A Case for Tax Practice Digital Transformation

INCREASING EFFICIENCY WITH TECHNOLOGY

Move beyond paper and pdf-fillable tax organizers to online client data collection that will minimize client manual effort…

In a recent Journal of Accountancy tax feature article [4], The author, Maria Murphy points out that “tax preparation can require a lot of manual processing, but having clients use software (like QuickBooks), moving more activities to the cloud, and outsourcing work to third parties with automation capabilities are all ways firms can use technology to ease the burden on staff.” 

Comments from Brandon Lagarde, CPA, J.D., partner at EisnerAmper, and chair of the AICPA Tax Practice Management Committee said “In the past year [2023], we used an electronic organizer, a fillable PDF, but this still requires a lot of manual effort. Some clients still like their paper organizers and don’t like electronic organizers and tax forms.”

ORGANIZERS HELP TAX PROFESSIONALS

In a recent blog post, from Content Snare, the focus was on how to choose a tax organizer [5], stating that “Transitioning from traditional tax preparation methods to digital tax organizers marks a significant shift in the tax workflow. The streamlined approach they [digital tax organizers] offer helps you focus on what truly matters, and that's the landscape that’s delivering accurate and timely services.”

The author advances how digital tax organizers help tax professionals via 5 key benefits:

• Reduce emails,

• Centralize tax documents,

• Keep information secure,

• Collaborate with clients, and

• Reduce tax preparation appointments.

It’s Time to Retire Traditional Tax Organizers

The CPA Practice Advisor Top Technology Initiative Article [6] discusses preparing for a new tax year by considering integrating the new generation of tax organizers in the client data gathering and thus retiring the traditional approach to tax organizers, i.e., paper-pencil, pdf-fillable, etc.

The author, Randy Johnson, sees the problem as:

• “The tax organizer hasn’t changed in 30 years (!!),

• 2/3 of tax firms get fewer than 50% of their tax organizers back,

• Half of the firms get 0% to 25% of organizers back,

• Not receiving organizers creates significant problems for the profession (liability, efficiency, client satisfaction),

• Organizer completion rates will continue to get worse (demographic changes, widening gap vs. good consumer software).”

He sees the opportunity as:

• “Firms can address the biggest pain point in the individual tax return process - gathering client data,

• Firms that make clients happy stand to gain in many ways: market share, staff/team, client satisfaction, online reviews, etc.,

• Clients are ready. If your client has an email address, they can be an online client (remember COVID?).”