Think back … it wasn’t that long ago when a personal computer, loaded with an in-house tax preparation application (manually updated every few weeks), was considered “state-of-the-art.”
Hopefully, you’ve come a long way since then!
I often say that if I were starting my own practice today, I would be 100 percent in the cloud, so my personal opinion is that if you want to have a successful tax practice, follow the trend to the cloud and take advantage of technologies that will allow you and your staff to collaborate with your clients anywhere/anytime, 24/7.
What should technology in the current tax practice look like today? Here’s my short list of must-have technologies for today’s tax practice:
- Cloud-Based Tax Preparation Application. If you’re still avoiding the cloud, give up on that fight because it’s a losing battle. If you are frustrated with your in-house tax solution, or if you are looking for a change, migrate to a cloud-based tax solution. As changes and bugs are addressed, leveraging the power of the internet will allow the vendor to layer on real-time updates. Plus, you are in an accounting firm, not a technology company – there’s no need to engage IT consultants to configure in-house servers and apply software updates. There are plenty of web-based vendors in the space. With many offering you a pay-as-you-go model, now, even the sole-practitioner can deploy the same solution as the largest regional and national firms. No longer is technology a differentiator of firm size.
- Scan-and-Populate. If you were to ask me a few years ago about this technology, I would have told you to wait. Today, I recommend embracing it. Although there are only a handful of vendors in this space, all of them have unique products in this space. At my firm, more than 90 percent of 1040s processed were run through scan-and-populate technology, enabling auto-population of your tax return from the simple scanning of source documents. Keeping it really simple, all of the W-2s, 1099s, 1098s, K-1s and other forms are filled in with data, delivering a “mostly populated” return to the preparer. The preparer then validates the information that was auto-populated and inputs information that fell out of the process, such as, for example, charitable contributions, schedule C information and schedule E information. Scan-and-populate saves a significant amount of time in the preparation process, and should result in increased realization. Remember, your preparers did not go to school to learn how to input numbers into input fields in software. Use scan-and-populate to make better use of their skillsets.
- Portals. Still delivering tax returns by paper? With the advent of electronic signatures and better collaborative portals, delivering a tax return today, electronically, is the only way to go. Forget about email, CDs and memory sticks. Today’s portal solutions are widely available and secure. They allow for easy collaboration with your clients. To help in getting the portal concept to “stick” with your clients, try touching them more than once a year. Bring them back frequently to the portal by delivering reminders about estimated taxes, updates on tax law changes, information about firm events and other announcements. The more they come back, the more likely they will embrace the portal as a primary delivery tool, not to mention the chances that they will remember their passwords.
- Scanners on Every Desk. You may think it’s overkill, but placing a scanner on every desk will help your staff to embrace document management. For a few hundred dollars, partners and staff can easily add additional tax source documents, as they are received after-the-fact, to the originally scanned documents. In addition, we encourage our partners and staff to save all client dialog concerning notices, discussions and planning that took place during the year. An individual desktop scanner really simplifies that process and increases the likelihood that every important discussion with and about the client makes it into the central repository.
These are just four of the many technologies that you could deploy to help advance your tax practice. If the “right” tools are deployed, it could result in a smoother, more profitable tax practice!