Grasp the digitally driven tax opportunity

by Roman H. Kepczyk, CPA.CITP, CGMA

June 1, 2020

In every disaster there is opportunity. As the world and our profession pivots to new ways of working, opportunities arise to create and shape a new normal. COVID-19 has created a drive towards a contactless world which astute firms are taking advantage of to push their clients towards today’s digitally driven tax solutions providing efficiency now and for the long haul.

Embrace digital client communications

When you can’t meet physically, you must become an expert at communicating virtually and that includes not only face time, but the ability to share documents that support your discussions seamlessly. Phone calls, messages and emails are good for providing quick answers but to truly collaborate with both clients and staff, a comprehensive communication platform that will emulate face to face meetings is needed. Tools such as Microsoft Teams, Zoom and Slack are already becoming the new norm. Start promoting training and education on best practices including inviting clients ‘digitally’ to the conversation.

Implement or enhance your digital workflow tools

The status of all returns should be readily available to you onscreen in a single workflow application. If your firm is using multiple applications to manage status, due dates, project tracking and staffing, this information can be consolidated in a single workflow tool that can be customized to stratify the different workflows accordingly. Small firms should compare their current production workflow steps against tools such as JetPack, OfficeTools, and BQE Core while larger firms can manage workflow through their practice management applications, CCH’s Workstream, Thomson Reuters FirmFlow, and XCM. (Learn more in the book, Quantum of Paperless: A Partner's Guide to Accounting Firm Optimization #16 which is referenced throughout the article.)

Rebuild your tax technology stack with a focus on easy to use digital tools

Tax production has evolved significantly in the past three decades since personal computers entered the workspace. Unfortunately, many technologies that firms adopted along the way have been superseded by tools that firms are not aware of. Now is the time to re-evaluate each component of your tax tech stack:

  • Client document ingress: As there is some concern that COVID-19 can linger on physical documents, immediately educate clients on delivery of digital tax source documents to the firm. This can be accomplished either through a client optimized portal or one of the new generations of data accumulation tools to minimize physical exposure to these documents. Review your current portal capabilities from your clients’ perspective against tools such as Citrix ShareFile, cPaperless SafeSend, and SuraLink. In many instances, your tax provider has updated portal capabilities to match these tools but if not, it warrants a switch. Also, with the extended individual tax deadline, there is a unique opportunity to try out one of the dedicated data accumulation tools such as CCH MY1040Data, Lacerte Link or SurePrep that replace the traditional organizer process which is manually intensive. (LEARN MORE: QoP#18)
  • Client file organization: For optimizing onscreen tax preparation, client files should be organized in a standard format for return preparation and review. This can be accomplished with scanning tools such as CCH ProSystem Fx Scan, SurePrep 1040Scan, Drake GruntWorx and are particularly effective when centralized in administration. Recent surveys point to most firms adopting these tools and having well-trained administrative personnel doing all the scanning on dedicated scanners that are optimized according to the scanning applications specifications. (LEARN MORE: QoP#17)
  • Client file delivery: In addition to adopting digital ingress, the firm has a unique opportunity to utilize digital delivery to minimize physical handling and exposure of tax returns. Digital delivery of returns through today’s egress solutions is not only faster, more cost effective and secure than physical packaging and mailing but integrates an audit trail and the opportunity to utilize digital signature solutions which eliminates another physical touch. (LEARN MORE: QoP#18)
  • Client authorization/ signature: Now is the time to standardize the eSignature tools that are integrated with your tax program or portal. Firms should evaluate the ease of use in sending tax documents not only to sign tax authorizations but for also engagement letters. In addition to Thomson Reuters and CCH’s eSignature tools, products such as Citrix RightSignature, cPaperless SignatureFlow and DocuSign should be evaluated from a firmwide perspective.
  • Client invoicing: Firms should immediately include a digital invoice with the delivery of each digital tax return. At a minimum, send a separate invoice by email instead of physical mail and, if applicable, best practices point to sending the statement to both the approver and the payables person to ensure timely receipt which can be done directly out of the firm’s practice application or via PDF.
  • Client payment: Automating payments can be integrated with digital invoices by including a link where clients can pay with ACH or credit card. Services such as QuickFee, PayPal and CPACharge allow for clients to pay online rather than physically mailing a check. In some cases, these products integrate with the firm’s practice management application, so the payment is directly applied. (LEARN MORE: QoP#24)

The impacts of this pandemic will eventually recede and everyone will hopefully evolve to a new normal. Your firm has a unique opportunity to reshape and direct how you and your clients interact by driving digital solutions that keep everyone safe and more efficient in the future.

Roman H. Kepczyk, CPA.CITP, CGMA is Director of Firm Technology Strategy for Right Networks and partners exclusively with accounting firms on production automation, application optimization, and practice transformation.