Guide to planning a 1040 digital tax transformation
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Many tax firms know their tax preparation process is not as efficient as it should be—and it’s costing them money and opportunity. They want to do a better job at using technology to streamline data collection, automate data entry, enhance the review process, and improve service delivery. However, they don’t know where to start the needed transformation.
That’s why we’ve created this simple guide outlining how firms can complete the planning phase of a digital 1040 tax transformation. Taking a strategic approach to the planning phase is crucial because it prepares staff and clients well before the official rollout and allows firms to sidestep preventable errors. It also lets firms enjoy the promised return on investment (ROI) that accompanies such upgrades.
Tax season is hard enough: you don’t need to make it harder on your team and clients with outdated technology and a stagnant process.
Modernizing document collection
Requesting and gathering the necessary client documents and data is the first phase of the tax prep process and often the most challenging. That’s because traditional methods of data collection—paper organizers, portals, and file-sharing services—are extremely inefficient.
Paper organizers that firms print out and mail to clients are probably the greatest source of workload compression. Clients don’t mail them back until they’ve received all their W-2s, 1099s, K-1s, etc., leaving preparers to wait on key information late into tax season.
Portals have many of the same challenges as paper organizers, plus clients must download and print out documents, scan them, and upload them to the portal. File-sharing software can present many of the same inconveniences. Therefore, it is important to leverage the right client collaboration tools that facilitate data collection and integrate with the tax software to automate 1040 preparation.
Meeting client expectations
Improving the 1040 tax preparation process isn’t just about achieving better efficiency; it is also about meeting client expectations for convenience and accessibility. TaxCaddy, a highly secure client collaboration platform, can help. It allows you to reduce workload compression, streamline the gathering of documents, simplify delivery, and improve the overall client experience.
It can be accessed via app on an iPad, iPhone, or Android device, as well as in a browser. It connects taxpayers and tax professionals to streamline communication, document gathering, questionnaires, e-signatures, tax payments, invoicing, and tax return delivery. It also seamlessly integrates with UltraTax CS.
Automating data entry
The process of manually putting together work papers lacks standardization, is highly inefficient, and increases the risk of errors. Firms looking to effectively improve the tax workflow process must first modernize document collection and then automate data entry. It is important to leverage the right technology and traditional Optical Character Recognition (OCR) is not likely to measure up.
Advanced scan and populate software is the most powerful tool a firm can employ. 1040SCAN is a unique OCR solution with four distinct versions that allow firms to combine software and services according to their needs. SurePrep is the only vendor in the industry that provides an optional verification service.
1040SCAN utilizes artificial intelligence (AI) and machine learning to improve results. It bookmarks and organizes source documents into a standardized work paper index that follows the flow of the tax return. Furthermore, it integrates with UltraTax CS, which streamlines data entry, simplifies the filing of advanced returns, and provides ultimate integration capabilities and flexibility.
Revamp the review process
Reviewing paper-based or PDF work papers is expensive and inefficient. Reducing review time by increasing the efficiency of the review process is a major profitability booster.
SPbinder streamlines the review process by tracking what and when changes were made, and by whom. This solution helps you to minimize review time, standardize work paper preparation, and increase staff leverage.
SPbinder makes it easy to manage digital workpapers—and, in conjunction with 1040SCAN, automatically organizes them into a standardized index that follows the flow of the tax return. It also integrates with UltraTax CS, which provides robust diagnostics and hyperlinks to relevant guidance and research.
Better delivery to clients
Leveraging a solution that makes it easy to deliver final tax returns, tax payment vouchers, and the firm’s invoice is essential for any firm that wants to remain competitive.
TaxCaddy makes it easy to securely deliver the clients’ tax returns in PDF format for final approval and storage. It also makes delivering tax payment vouchers and invoices seamless. Furthermore, TaxCaddy allows clients to e-sign Form 8879, make tax payments, and pay their invoices directly from an iOS or Android app.
Then there’s the question of what does the firm, and its clients, do with the tax information? Helping taxpayers interpret and consume the information is obviously important, as well as mining the data for additional growth opportunities. Therefore, it is important not to overlook the value of customizable data-mining tools provided by TaxCaddy.
A talent management advantage
Clearly, the stresses of tax season do not help in your efforts to keep your most valued employees happy and productive… and to continue to grow your team.
Leveraging tools that help ease the heavy workload of busy tax season means that staff are less stressed and have the time to focus on more fulfilling work. The right tools can also help any firm address these areas by creating better efficiencies so you can put your money to better use elsewhere in the practice. This can include making investments that improve the long-term financial health of your firm, compensation for employees, or providing your employees the opportunity for growth at your firm.
Planning a 1040 digital tax transformation
Client expectations are evolving. Tax professionals no longer want manual data entry to be part of their job description, and top talent is migrating to firms that have automated those processes. Firms that went paperless without planning and implementing a fully streamlined, digital 1040 tax process continue to face grueling workload compression. The technologies exist to solve these challenges, and they’re quickly becoming the industry standard.
Thomson Reuters is a leader in 1040 tax automation, and experts at helping firms leverage our products to reach their full potential. We’re happy to provide you with the support and guidance you deserve during this transformation.
Learn more by reading our whitepaper: Find your flow: 1040 tax workflow best practices.
