A New Jersey-based CPA firm partnered with KnowVisory Global’s bookkeeping services to resolve an 18-month backlog for 22 businesses, ensuring timely tax filings and preventing IRS penalties. Through strategic task allocation, temporary staffing, and meticulous data reconciliation, we restored compliance and safeguarded the firm’s reputation.
Introduction
Our client, a US-based CPA firm specializing in accounting, bookkeeping, and payroll services for small to medium businesses, faced severe staffing shortages. This led to a backlog of unrecorded transactions for 22 clients dating back to January 2022. With IRS penalties looming for delayed 2022 tax filings, the firm urgently needed to resolve the backlog before the October 15, 2023, extended deadline. They outsourced the cleanup to KnowVisory Global in July 2023, giving us just three months to deliver results.
The Problem
The CPA firm struggled with three critical issues:
- Staffing Shortages: Insufficient personnel caused delays in managing routine bookkeeping and payroll tasks.
- 18-Month Bookkeeping Backlog: Financial data for 22 businesses – including payroll, expenses, and revenue – remained unrecorded since January 2022.
- IRS Penalty Risks: Clients faced penalties due to unpaid tax shortfalls. Estimated tax payments had been calculated arbitrarily, and payroll accounting was incomplete, compounding compliance risks.
Decision to Transition
With deadlines approaching and internal resources stretched thin, the CPA firm engaged KnowVisory Global to take over the backlog. Our proven expertise and rapid-response team them achieve desired results.
The Challenge
Completing the project required overcoming two major hurdles:
Complex Coordination: Each business had unique financial structures, transaction types, and data quality levels and this demanded tailored communication and workflows.
Tight Deadline: With only three months to reconcile 18 months of backlogged transactions and file accurate tax returns, efficiency and precision were non-negotiable.
The Solution
KnowVisory Global implemented a structured approach to meet the tight deadline while ensuring accuracy:
1. Centralized Data Collection & Organization
We gathered all outstanding financial data (bank statements, payroll records, invoices) from the 22 businesses and created a centralized repository by categorizing accounts basis client, transaction type, and date.
2. Role-Based Task Allocation
We then assembled a dedicated team of bookkeepers, senior accountants, payroll specialists, and tax experts and assigned them clear roles and responsibilities. This helped us avoid overlaps and maintain accountability.
3. Temporary Staffing Support
We also onboarded few temporary bookkeepers to accelerate data entry and reconciliation.
4. Milestone-Driven Workflow
Out team then divided the project into weekly milestones and tracked progress and addressed bottlenecks proactively.
5. Client Collaboration & Payroll Resolution
Our experts liaised directly with each business to clarify discrepancies and validate transactions. A separate team focused on rebuilding payroll records to ensure accurate tax withholdings and net pay calculations.
The Result
Conclusion
- For the 22 Businesses:
- Zero late filings: All tax returns were submitted by October 15, 2023.
- Penalties avoided: Clients evaded non-filing fines. Those with tax shortfalls paid minimal delinquency penalties, while others received refunds for overpayments.
- For the CPA Firm:
- Client retention: The firm retained 100% of its clients by resolving the crisis.
- Reputation salvaged: Timely compliance restored trust and credibility.
- Time-sensitive accounting cleanups require expertise, scalability, and precision. KnowVisory Global’s collaboration with this CPA firm highlights our ability to deliver under pressure while ensuring compliance and client satisfaction.