Tax Season from Home

The story of what happened when Stern Cohen LLP, a 50-person
accounting firm, went virtual on the eve of tax season due to the COVID-19 pandemic. 

BONUS: How we supported our clients through the lockdown…

“The pandemic support we provided resulted in claims of well over $200,000 for some clients.”

Everyone has a story about how they dealt with the COVID-19 lockdown, the isolation, working from home, and endless Zoom calls. In Stern Cohen’s case, we had to navigate the pandemic in tandem with our busiest time of year: tax season.  We also had a brand new priority: providing pandemic support to our clients.

Pre-Pandemic

Here we are on March 6, 2020 enjoying our annual “Tax Season Kick-Off” party at SPIN Toronto. In teams of four, there was some serious competition for the coveted table tennis championship – and a lot of laughs!

Fast forward two and a half weeks. It’s March 23 and to ensure the health and safety of our team members and clients, we closed Stern Cohen’s physical office.  From that moment, on the eve of tax season, every team member would be working remotely.

Accounting in the Cloud

Fortunately, the technology we needed to work remotely was in place over a year before the lockdown. In 2019, Stern Cohen outsourced our IT functions and moved to a Cloud platform (a virtualized desktop) with Microsoft 365. The Cloud desktop enabled us to log in from home easily and securely.

Pre-pandemic, we opted for digital over paper when we could for security, efficiency, and environmental reasons. During the lockdown, due to COVID-19 transmission concerns, we mandated a completely digital process for all personal and corporate tax returns. Clients uploaded their tax documents and checklists electronically via our secure portal. We used (Canada Revenue Agency-approved) e-signature software for drafts and approvals. We used Stripe as our online payment platform in addition to e-transfers. We held team meetings via Zoom video conference and chatted on Microsoft Teams.

Supporting Clients Through the Pandemic

In addition to our regular accounting services, we helped our clients apply for the governments’ COVID-19 response programs like the Canada Emergency Bank Account (CEBA), the 10% Temporary Wage Subsidy (TWS) and the 75% Canada Emergency Wage Subsidy (CEWS).

To determine if our clients qualified for any of these programs required careful analysis. Stern Cohen FIT clients were already set up with a robust cloud-based accounting solution (usually QuickBooks Online) enabling us to quickly access historical and current financial reporting. This information was crucial to help us determine if clients met the necessary revenue reduction test each month for the very lucrative CEWS program. Combined with access to our clients’ payroll, we were able to perform the detailed and often complicated CEWS calculations resulting in claims of well over $200,000 for some clients for the first four periods of the CEWS.

Most of our FIT clients use Wagepoint for their payroll needs and this allowed us to rapidly implement the 10% Temporary Wage Subsidy (TWS) by reducing payroll source deductions. Although this subsidy will become taxable later, we knew that increasing a business owner’s cash flow during the lockdown was crucial.

Every Stern Cohen FIT client was screened for eligibility for the CEWS subsidy for the prior periods (1-3) and at the same time planning was being done for the respective client’s eligibility for future periods (4-6).  All of our FIT clients are better positioned now for a potential second wave of COVID-19!

Pandemic Advisory Services

Other “Pandemic” services we provided clients with:

• revised budgets and cash flow forecasting as a result of significant changes to their operations due to the lockdown and business closures;
• advice about claiming home office expenses;
• preparation of financial reports for insurance claims under the business interruption provision of their policies as a result of lost revenues and additional expenses incurred due to COVID-19.

We provided advisory to our business owner and not-for-profit clients who requested our financial expertise to help make decisions. Jay Eckert, owner of Parachute Design Group had this to say about the level of support received:

“When we came to Stern Cohen and joined the FIT program, I finally felt like someone had our back. Over the last few months, I think I’ve said to my wife on a weekly basis that I couldn’t imagine going through this without the support and advice we received from Stern Cohen.”

We created a COVID-19 resource hub on our website and shared updates via our social media channels on the governments’ rapidly changing support plans and changes to tax filing due dates and payment deadlines.

Our Partners even wrote to their local MPs twice proposing solutions to support small businesses forced to close during COVID-19.

In the words of our Managing Partner, Michael McCleave:

“Everyone did a terrific job adapting to this new reality. I can’t thank our team members enough for pulling through this the way they have.”

How did team members cope?

In June, our entire team joined in a Zoom video conference call for a 90-minute training and debriefing session.  We used Zoom’s breakout room feature to share issues and solutions in smaller groups. We got a chance to hear from everyone to discover what issues they were having and what solutions they found.

Moving Forward

There is still no timeline for reopening our physical office. In a recent firm survey, team members overwhelmingly desired a combination of “working from home with a few days per week in the office” (71%) versus “working only from home” (21%) and “working only in the office” (7%).  These figures are in line with a recent poll of more than 2,600 office workers in the United States.

In the meantime, we will continue to support our clients and each other through the pandemic and beyond. In the words of Avi Gleeck, Partner:

“We’re all finding ways to adapt – it’s encouraging and positive. Now that summer is finally here, reward yourself and enjoy the outdoors when you can. It’s essential for everyone’s well-being to have a healthy work/life balance. Working from home is the new normal, so get comfortable!”