The Tax Preparation Industry - Term Paper Example

? The Tax Preparation Industry: Where It Has Come From and Where Is It Going (Income Tax) Tax preparation services for income earners whether high or low incomers are a major concern for the economy as a whole and individuals. Improving the efficiency of tax services offered is a major concern for entrepreneurs who are professionals in this field as well the up coming professionals. It is argued that the inexperienced make more mistakes that the experienced in tax preparation and compiling the tax returns therefore instigating the need and necessity of tax preparation by the professions (Bonner, 2008). It is therefore mandatory for tax preparation services to have confidence which is well defined as the self confidence to perform a task or a duty. Process motivation is of essence to income preparation services. Tax preparation needs a lot of experience in that it will result into over-confidence. Income earners also seek for tax preparation services due complexities arising from filing tax returns. Another reason for seeking consultancy is due education level, many people are in the low income bracket are people in low education bracket. These inexperienced people are the targeted by the community based financial training services. In tax preparation services for income a lot of diligence and professionalism is required. Not underrating process motivation which is a major factor in developing and retaining employees. Scientific management shows that are different methods used in employee motivation. Money is not the only incentive as always presumed by the managers. Employees also tend to look at other incentives such as fringe benefits such as medical services and not money. Table of Contents Abstract 2 Table of Contents 3 1.0Introduction 4 2.0Control systems 5 2.1Separation of duties 6 2.2Authorization 6 2.3Planning 6 3.0Quality management 7 3.1Benchmarking 7 3.2Value of Knowledge management 7 3.3Employee motivators 8 4.0Qualities of a good manager 8 5.0Decision making analysis 9 6.0Management challenges 9 7.0Marketing Challenges 10 8.0Conclusions 11 List of References 13 1.0 Introduction Income tax preparation services sometime become very tricky for many families depending on the level of their level of education, their busy schedule or the income they earn day to day or from month to month. Due to many activities the family is engaged in many income generating activities, which bring many complexes when it comes to tax returns compilation. In other words it brings tax burden to the income earners. Filing tax in time normally relieves the consumer of unnecessary tax burdens arising from tax penalties (Romich, 2000). Due the tax complexities many people always prefer their tax returns to be compiled by tax professionals. Theses group could the elderly, the employed, non- educated, or even the literate with no time or people whose schedules are too busy. Due to lack of enough information on tax compiling, the tax professional normally has the advantage to exploit these opportunity that remains unexploited. But the hindering barrier to tax preparation services is always the cost charged for the services offered by the professionals. Many potential customers perceive the costs to be high depending also on the high cost of living in many parts of the world due to inconsistent inflation observed or experienced on day to day basis. Some people also do not go for professional tax services because of the time it takes before the audit are finalized and returns are submitted back. They also feel that normally it takes a lot of time before this money are refunded back so they rather do the tax compilation on their own rather source for other services, they also tend seek ways in which they maximize their financial resources (Souleles, 2003). Many professional tax services always want tax returns to send to the various bank accounts so that some interests can be earned from the money deposited so that it can the poor families on their daily to daily operations considering that they are low income earners. The enlightened lot takes advantage of this opportunity so that they can double their earning and financial status (Duflo, 2005). Tax savings can be always be used for different reasons such as paying high debt interest rates. This is whereby the person filing the returns feels that there is some debt lying in some place. High interests’ rates debts are normally as a reason of may be some outstanding money somewhere that needs to be paid promptly. When the debt is settled against the tax returns, it relieves the person the burden of incurring a lot of costs by having to pay the money using his own money that will have to cater so many things such as transaction costs, risk of withdrawing the money and having to carry it around. Tax returns therefore become a good source for settling such high interest rates debts. Many people who receive tax returns most times tend to spend the money than save it, this could be due to the fact that many people always have poor savings ability than spending the money. As known money is a tempting substance to handle in terms of proper balance and proper use. Tax saving can help especially the low income earners when it is properly saved and utilized. The saving could be used to finance a project that has been initiated or for instance a mortgage. If the tax saving are invested in long term infrastructure bonds, that pays coupon rates that are consistent, then in the future they can result on very investments (Edwards, 2004). 