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Case Study · CPA Firm
📊 CPA Firm · Richmond VA · 12 Staff · 920 Returns/yr

She Needed 3 New Hires.
We Built a System Instead.

A 12-person CPA firm was hitting 70-hour weeks every tax season, turning away clients, burning out staff. The math said hire 3 — we automated the mechanical work instead.

90%
Faster document intake
45 min → 5 min
40%
More returns processed
without adding staff
$250K
New hire costs avoided
in the first year
150 hrs
CPA review time freed
per tax season
Industry
Public Accounting
Staff
4 CPAs · 5 Preparers
Location
Richmond, VA
Volume
920 Returns/yr
Tax Software
Lacerte
Engagement
6 Weeks
The Problem
70-Hour Weeks. Clients Turned Away.
A Capacity Crisis Hiding Behind Staffing.
📦
The Shoebox Problem
Clients sent documents in every format — scanned PDFs, phone photos, forwarded emails, paper at the desk. Sorting and extracting data consumed most of the time before any real tax work started.
45–90 min/client wasted on intake
🔁
Manual Year-Over-Year Comparison
For ~680 returning clients, preparers manually compared this year's docs against last year's return. Pure mechanical work that still missed things like a K-1 surfacing as an amendment months later.
20–30 min/client · still missed items
🔍
CPA Review Bottleneck
Every return needed a CPA to manually trace each number back to a source document. 345 hours of review compressed into 16 weeks with 4 CPAs. This is where returns backed up.
345 hrs review · 4 CPAs · 16 weeks
💼
The Hiring Math Didn't Work
Qualified seasonal preparers are nearly impossible to find. CPAs willing to join a small firm are expensive. 2 preparers + 1 CPA = $250K+ for the hardest roles to fill.
$250K+ projected new hire costs
"
We needed 2 more preparers and a 5th CPA. That's $250K+ in annual salary. I wanted to know if AI could close the gap instead.
— Managing Partner · Richmond, VA CPA Firm
System Architecture
Classify. Extract. Flag. Trace.
Mechanical Work Done. Judgment Untouched.
📦 Shoebox Intake Pipeline
45–90 min → 5–8 min
📄 Scanned PDF
📸 Phone photo
📧 Brokerage email
🗂️ Walk-in paper
→
Classify + Extract
type · fields · source
→
Structured Client Package
W-2, 1099s, K-1s organized · each number source-linked
5–8 min
Schwab 1099-B
Trades by settlement date
Covered/uncovered split
Wash sales separate section
✓ extracted + normalized
Fidelity 1099-B
Grouped by fund then date
Mutual fund lots separate
Reinvestment lots inline
✓ extracted + normalized
Robinhood 1099-B
Crypto trades separate
Options with premium data
Fractional shares odd format
✓ extracted + normalized
↓ extracted data feeds year-over-year comparison
🔁 Year-Over-Year Change Detection
20–30 min → 3 min flagged review
NEW
New 1099-DIV from Vanguard — not in 2024 return. Auto-maps to Schedule B.
→ Verify: new account or previously unreported?
MISSING
K-1 from Westbrook Partners — present last year, not received yet.
→ Request before preparing. Caught pre-amendment.
CHANGE
Mortgage interest $18,400 → $12,100 (−34%). Possible payoff or refi.
→ Verify against loan statement or ask client.
LIFE EVENT
New dependent SSN — triggers CTC eligibility and HOH evaluation.
→ Verify birth/adoption date, gather dependent care receipts.
↓ prepared return enters CPA review with source tracing pre-done
🔍 CPA Review Accelerator
15–25 min → 6–10 min · 150 hrs saved/season
↔
Source Tracing
Every return line pre-matched to its source document. Side-by-side view, no manual search.
side-by-side view
