Beyond tax preparation, clients are seeking insights into the numbers and help with strategic planning, managing risk, controlling costs and driving business decisions. Future-ready CPAs, therefore, are investing in technology that will reduce the time spent on compliance so they can devote more time to analyzing the data and providing client insights such as industry trends, key performance indicators (KPIs) and analysis on strategic decisions.
In the past, common tools to help improve the efficiency of tax preparation often meant having a central document storage, moving from paper workpapers to electronic workpapers, importing general ledgers into the tax preparation software and utilizing electronic signature tools such as DocuSign. Today, technology such as robotic process automation (RPA) is being utilized to automate highly manual, repetitive, error-prone tasks.
Here are some practical ways RPA can be used to help:
- Automate the income tax extension process and as well as files for common annual fee forms. Staff can populate control sheets and then a bot can take that information, log into the third-party tax preparation software, populate it to generate the form, qualify the form for e-filing and save it to a document storage depository.
- Extract information from Schedule K-1s, summarize data points and further analyze and/or import directly to the tax software. This tool will be particularly helpful with the new rules in effect for 2020 for calculating partner capital accounts under the tax-basis method. Staff will be able to pull and summarize K-1 information for prior years in a matter of minutes.
- Automate and streamline the tax assembly process. A bot can download a return, insert and extract pages, collate returns, send the return for a signature and eventually save it to the document storage tool as someone from the tax processing team previously would. This automation can significantly decrease the tax assembly time as well as increase the turnaround time to clients, especially during peak busy season.
The investment in dollars and time needed to introduce new technology can be significant, but it will be essential in maintaining a profitable tax return preparation operation and enabling staff time to focus on providing the higher-value services that clients are seeking. So, jump in, the water is not so cold!