2.0 Control systems The firm that is all professional organizations and even the non professionals firms must come with appropriate and proper control systems that would ensure that particularly firm is run with a lot of professionalism and all the accounting policies are exercised as much as possible. The accounting principles such as separate entity, the matching principles and the relevance principle must be strictly adhered to and effectively enhanced. The following are some of the control systems (Anderson, 2004): Separation of duties Authorizations Planning 2.1 Separation of duties In any firm, whether a family business or a registered limited company by ownership always calls for separation of duties and responsibilities. To avoid fraud or money laundering could result into going concern problems; all the loopholes must be properly sealed. Reason being normally people tend do a lot of duties which could easily lead to fraud because there is no proper check up and follow up by the responsible authority. Therefore for an organization success all the accounting control procedures must be properly adhered to. 2.2 Authorization This is a process whereby permission must be set for something to take that involves monetary value. Authorization can be exercised in many ways such as use of passwords in the organization, restrict access in the firm and also accessing restricted documents or file sin the computer or in the respective folders where they are kept. Authorization will minimize cases of fraud if not reducing them. 2.3 Planning Planning involves the process of proper arrangement of tasks and duties so that they are handled as and when they are due. It is argued that for the organization to be self-sufficient, planning of its systems must be up to date and followed appropriately. Planning normally ensures that tasks are pursued as they come and not who and who basis. Planning of work will require work schedule or program of activities to be run or to be attended to by the organization employees. 3.0 Quality management Good quality management ensure efficient organizational practices, that may be used in assessing the nature of service that is delivered by professionals firms and even to a larger extent even the production industry that specializes in the manufacturing of goods. Quality management involves risk management, which entails the insurance of all non calculated risks entered into by the organizations. Quality management is now becoming worldwide recognized phenomenal. The world has become global village where all operations from all corners in the world are centralized through information technology. 3.1 Benchmarking Benchmarking is the process of trying to match the best quality in terms of standards, performance; quality etc. for an organization to compete on the global market sufficiently it has to set benchmarks. Benchmarking of organizations could be done using some of the supreme best standards in the world. Benchmarking practices could involve comparing the companies with other companies who are known to quality pros. Benchmarking could be drawn in terms of divisional level, inter-firm, activity level and out industry level. 3.2 Value of Knowledge management For data, facts or values to be understood, the information must be interpreted to be representing any sensible utility. Knowledge management involves what really the information and knowledge means to any person who attempts to explain the data of facts. Value of knowledge management involves analyzing the information in terms of quarterly financial results of in terms of financial ratios. Interpreting information could be relevant to the organization in that they are able to deal with today’s currents issues and problems that come up at the company level or at the management level. Situations could also be addressed based on how the situations come, otherwise managed knowledge management. This whereby there is defined way of handling problems but problems are solved as they come. Ad hoc processes rather than programmed systems such as decision support systems. This is because the situation at hand is a unique problem that has never been handled before and therefore there is not define solution for that particular problem (Bonner, 2008). 3.3 Employee motivators Employee needs to be motivated for them to able to perform their duties without intentions of strike or go slow at work. There are various ways of employee motivation in the work place; such as job rotation, job enlargement of employee participation. Employees need to be motivated at costs so that productivity is guaranteed. There are various theories which have been developed to discuss employee motivation. Such theories include Maslow hierarchy of needs, Theory X and Y and ERG theory among others. As employees are human beings and not machines, they need to be motivated so that they can work without any problem. 4.0 Qualities of a good manager A good manager needs to be somebody with intellectual knowledge in that he should able to make decisions at timely. Decisions that should not detrimental to the organization in terms of cost benefit analysis. In a financial management firm, a manager should be able make decisions that will not affect the employees of that particular and even the investors in that the investors may loose on terms of dividend or returns on investments. A good manager should be a leader and a not a boss in that employees should interact with him or her without fear. Also the manager should be in a position to intermingle with his peers without the fear of intimidated. 5.0 Decision making analysis Decision making is the process whereby findings or results are analyzed with the various models or variables to reach at a conclusion. Decision making could be done on various scales depending on the weight of the information, the secrecy of the information, the relevance of the matter and the complexity of the matter. Information that is not weighty could be analyzed by intermediate managers, as the decision making at this level is not very complex. Decision making a time involves a lot of reasoning or psychological thinking (Anderson, 2004). 