Top 5 Technologies to Improve Your Tax Practice

The accounting sector is rapidly transforming because of efficiency optimization available through latest technologies. Accountants and CPAs today are no longer loaded with task-oriented projects.

Instead, with the transformation in dynamic accounting technology, accounting processes are becoming more automated, and the role of accountants is changing to a business advisor. Technology is now seen as the solution for collaboration, lack of human resources, and time management.

A scan of 2018 horizon reveals the business perception of emerging technology:

Chairman of AICPA, Kimberley N. Ellison-Taylor, recently noted that technology is on top of her list of important trends as it will drive many opportunities as well as challenges in the future. But how can accountants keep up with the technology trends?

By simply understanding how technology can make their lives easier and accounting practice more profitable, accountants can optimize their performance. However, these top five technologies are of particular interest to accountants, CPAs, and tax professionals because of their potential to transform key aspects of their profession.

1. Cloud-based Tax Preparation Application

Cloud is no longer a trend that companies are waiting to adopt. If your firm is still avoiding cloud technology, then you need to give up on the fight because it is definitely a losing battle. If you are not happy with your in-house tax application process or looking for a change, then move to a cloud-based tax solution. Leveraging the power of cloud technology allows clients to get real-time updates.

Moreover, being an accounting firm and not a technology company, there is no need to hire IT consultants to configure in-house servers and get software updates. There are many third-party cloud providers that offer you with a pay-as-you-go model. Even a sole-practitioner can get cloud solution for tax application software. Technology is no longer a differentiator of the firm size.

2. Artificial Intelligence

Tax professionals have always been the guardians of compliance in a complicated field. With the introduction of innovative technologies, their roles have started to change. The days of being a bookkeeper or an accountant with only data-entry tasks are over. Today, when data is easily accessible, there is an opportunity for them to evolve from being a responder to playing a key role in the company’s development processes.

In the recent years, there has been a significant transformation towards risk and compliance management, considering a transparent and data-driven organizational culture. Artificial Intelligence (AI) is already in use for Optical Character Recognition (OCR), and voice recognition and can easily be adapted in other areas of tax compliance. AI-enabled applications can deal with more complex tasks such as answering subtle taxation queries from a document or discovering fraud.

According to a recently released report by PwC, AI would become digital “assistants” which potentially can replace the basic abilities of first and second-year associates.

3. Social Media

People in the tax industry know that being conversant about the tax code isn’t the only important qualification they need to do their job. They also have to be good at networking and building relationships to get new business. For many tax preparers, social media is not an obvious marketing channel. If this is how you feel, you need to rethink that notion.

Social media is a medium to build relationships which can be easily used by tax preparers to help gain visibility, be recognized as an expert, build their network online, keep the clients informed and provide better and prompt customer service.

While social media isn’t a magic bullet, it can have a positive impact on growth, reach and exposure when used with other marketing techniques.

4. Mobile Accounting

Working on smartphones has become a trend for many SMBs. Smartphone and apps are no longer just about entertainment – they are being used to conduct business. Mobile accounting provides tax preparers many benefits such as on-demand data and information.

With real-time access to data, tax preparers can serve their clients more efficiently – even if they are on the go or different geographical location. There are many mobile apps which are dedicated to tax preparation processes and can be instantaneously accessed. Starting a laptop or computer every time you want to work, and then go online is a waste of time when you can get all the information with just a single tap.

Moreover, the increased connectivity through smartphones allows for better relationships with clients. If any issue occurs which needs an immediate reply, you have access to the data you need, no matter where you are located. It increases customer loyalty and helps align clients more closely with your business.

5. Automation

Whether you’re looking to increase productivity or just getting started in the business, the benefits offered by automation tools and technologies far outweigh the costs. Various tools for accounting and bookkeeping available today are transformative for tax preparers as well as their clients.

They can now complete their tasks five times faster than if they were done manually, which ensures that the tax preparation process is automated and effortless. Professionals need not spend their time on mundane yet important tasks.

Sharing data with clients is made simple by automation tools. You can automatically export or import the required information. Everyone involved in the process can simultaneously access the data, which encourages real-time collaboration among different users.

Automation brings in many benefits for tax professionals. Automated workflow is being put into practical use by many accounting firms and tax professionals. The labor-intensive tasks let bookkeepers have a limited number of clients. However, with automation, they have enough time and are able to take on more clients who further helps in the growth of the firms.

Final Words

Technology can be a differentiator among a good and great tax professional. There are just five technologies which professionals can implement to help them advance their tax practice. By differentiating themselves among their competitors using these technologies, tax professionals have an excellent chance to increased profits and productivity.

With the right tool or technology, one can have a smoother and more profitable tax practice. Tax professionals adopting and embracing these technologies would serve to advance their profession themselves.

If you think we’ve missed something, share in the comments below!