On June 2-3, 2020, Boomer Consulting, Inc. had the honor of sponsoring Wolters Kluwer’s Audit Talks LIVE virtual conference. The conference brought together audit experts and technologists to talk about the rapidly changing audit landscape and how firms can transform their practices to better serve clients.
One popular session focused on how firms can get closer to the goal of a “no-touch” tax return. I thought it would be a good opportunity to share some of the takeaways from that session and insights from the hosts, Joel Ortner, Senior Technology Product Manager, and Jody Padar, Founder and CEO of New Vision CPA Group.
3 keys to a no-touch tax return
This session provided a real-world example of how Padar has been able to move her firm closer to a true no-touch tax return using CCH Axcess Financial Prep and CCH Axcess Tax.
To get there, it really takes three elements:
1. Access to data
If you have direct access to your client’s data, you can save a lot of time that would otherwise be spent manipulating that data and formatting it to be read by different applications.
Having a direct connection to your client’s data is ideal. Whether it’s in QuickBooks Online or Xero, you can eliminate errors that happen when you have to manually key in numbers.
2. Automation tools
Once you have the raw data, how can you automate the process so less manual tasks are being performed? One of the most tedious steps many accountants face when preparing a tax return is grouping accounts so the numbers in the trial balance are ready to go into the tax return or financial statements.
Intelligent grouping of accounts so your trial balance accounts are grouped for the tax return. CCH Axcess Financial Prep can automatically group accounts based on the account name. All the preparer has to do is review the automated grouping.
Another really valuable automation is the ability to send numbers from the trial balance to the tax software. There are several ways to do this, but the best way is to create a link between the trial balance and the tax return. That way, if the numbers on your trial balance change in any way, they’ll automatically flow over to the tax return and schedules.
3. Machine learning
Machine learning is a type of artificial intelligence that observes user actions taking place in the application, and gradually gets smarter and applies what it’s learned over time. The popularity of machine learning is really exploding right now because it can save so much time and reduce errors.
CCH Axcess Financial Prep takes advantage of machine learning technology because if the user changes any of the default groups or assigns accounts that were left unassigned by the software, the system notices and learns from those actions. The next time the user imports a trial balance that has similar accounts, it has a better idea of how to group those. In year one of using Financial Prep, it might take some time to review automatic groupings, make changes, and assign unassigned accounts. But year after year, Financial Prep will keep those groupings updated, even if IRS forms change. And it will get better at automatically classifying accounts the more you use it.
Practical ways to achieve a no-touch tax return
During the session, Padar shared how her firm has been using CCH Axcess.
They’ve been using the CCH Axcess platform for several years, but recently started using Botkeeper to automate her client’s bookkeeping. With the bookkeeping automated, her team could simply review the QuickBooks Online file for tax journal entries and essentially port them into a tax return.
When the beta version of CCH Axcess Financial Prep became available, Padar was interested in seeing if they could use it to reach the ideal of a no-touch tax return. Using the software, her accountant could review a file for which all the accounting had been completed, make a handful of journal entries, and sync QuickBooks Online into Financial Prep. Then the software created tax categories and exported the information into CCH Axcess Tax, truly creating a no-touch tax return.
Of course, her team still reviews the return to ensure the information came over correctly and the tax return is in balance. However, the entire process is a lot faster. All the accountant has to do is perform a high-level review as opposed to spending a lot of time in the weeds of data entry.
That’s really what the no-touch tax return is all about. As Padar says, “it’s about the opportunity to move into the future. Where do we want to be? Do we still want to be playing with the data? Or do we want to let artificial intelligence and machine learning do the data stuff so we can take an advisory role? A tax return that used to take an hour now takes less than 10 minutes. That’s a real time saver and it allows your firm to grow.”
Check out the recording of Jody’s session, along with the rest of the Audit Talks LIVE recordings too. You’ll benefit from the insights that your colleagues share.