Digital tax workflow: 3 myths about tax technology


When a firm wants to improve its digital tax workflow, technology improvements can make a big difference. However, a few popular myths can get in the way of creating a truly efficient workflow. Here, we debunk three digital tax workflow myths that might be holding your firm back.

Myth 1: Remote access is the same as the cloud.

Since many people think remote access is the only benefit of the cloud, they assume remote access equals cloud. In fact, there are four key differences:

  • Architecture: Software vendors build cloud-based software to run in the cloud. In contrast, hosted programs are usually older programs that run on a traditional server.
  • Accessibility: Users access cloud solutions directly from their devices, while they use virtualization software like Citrix or VMWare to access hosted solutions.
  • Integration: Firms can more easily configure cloud solutions to integrate with other solutions. However, hosted solutions tend to create barriers between programs and devices. Frequently, hosted solutions can integrate only with other software that is installed on the host’s server.
  • Maintenance: Cloud solutions are managed and supported by the cloud software provider. Hosted solutions, on the other hand, rely on the hosting provider or your firm’s internal IT staff to maintain security, install updates and provide support. These services often add significant expenses to your IT budget.

Myth 2: Integration means syncing data between programs.

Integration can mean many different things, but programs that work together at a structural level are more efficient and less prone to errors than solutions that work together at a point-to-point level. Point-to-point integration relies on syncing multiple databases, which means you still have multiple sources of data, increasing the likelihood of duplicate data, inconsistent data and out of date information. Having a single database for your client and staff data can provide efficiencies throughout your firm. Your data is more accessible, your system is more extensible (meaning you can more easily add new functionality) and your total cost of ownership will be lower.

Myth 3: Clients want you to keep fees as low as possible.

Some firms put off technology upgrades because they want to keep fees as low as possible for clients. However, in a recent survey, “value for fees paid” was low on the list of important factors clients consider when choosing a CPA firm. Only 28% of respondents indicated fees were an important factor. The number 1 factor cited was timeliness of services. In other words, clients are willing to pay a bit more for more efficient service. Many firms even charge their clients a technology fee to help offset the costs of necessary technology upgrades.

AUTHOR

Aimee Hall

Product Marketing Manager at Wolters Kluwer Tax & Accounting

All stories by: Aimee Hall

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