automate tax season with apps you already use

make automation take the load off this busy season.

by donny shimamoto
center for accounting transformation

between tax law changes and the pandemic, the last two busy seasons have been a bear for tax preparers to deal with.

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while there is still some volatility and uncertainty around what the next busy season will look like, tax preparers should consider the following technology-related initiatives now so they can proactively equip their firms for the coming busy season. this should enable staff to have more work-life balance during the busy season and increase the firm’s ability to recruit and retain talent.

tax return automation technologies

technologies to help reduce the manual work associated with tax return preparation are mature and have been around for years now. the diagram below shows a standardized tax return workflow .

 

there are technologies that support various aspects of this workflow. each type of technology, the process(es) that it supports, and key benefits are described below.

electronic signature

with the covid-19 variants continuing to make people leery about meeting in person, these technologies allow you to obtain a legally binding signature on engagement letters and other documents without having to meet in person, print, scan, or fax documents. note that the irs requires that you use knowledge-based authentication (kba) if obtaining a signature on form 8879. some electronic signature platforms also allow you to collect payment via credit card or ach, so if you use it to get a client’s signature on your engagement letter, you could also collect a retainer or payment at the same time.

• you have three options for electronic signatures:

(1) most of the major tax return software have modules that handle electronic signatures, including

• • • cch,
    • drake,
    • gosystem,
    • lacerte,
    • proconnect, and
    • ultratax;

(2) use a client portal that includes an electronic signature module like

• • • canopy,
    • taxdome,
    • tax caddy,
    • safesend, or
    • smartvault;

or

(3) use a generic electronic signature platform like

• • • adobe sign,
    • docusign, or
    • rightsignature.

client portals

another reason to use a client portal over a standalone electronic signature platform or module is those client portals also facilitate the exchange of messages and documents between clients and your firm. because standard email is unsecured and can be the cause of a data breach if clients email you their tax documents containing their social security numbers and bank account numbers, it’s better to have clients upload documents to you via a secure web portal or mobile app. this reduces privacy risk to both the client and to your firm.

• there are several products in this space that support not just tax but other service lines.

• • these products include
    • avii,
    • cch (axcess) portal,
    • drake portal, intuit link,
    • netclient cs,
    • onvio,
    • sharefile, and
    • smartvault.
  • portals that are more tax-centric include
    • canopy,
    • clarity practice management,
    • taxdome, and
    • tax caddy.

zero data entry

once you’ve obtained the documents from your clients, you need to get that data into your tax software. zero data entry tools scan the documents and extract the relevant data. they then either directly input it into your tax software or provide an export file that can be imported into your tax software.

the bottom line is that you spend less time doing manual data entry and can focus on the actual return preparation.

• some tax software solutions have integrated modules, including
  • cch scan & autoflow,
  • intuit tax scan and import (lacerte & proseries), and
  • ultratax.
• another option is to utilize a separate software product like
  • gruntworx or
  • sureprep (1040scan and tax caddy).

with sureprep you can also utilize their verify service to have their staff validate that the software read the document correctly rather than having to verify it yourself.

workflow management

workflow management software provides you with visibility into the work being done by your teams. it can help you keep track of due dates, which returns are ready to be prepared, whose “desk” a return is sitting on, and targeted completion dates for work in progress. using the data from these systems can also help you to manage staff schedules and assignments, identify bottlenecks, and analyze your team’s ability to deliver returns on time and under budget.

• some workflow software like
• • avii,
  • cch axcess workstream,
  • onvio, and
  • xcm

are designed specifically for accounting firms and can also support audit and client accounting assignments.

• others like
• • canopy,
  • clarity practice management and
  • taxdome

are specific to tax.

• you could also use generic project management software like
• • asana,
  • keyedin, or
  • teamwork.
• there are also workflow products that were originally designed primarily for bookkeeping services that can be adapted for tax services too, like
• • jetpack workflow and
  • karbon.

bridge gaps with robotic process automation (rpa)

there are many repetitive and structured tasks that the above software and tax software still haven’t automated. for these cases, you can use a virtual robot created using rpa software to bridge these gaps.

some examples of ways i’ve seen tax firms use rpa include:

• save signed engagement letters to a client folder;
• save emailed documents to a client folder;
• print completed returns to pdf and
  • (1) upload to a client portal,
  • (2) save to client folder, and
  • (3) print if the client comes to the office to sign; and
• check if e-filed returns were accepted. if the answer is yes, the return is marked as accepted or, if not, the responsible staff will be alerted

using rpa does require a little bit of additional training, but there are products like electroneek and help desk systems automate that don’t require any it training to utilize. think of these as sort of like creating a macro in excel.

if you’re tech-savvy or have an employee that knows some basic programming, then

• microsoft power automate (the desktop version is free for office 365 users) and
• uipath

are good options, too.

take action now to make the 2022 tax season less busy

the key to ensuring the 2022 tax season is less crazy is to start looking at these technologies today. take time now to see how the technology works, or potentially even try out different products to see which one is the best fit for your firm.

then you have will time to figure out how to incorporate these technologies into your tax return preparation processes and train your staff on the new procedures and technology before the tax season starts.

 

posted on december 8, 2021