Tax Technology

Three Questions to Ask Today So You Can Jump into the Future

Firm leaders must juggle marketing, business development, client service, staff recruiting and retention to a successful outcome for everyone involved. There’s one thing that that links all of these firm management initiatives together — technology.

Technology has revolutionized how you prepare tax returns, even automating many processes outright. However, this technology allows clients to expect more done in less time. Here are three questions that can help you keep track that you’re in control of the technology your firm uses, instead of vice versa.

  1. How easy is it to find help from an authoritative source while preparing returns in your current tax preparation and compliance system? See that your software provider offers a dynamic and integrated compliance guide. Easy-to-follow instructions for completing each line of a return along with helpful practice aids will certainly have your staff much more at ease.
  2. Is your current software enhanced every year with hundreds of new features, functionalities, forms and schedules? Make sure your software is updated throughout the year and not just with new icons. A comprehensive list of new enhancements help make your tax preparation and workflow experience more efficient and productive.
  3. Are the visuals, design and data input fields of your tax preparation software and its tax forms consistent for all entities — such as the 1065 and 1120-S? Developers shouldn’t work in silos. This helps the design of your tax software modules to be consistent. Your staff will appreciate knowing that making an entry in the Partnership return is the same as making one in an S Corporation return.

The tax department of the future will need to strike the right balance of technology and services to remain relevant — allowing you to continue adding value and growing your client relationships. And now is a great time to start developing the skills and expertise to find this sweet spot.

Smith + Salisbury, PLLC in Charlotte, North Carolina implemented a digital tax workflow. Christopher M. Salisbury, CPA/PFS, CFP, CSEPP, and partner at the firm says, “You have to be willing to change your own process a bit … You have to find the balance to hit the sweet spot for any given firm.” As a result, they increased revenue by 22% and profits by 29%. Here’s one example of how they did it:

  • The firm increased the number of returns prepared from 900 in 2009 to 1,100 (23% more returns). In addition, the firm also accomplished this without adding more work hours or employees.
  • Using the Wolters Kluwer Digital Tax Workflow, the firm estimates it’s saving 5 minutes per return. This translates to:
    • 5 minutes saved per return x 1,100 returns per year = 5,500 minutes saved (over 91 hours)
    • 91 hours per year x $125 per hour (average blended rate) = $11,000+ in savings

The quote above is often attributed to Benjamin Franklin. However, some scholars suggest the idea was floating around for at least 60 years before Franklin made it famous. No matter the source, how does this apply to your tax department today? How does it apply to your firm’s tax department 5, 10,or 20 years from today?

Interested in learning more about the intersection of tax and technology? By all means, take a few minutes to jump into the future. Download Boomer Consulting, Inc.’s The Future of Tax white paper by Michael Wherry, CPA & LSS Black Belt and Dustin Hostetler, LSS Master Black Belt. It will be the best future-ready couple of minutes you spend today.

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Author: Bill Hatzos

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