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  • Writer's pictureAlik Mock

Using Tax Automation Software To Transform Your Accounting Firm

To succeed in the competitive business environment, accounting firms must continually review their processes, staff roles, and how they serve their clients. Outdated tax processes can lead to inefficiencies, errors, and frustrated clients and staff. By implementing new technologies and tax automation software (including client onboarding), you can easily outperform your competitors and expand your client base capacity.

1. The Most Time-Consuming Activities In A Tax Cycle

Tax compliance services can be extremely time-consuming for accounting firms. As an owner, you’ve probably experienced the many inefficiencies that arise when trying to complete client work without tax automation software, including:

  • Asking For The Client’s Data / Documents: Chasing clients for essential financial data can be a frustrating and time-consuming task for you and your staff.

  • Following Up With Clients: Persistent follow-ups to obtain necessary data can strain client relationships and waste employees’ time.

  • Delegating Tasks To Internal Teams: Managing internal teams and distributing tasks manually can lead to inefficiencies, errors, and client work falling through the cracks.

  • Manual Document Management: Manually storing documents increases the risk of misplacing or mismanaging critical files.

  • Responding To Client Requests: Managing client inquiries across various communication channels can be overwhelming and time-intensive.

These challenges result in frustration and lower staff morale, causing higher staff turnover and increased retraining and recruitment costs. Inefficient and manual systems can also impact client satisfaction, billing revenue, and profitability.

2. The Benefits Of Tax Automation Software

Tax automation software can save your employees time and reduce their administrative workload so that they can spend more time on billable client work. There are various benefits to using online accounting and tax automation software, including:

  • Syncing Your Team: Automation ensures that everyone in your firm is on the same page, reducing confusion and improving collaboration.

  • Tracking Progress / Measuring Results: Data-driven decision-making becomes easier with tax automation software, allowing you to accurately measure your firm's performance.

  • Automating Data Entry: Reduces administrative load and operational costs.

  • Removing Ambiguity: Having clear processes and responsibilities boosts team morale and productivity.

  • Improved Communications: By using automated reminders for clients, and workflow automation for staff, you can keep everyone informed.

  • Reducing Time and Cost of Tax Preparation: Streamlining repetitive tasks such as data entry, calculations, and form-filling allows your team to work more efficiently, completing more work in less time.

  • Improving Accuracy: Tax automation software minimizes errors, which is crucial for complex tax returns while ensuring faster processing.

  • Enhancing Compliance: Automated systems help maintain compliance with evolving tax laws, safeguarding clients from penalties and interest.

  • Document Management: Implementing a document management system with regular backups and online accessibility can reduce the loss of important files.

  • Remote Working Arrangements: If you choose to implement a fully online system, you can offer your employees the option to work remotely, improving staff retention rates and reducing overhead expenses.

3. When To Start The Automation Process

The perfect time to implement tax automation software was yesterday. The next best time is now. If you’re unsure whether you’re ready to implement tax prep automation in your firm, consider these questions:

  • Are more than 50% of your clients put on an extension each year?

  • Do you lack insight into your team's day-to-day operations?

  • Are you unsure why your firm's performance and growth remain stagnant?

  • Does your firm avoid using automation or online software?

  • Is your staff turnover rate more than 10% per year?

  • Do your staff spend too much time on administrative work?

  • Is your team productivity less than 80% in billable hours?

  • Do client jobs take more than 1-2 weeks to complete?

If you answered “yes” to any of these questions, it’s time to look at automating your business processes. By having a plan in place to automate and grow your accounting practice and tax compliance services, you will ensure your firm’s success for years to come.

With tax automation software, it’s important to start small and scale up as needed. Make sure your employees are on board with the new changes. And be patient when waiting for results. Implementing cloud-based software doesn’t have to be stressful. It might just revolutionize your firm.

Is any of the answers yes? Then it’s high time for you to think about Automating your business structure.

4. Examples And Types Of Automation

There are many ways to implement tax automation software in your accounting firm, depending on your needs and goals:

  • Data Entry Automation: Software that automatically imports data from your clients’ W-2s, 1099s, and other tax documents.

  • Document Requests: Streamline the process of requesting and receiving tax documents from clients with software like Soraban or Canopy

  • Automated Updates to Clients: Keep clients informed and engaged throughout the tax cycle with automatic messages, and use autoresponder email sequences for onboarding new clients.

  • Track E-File Status: Monitor the status of e-filed returns efficiently.

  • Automated Reminders to Internal Teams: Ensure tax compliance tasks are completed on time through automated reminders via Slack,, email, or other communication channels.

  • Preparing and Sending Tax Organizers: Simplify tax season preparation for clients with automated checklists and organizers.

  • Document Management Systems: Seamlessly integrate data with tools like ShareFile or OneDrive with automatic backups.

  • New Client Onboarding: Gather client tax information, save client documents, communicate important updates, and bill new clients automatically.

You don’t have to implement these tools all at once. By reviewing your internal systems and processes, you can see where the main challenges are. Then, you can build a custom solution for your tax compliance services (or ask us to do it for you).

5. How To Implement Tax Automation Software

Here’s how to successfully implement tax prep automation in your accounting firm:

  • Document Your Existing Tax Prep Process: Start by analyzing your current tax and practice management setup. At Genwise, we like to use Swimlanes.

  • Identify Areas for Improvement: Identify processes that can be automated, streamlined, or eliminated if not necessary.

  • Find an Internal Champion: Appoint someone within your firm to champion the tax automation software project and ensure staff buy-in.

  • Make Improvements: Upgrade your tax prep process, connecting native tools and using custom code where necessary.

  • Train Your Team: Ensure your team is educated and involved in the process to boost adoption and understanding.

  • Monitor and Tweak: Continue to monitor and test your automated processes and make adjustments as needed. By regularly reviewing your systems, you can make necessary refinements and updates in the next 3, 6, and 12-month cycles.

6. Calculate The Future Cost Of Your Current Decisions

One of our clients, DrillDown Solution, experienced a 100%+ increase in their firm’s operating capacity after we implemented various tax automation software solutions and modernized their internal processes.

"We’ve done twice the amount of tax returns with fewer people." Karl, CEO of DrillDown Solution.

Where would your accounting firm be in the next one, two, or five years if you implemented tax automation software and doubled your operating capacity?

7. Conclusion

Incorporating tax automation software into your accounting firm's operations is essential to remain competitive in the accounting industry. With the right tools and processes, your firm can thrive in the digital age and provide exceptional service to your clients.

Don't wait – start automating your tax compliance services today. Book a free call with Genwise to find out more. We’re experts at helping accounting firms implement tax prep automation and get the most from their software stack.

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