By Roman H. Kepczyk
Quantum of Paperless: Technology Guide & Checklist
The most important aspect of transitioning the firm’s tax process to a digital environment is managing electronic files that are no longer physically viewable in assorted stacks around the office. This requires a digital tax workflow system that lets everyone know the status of every return and easily connects that person to digital copies of the return and the source documents.
MORE: Retaining Documents: How Long and Who Decides? | The 4 Buckets of Firm Knowledge | Internet Bandwidth: How Much Is Enough? | Why You Need Windows 10 with Automatic Updates | Laptops vs. Desktops
Exclusively for PRO Members. Log in here or upgrade to PRO today.
Under traditional manual tax systems, firms utilized due date tracking databases that identified when a return was due, but not what information was missing, or the preparation, review or extension status, which was often recorded manually on a physical routing sheet.
Many firms attempted to set up each of these statuses within their practice management systems via projects. It was soon discovered that in most firms, administrative personnel were the only ones updating the status when information was received and when the return went out. Those steps that were to be updated by the professional staff might be updated early in busy season, but compliance dropped off significantly the further along tax season went as they were not forced to update the status by the system. This usually resulted in many professional staff keeping their own manual lists or spreadsheets, which doubled the work, and firms having weekly staff meetings to update the various workflow lists.
“79% of firms had implemented a digital workflow tool.” – 2019 CPAFMA Survey
Some applications such as Intuit’s Lacerte integrate the workflow steps into their tax programs, which can work well if properly utilized.
Typically, most firms did not have this option available, which led to development of a new breed of workflow application that
- tracks the due date status,
- monitors the volume of returns at each status and assigned to each person,
- tracks any preparer or tax production notes and
- integrates with email to improve communications.
This information is attached to specific source documents that support easy access to all tax return information.
Firms with a functioning document management system typically use an integrated workflow tool. Examples are Thomson GoFileRoom FirmFlow, WoltersKluwer/CCH Workstream, OfficeTools WorkSpace and Doc.It Workflow Manager. Integrated tools require less training and are often delivered at a lower cost than standalone tools.
Firms without a document management system can explore a range of workflow tools. Three potential tools for managing tax workflow are Drake GruntWorx, SurePrep and XCM Solutions. While SurePrep integrates workflow with their bookmarking and outsourced tax processing, XCM and GruntWorx are a web-based workflow system designed specifically for accounting firms. XCM can be integrated with either WoltersKluwer/CCH Document Management or Microsoft Windows Explorer for managing digital tax returns and client source documents whereas WoltersKluwer/CCH’s Workstream is integrated with their latest Axcess Tax, Practice, Portal and Document Management products. We believe that workflow tools are THE key to successfully managing today’s digital practices and help facilitate effective front-end scanning and digital tax optimization processes.
RECOMMENDED ACTION: Implement a digital workflow system to track due dates, status of returns, staffing on projects and links to source documents.