⚠
Anomaly Detection
Flags 3× jumps, AGI threshold violations, wash sales, estimated payment mismatches.
review only what's flagged
✓
Consistency Checks
Cross-checks: federal ↔ state, estimated payments, depreciation carryforward, AGI across schedules.
catches cross-schedule errors
The Proof
Shoebox In. Structured Package Out.
Flags Caught Before They Become Amendments.
intake-portal · preparer-view · client-henderson-2025 ⚡ Ready in 6 min
Robert & Linda Henderson
Returning client · Tax Year 2025 · 14 documents · 9 formats
▸ Documents classified & extracted
📄 W-2 · Deloitte LLP✓ extracted
📄 1099-DIV · Vanguard (new)✓ NEW FLAG
📄 1099-B · Schwab (47 txns)✓ extracted
📄 1098 · First National✓ extracted
📄 Charitable receipts (3)✓ totalled
⚠ K-1 · Westbrook — MISSING⚠ in 2024
▸ Extracted income summary — source-linked
Wages & Salary
W-2 wages (Deloitte)$187,400
Federal withholding$38,200
Investment Income
Dividends — Schwab$4,120
Dividends — Vanguard$2,840 ← new
Capital gains — 47 lots$11,240 net
Deductions
Mortgage interest$12,100 ↓ from $18,400
Charitable$6,200
✓ All extracted · 3 flags for review · source-linked 6:14 min
🔁 YoY — Henderson 2025 vs. 2024
25 min → 3 min
NEW
Vanguard 1099-DIV — $2,840 dividends, not in 2024.
→ Confirm: new account or unreported?
MISSING
K-1 Westbrook Partners — $14,200 last year, not received.
→ Request before preparing. Caught pre-amendment.
CHANGE
Mortgage interest −34%. Possible payoff or refi.
→ Verify against loan statement.
The missing K-1 would have been an amendment. Caught before the return was prepared.
🔍 CPA Review — Henderson
20+ min → ~7 min
Return line items
W-2 wages$187,400
Dividends (Schwab)$4,120 ✓
Mortgage interest$12,100 ⚠
Charitable$6,200 ✓
Capital gains$11,240 ✓
Source document
W-2 Box 1 · Deloitte$187,400
1099-DIV · Schwab$4,120
1098 · First National$12,100 ↓
Receipts · 3 orgs$6,200
1099-B · 47 lots$11,240
Anomalies for CPA attention
⚠ Mortgage interest −34% from prior year — confirm payoff/refi
⚠ Charitable at 3.2% AGI — below 30% threshold, no carryforward
What this system does not do
Does not prepare returns or make filing decisions. Handles source tracing, anomaly detection, and consistency checks — so the CPA spends time on judgment, not verification.
Results — First Tax Season
40% More Returns. Zero New Hires.
The System Paid for Itself in Season One.
40%
More returns processed
without adding staff
$250K
New hire costs avoided
first-year savings
150 hrs
CPA review time freed
per tax season
Document Intake per Client
Before
45–90 min
After
5–8 min (−90%)
CPA Review per Return
Before
15–25 min
After
6–10 min (−60%)
Peak Season Weekly Hours
Before
70+ hours
After
~52 hours
Document Classification OCR + AI Extraction YoY Change Detection Source Tracing Anomaly Detection Lacerte Integration W-2 · 1099-B · K-1 · 1098 Brokerage Normalization Consistency Checks Missing Doc Detection
Metric
Before
After (Season 1)
Returns processed
~800 (at limit)
920 (all accepted)
Document intake
45–90 min
5–8 min
YoY comparison
20–30 min
3 min (flagged)
CPA review
15–25 min
6–10 min
Peak weekly hrs
70+ hours
~52 hours
New hires needed
2 prep + 1 CPA
0 · $250K avoided
The Design Boundary That Made It Work
The system handles mechanical work only — source tracing, anomaly detection, consistency checks. It doesn't prepare returns or make filing decisions. That boundary is what made a CPA firm trust AI with their workflow, and it's why the system replaced $250K in hires instead of creating new problems.