingly complicated nature of tax returns.

where they are supposed to be used by staff, many firms look the other way, knowing the completed checklists were not read. in my opinion, these acts destroy your quality control system.

tax returns take time. at many firms, the newer staff (read: less experienced) prepare returns. in some firms, very experienced audit staff take time off from their audits to prepare or, worse, review returns. that quality must be assured is a given, yet procedures are followed that cause reduced quality, a poor result, greater overall time spent on the returns, greater time spent by the overstressed reviewers, and less profits.

if it were up to me, i would have a zero-tolerance policy for noncompliance with checklists and procedures, no matter how busy things get.

keep in mind that once you establish a procedure, it must be followed, or you won’t be any better off than not having it.

if you are not using checklists, you must start asap! adapt some of the checklists i’ve prepared. they’re available at//www.g005e.com/shop/tax-season-checklists/.