Tax Technology Trends: What’s Old is New Again

It is time to start viewing technology as your best friend.

The goal of our work hasn’t changed much in the past thirty years. However, how we perform that task has drastically changed. This change has forced our people to have different skills than before.

While the Cloud is all the rage now, accountants actually used cloud services before anyone even heard the term cloud. When we look back at the past, firms would not even have tax software installed at their office. Instead, they would mail input sheets across the country and wait for a completed return to be mailed back. CPA firms were the original cloud adopters. We just didn’t have a name for this service. It was cloud 1.0 delivered by snail mail. While many firms today are leery of the cloud, they don’t realize that they used the cloud thirty years ago. And now, like all great trends, it is back in style.

As happens in life, what is old is new again, but with a different name. The trend is the same: adaptation, evolution, and change. While the cloud of today looks nothing like the cloud of old, the transition for our people is happening once again. In the past, a staff accountant had to manually calculate the numbers on a tax return and complete the return by hand. This process resulted in a strong understanding of a corporate tax return, where the numbers all flowed. However, that all changed once CPA firms adopted tax software that did all the math. Gone were the days of manually calculating numbers on returns. Our firms, our people and our industry evolved, and we are better off for it. I don’t know a firm in the country doing returns by hand anymore.

Fast forward to today where  few firms will spend time making a staff accountant, fresh out of school, manually prepare a tax return. Instead they will simply teach them how to use the software. We have accepted the benefit of using the software. Accountants today need to learn first and foremost critical thinking, and not just data entry.

At Thaney & Associates, we looked at the transition from paper returns to digital and how it relates to technology challenges we are facing today. We asked ourselves why we were making our staff manually input the numbers into corporate tax returns vs. automatically linking the data directly from CCH ProSystem fx Engagement. Like most firms, we were hesitant at first to make the switch because of what that “change” might mean. We had manually keyed data into corporate returns ever since the firm got its first tax software many years ago, so we wondered why should we change now.

It wasn’t until we realized that we were ignoring the transition of using the tax software to begin with, which everyone agreed was the right decision.

We made the decision to learn from our past success. We challenged ourselves to step outside of our comfort zone to move the firm ahead. As a result, we now link 100% of our corporate tax returns from Engagement into CCH Axcess Tax, and we won’t go back.

Engagement also provides the perfect backbone to electronically keep our tax workpapers. We are further able to leverage Engagement to improve the effectiveness and efficiency of our corporate return preparation process. This allows our people to focus on adding value. It produced a major win for our firm, our clients, our staff, and our ability to attract, retain, and engage top talent.

So how do you start?

This is the best part for most firms, because you are most likely already 90% of the way there. You just need to do the hardest part, be open to change and view technology as a key tool.

Like most firms, we were using the built in tax grouping reports as part of our process to complete corporate tax returns. But we were not doing the final step of linking to the tax software. We had done all the setup work without taking advantage of the big final payout.

One of the benefits of using both Engagement and CCH ProSystem fx Tax or CCH Axcess Tax is the ability for Engagement to link directly to the tax software through the Dynalink function. Dynalink allows any future changes and journal entries posted into Engagement to update in the tax software.

If you aren’t sure how to setup the Dynalink, check out this great support article which can walk your team through the process:

The result

Our people love that they are allowed to leverage the technology solutions we have at the firm. It helps us to have a more appealing culture as well. As a firm, we are better able to attract top talent as we allow them to focus on critical thinking and adding value to our clients, rather than just data entry.

Our firm  saw a 50% reduction in our corporate tax return preparation times  since we mandated that all returns be Dynalinked. The staff uses that time savings to think about adding value to our clients, tax savings strategies, operating efficiencies, and other possible improvements our clients can make. They love this process because it is fast, efficient and the computer doesn’t make transportation and data entry errors.

Firms are always leery of adopting new technology solutions because of  the budget impact that can come with the change. The best part of leveraging this solution is that you already have it at your firm, so you won’t see an increase in your IT budget. Your firm will simply be better using the technology you currently have.

Stop leaving an easy win on the sidelines. Leverage the amazing power of Engagement to conquer your corporate tax returns by embracing what our profession already learned many years ago when we first harnessed the power of tax software.

If you aren’t sure where to start, feel free to reach out to me on social media.

Changes are coming to the accounting profession. To find out what you should expect, download the whitepaper, The Future of Tax.


Garrett Wagner

As a business therapist at Thaney & Associates and CEO of C3 Evolution Group, Garrett Wagner CPA/CITP escorts firm leadership through succession planning, the technology evolution, and millennial talent development. Through his monitoring and use of evolving technologies and industry best practices, he brings “outside of the box” thinking, refined procedures, and awareness of traditional methods, with an eye on the future. Garrett’s succession planning process is a success factor on the road to reaching your lifetime professional goals of growth and profitability. His background leads partners to develop a plan, in a time when firm retirements are at a historic rate. Through his personal experience with technology, Garrett delivers ROI to firms. He will escort you through the identification of unique needs, choices in the digital market today, and best practices to maximize its use within the firm, removing the struggle to keep up while realizing its rewards and benefits. Also, talent needs to be developed from the moment of firm connection. Garrett’s leadership training curriculum focuses on enhancing emotional intelligence skills. He will work with the senior team to groom their understanding of millennial CPAs, keys to motivating these teammates and proven methods to actively engage them within the firm, halting near-term brain drain. Through succession planning, technology and millennial talent development, increases will be realized in work efficiency, work quality, and employee satisfaction, while training tomorrow’s leaders, as today’s leaders move on in their life’s journey.

All stories by: Garrett Wagner