A digital tax season ahead


If you want some statistics that will boggle your mind, one in five accounting practices still use paper for workpapers and documents. Yikes! Almost 80% of firms are still using manual spreadsheets in some capacity.

While spreadsheets at least provide some digital upgrades from paper, the point is that we, as an industry, are still dealing with a lot of manual, not so efficient processes.

With all the buzz around AI taking our jobs, and the plethora of software on the market now, it’s hard to believe that so much manual labor still exists. Are we traditionally resistant to change? Or are we too price conscious when it comes to new programs? Or do we just not trust the accuracy and security of things in the cloud?

Whatever the reason, the hard reality is that firms who don’t advance technologically, don’t advance at all. They die off.

So where do you start in terms of upgrading your tech stack since the options can be overwhelming?

Here are three areas of your practice to look at before tax season. I don’t recommend adding too many new processes all at once, it will stress and burn out both you and your team. Technology implementation almost never goes according to plan.

Pick the area that is the MOST manual right now within your organization and upgrade that one first. Then work down the line slowly and don’t make more than one major change before the busy season starts.

1. CRM and/or workflow software

Most tech is all in one now when it comes to CRM software and document retention/workflow management. Examples include Karbon, Canopy and TaxDome. Most of them will allow you to electronically collect documents from clients, collect KBA signatures on e-filing forms, send organizers and to do lists to clients as well as oversee project management.

They can include everything from time tracking for your team members to billing tools to translate your work directly to invoices as well as the ability to lump hours and documents into a specific job to track your workflow seamlessly in one place. If you still keep client files in paper or send paper tax organizers, this is the place to start.

2. Payments and collections

AR can become extremely time consuming. Automating collections and billings processes can take a huge chunk of time off managers’ to do lists. One of the best things we ever did was require our clients to be on auto pay. You will inevitably deal with declined payments, but for the most part, most bills are paid on time without any extra effort on our part.

A software like Anchor which allows your clients to manage their own payment methods, requires a payment method to be on file, and handles the billing automatically can create huge efficiencies in your firm. Be wary of payment processor fees. Not all fees are created equal.

3. Tax preparation

This one seems obvious to automate but there’s a lot to this process. From client document collection to the actual preparation of workpapers and the return, to getting the tax returns signed, e-filed and saved in permanent files. Automating your document collection from clients requires you to keep things easy on their part.

You need a client portal that includes a phone app to allow your clients to easily take pictures and securely send you documents that way. Electronic organizers will also improve your collection and completion rate, as will electronic signatures.

Tools like Tallyfor make it easier for your team to turn client financial statements from QuickBooks, Xero and Excel into well documented tax input workpapers as well as push the numbers directly to the return. Tallyfor also will produce a tax journal entry workpaper to send to your clients for items like depreciation that you need to communicate back to them.

Regardless of what area you choose to start with. Taking any steps toward automation and efficiency is an important and necessary one when it comes to the longevity of your practice.


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