6.0 Management challenges The organization faces various management problems running from top management to the lowest person in the management circle. These challenges could include separation of entities where by if the owner of the firm happens to be manager of the firm will tend to run the firm as if firm is his own business. Separation of entities at times brings a lot of controversy in that when not observed the going concern of the company will have issues in that the company may become insolvent. Management issues normally arise from the fact the vision and objective of the firm is always compromised if not properly observed. Sometimes it is difficult to manage various teams of employees if they are dispersed within a spread area. It becomes difficult because of lack of coordination among the teams, and when communication lacks a lot of problems are encountered which result into improper decision making of that particular organization. Another management problem is using the wrong tool for carrying a particular purpose, for instance a professional taxation provider will encounter problems when it comes sharing a common folder such as Microsoft excel becomes sometimes it very difficult to know which one is the most recent file. This could result into factors such as a wrong file being sent to the customer thus showing that there is lack concern for a particular job being pursued. Therefore a wrong choice of a material for a particular job by management could result in to wrong by the tax service providers. Mismanagement of resources could also result to be a major challenge faced by the management, mismanagement of resources by the organization. For instance using a wrong tool for a particular job such as using a excel sheet in solving taxation services problem workload. Management of resources is a critical aspect in taxation services firm in that proper implication can result into going concern problems. Another management challenge also involves proper allocation of files and assets. It has been found that many organizations spend a lot of time looking for resources such as files or folders that are kept in the system. Time management is very crucial in any business if returns are to be realized. Another management challenge is spending a lot of time in the status meetings or progress meetings. Frequently or more often people meet in the boardroom to discuss progress or about the development of a particular project. The best option to this problem is coming up with web based folders to enable the organizations to run efficiently without a lot time wasting. If the organizations adopt proper time management programs finally they increase the productivity of this particular firm. 7.0 Marketing Challenges Brooks argued that the challenges faced by the organization in trying to market their products, they could be marketing challenges faced by organization in attempting to make their products sail through among the consumers. Marketing is always done so that the products of a particular company may be able to sail in the market or beat the competitors in the market. These marketing challenges involve brand identity; this where by the company fails to identify a proper brand in the market to specialize its production in that particular product. Brand loyalty is the asset of the company and its competitors “enemy” in the sense that the company generates its revenue from the brand. To build brand loyalty companies must put all the necessary efforts needed in the success of their companies (Brooks, 2006). Another marketing challenge is creating core target in the audience, this implies that particular organization must who its clients are. For instance in the case of taxation services that target audience will be the employed and further more are too busy to have time to compile their own tax returns. Target audience in the market is very essential in any market in any organization in the completive world. Offering a promotional product is another reason why companies fail to get the promised market or win that particular target off from the competitors. Many consumers are always convinced by product promotions and therefore they move towards buying those particular products. For instance taxation service industry can come with various incentive meant to convince the consumers to go for those particular service and the competitors’ products. Another marketing challenge is defining a proper marketing plan that will see sales in that particular firm; this could be done by ensuring that the product is visible, identifiable and distinguishable. The four P’s of marketing must also be evident and properly exercised. The four P’s of marketing are price, promotion, product and place/distribution. When proper marketing plans are employed is used, the firms are likely to sell for instance in the case of taxation service industry should use price tool in targeting their employees such giving them discounts. The taxation industry can also ensure the promotions are done to entice people in their business. 8.0 Conclusions Taxation service industry is still a new profession that attempts to solve the problem of tax penalties, providing errands to those who are busy and do not have time to compile their tax returns. Providing tax services for the industry especially income tax that comprises majority of the society. Employee motivation is therefore is necessary to help the employees provide the services to the clients without any biasness. Proper managerial skills must be employed to ensure consistency and continuity of the organization. Management problems as already highlighted above are various in myriad industries and therefore different avenues must be put in place so as to succeed in management challenges. But the still the company must look for proper ways in solving marketing challenges so that the organization is money-making machine. List of References Anderson, S. M. (2004). Targeting financial Management Training at Low-Income Audiences. Journal of Consumer Affairs , 38(1), 167-178. Bonner, S. (2008). Judgement and decision making in accunting. Upper Saddle River, NJ: Pearson Prentice Hall. Brooks, F. R. (2006). ACORN'S Accelerated Income Redistribution Project: A program Evaluation. Research on social work Practice , 38(2), 369-381. Duflo, E. G. (2005). Saving Incentives for Low-and Middle -Income Families: Evidence from a Field Experiment with H&R Block. NBER Working Papers: 11680. Edwards, R. D. (2004). Macroeconomic implications of the Earned Income Tax Credit. National Tax Journal , LVII(1), 45-65. Romich, J. &. (2000). How families view and use advance payment versus lump sum delivry. National Bureau of Economic Research , 1-36. Souleles, N. S. (2003). The Response of Household Consumption to income tax Refunds. The American Economic Review , 89 (4), 947-958. Read More