With every tax season, there is always the same burning question: How can we drive efficiency at every stage of the process? For some, the question might be: how do I prevent the same undue stress I felt this year?
Data collection is an area in your tax cycle where digitalisation could drive efficiency, just by changing one small but time-consuming process. Digital data collection is an end-to-end, paperless compliance process made up of many connected services customisable to your practice.
Traditional data collection processes are manual and time-consuming tasks. The process often involves generating a bespoke checklist for every tax return client with a personalised email or letter to accompany it. It is heavily reliant on manual document creation and review and, for those still sending information request letters via mail, significant postage costs.
Your clients too will be spending their own time collating information and sending it back to you, only for your team to manually rekey that information into the tax return. This not only wastes time from beginning to end but also increases the risk of human error.
Why you need to digitalise your data collection process today
Digital processes are rapidly improving the quality of data and significantly reducing the labour burden associated with obtaining and analysing that data. By eliminating the manual entry process, you drastically reduce the time and risk for human error.
There are four main reasons to switch to software that allows you to digitally collect and request data.
Speed and efficiency
Digital data collection tools can generate digital information requests that go to clients via a secure portal. Clients can then view what information they need to provide and compare it to the information provided in the previous year. They can then securely upload any supporting documentation for the accountant to review and, once reviewed, this data can be used to populate the tax return.
Digital data entry can complete the task in seconds, leaving you the time to validate the data rather than type in numbers. You will have complete visibility of what is being uploaded by your client and when.
Chasing clients for information can also be wasted time. The digital process end-to-end is more efficient for both the practice and the client.
Reduces risk of error
Even accountants can be prone to error when manually entering volumes of data at a time. You, and any practice for that matter, while brilliant, can also make mistakes, typos or errors, even if you are 100% rested and focussed. With your workload, this is not always the case.
Digital data entry reduces that risk because the data is transferred automatically from the source documents. What’s more, if practices are using an integrated suite of software for all their compliance needs, the data is integrated throughout the suite without having to rekey data over and over.
The time otherwise spent entering the data can be spent on validating the data to catch errors and correct them early on, therefore improving the quality.
Improved data security
Paper can be destroyed, lost or mishandled. Manual data collection has a high risk of this taking place, risking loss of important information. Furthermore, paper records that have been damaged create a problem further down the line if the data needs to be accessed again.
Digital data is easily and inexpensively stored and can be encrypted for security. Having real-time access to data as clients upload it enables you to track who has accessed or uploaded the data. You always have greater control over that data.
Manual data collection is a costly exercise, both in time and money. Storing paper records is also an expensive task particularly with the additional costs needed for security, archiving and retrieval.
Furthermore, paying for employees to complete this time-consuming task can get expensive. In addition to the chargeable hours spent on manual data collection, this not only equates to wasted time but wasted expenditure.
Whilst there is always an added cost from a software licence, your practice would reduce its overheads associated with data, simply by speeding up the time to complete the task.
The benefits of digital data collection are just the start, embracing smart tax solutions designed to make your compliance season easier and faster is the goal. Choose software that can support your entire tax process, allowing you to increase capacity and focus on higher value advisory services.
CCH Personal Tax simplifies and streamlines every step of the tax return process, from data collection and data entry through to review, approval and online filing. This market-leading software enables your practice to deliver high-quality tax work in the quickest possible time.