For most tax preparers, tax season means long hours, difficulty in finding and managing seasonal staff, chasing clients, and dealing with a mountain of administrative tasks. Digital tax automation is poised to eliminate those problems by automating administrative work that comprise up to two-thirds of the time spent on tax prep. This will fundamentally change the tax profession by reducing both stress and hours worked while also increasing firm profitability and job satisfaction.

Liscio’s tax automation features address two of the biggest client-facing problems for tax firms: gathering information from clients and delivering tax returns. Liscio streamlines the tax gathering process by creating personalized tax organizers that clients can complete from any device. Liscio streamlines the tax delivery process by automatically preparing customized tax return walkthroughs that include gathering client signatures for forms 8879. Liscio also automates the reminder process so clients stay on deadline. These features combine to significantly reduce the administrative burden during the busiest time of the year, enabling firms to stay focused on value-added work.

What is Digital Tax Automation?

Digital tax automation replaces manual work such as printing and mailing paper tax organizers and returns. Instead, organizers and tax return summaries can be prepared and sent digitally, regardless of which tax software the firm uses. In addition, software can automatically tailor the experience for each client, thereby improving client satisfaction and response rates. 

Using a Digital Tax Organizer:

Step-by-Step Guide for Firms

1. Print PDF organizers for each client from your tax software. 
2. Upload the organizers to Liscio. Liscio will read each organizer and create a tailored digital organizer based on each client’s prior-year data.
3. Review and send the organizers one at a time or in bulk.
4. Track client progress via the built-in progress bar.  
5. Preview client answers in real time. 
6. Add responses that clients provide outside of Liscio so that the organizer is always up to date, regardless of how the client responds. 
7. Liscio’s automatic reminders to keep clients on deadline.

Step-by-Step Guide for Clients

1. Answer organizer questions on any device (phone, tablet, computer).
2. Securely upload documents using the mobile scanner or standard file upload.
3. Automatically skip questions that are not relevant. 
4. For clients that prefer the traditional paper tax organizer, Liscio includes it alongside the digital tax organizer. Clients can print and view it. 

Paper Organizers vs. Digital: Pros and Cons:

Paper-based organizers

• Time consuming to print and mail.
• Expensive. Costs include paper, toner, envelopes, postage, return envelopes, return postage, and labor. Paper organizers typically exceed $12 to prepare and send. 
• Low response rates, especially with younger clients.
• Impossible to tell whether or not a client is working on the organizer.

Digital Organizers

• Easy to generate personalized organizers using data from the tax software. 
• Clients can complete their organizer from anywhere, from any device. 
• Faster to complete as irrelevant questions can be automatically hidden.
• Less than half the cost of paper organizers (as low at $5 each)
• Firms can monitor progress in real time.
• Firms can update the organizer, ensuring all client responses are in one place.
• Liscio automatically reminds clients until the organizer is complete. 
• Client files are presented in the order requested in a single ZIP file.

Sending Tax Returns Digitally

Step-by-Step Guide for Firms:

1. Print client copy of the tax return to PDF from your tax software. 
2. Upload tax return to Liscio. 
3. Liscio reads the return and creates a personalized walkthrough for each client. The walkthrough includes a summary of the Federal and State amounts due/refunds, electronic signature pages, payment links, and estimated tax payments by quarter, as applicable. 
4. Reviews and send the return. 

Step-by-Step Guide for Clients:

1. Client logs in and reviews the federal and state returns
2. Client signs forms 8879 electronically
3. Client pays taxes using the links and/or addresses provided
4. Client reviews any estimated taxes due

Paper Tax Returns vs. Digital: Pros and Cons:

Paper-based tax returns

• Time consuming to print and mail.
• Expensive. Costs include paper, toner, envelopes, postage, return envelopes, return postage, and labor. Firms typically have to flag pages in the return for clients to follow. Per-return administrative costs typically exceed $10 each. 
• It takes days to get the signatures back. 
• Requires human follow-up. 

Digital Tax Returns

• Send in minutes. 
• Clients receive a personalized walkthrough of their return.
• Clients can sign electronically.
• Paper-based signature option (print, sign, scan using Liscio mobile scanner). 
• Clients receive links directly to Federal and State websites for any amounts owed. 
• Clients receive summaries of estimated tax payments due each quarter. 
• The return is stored securely in the portal for future reference -- eliminating the need to resend returns to clients. 
• Firms can monitor progress in real time.
• Liscio automatically reminds the client until the return is reviewed and signed. 

Offer a Next-Gen Client Experience Without Leaving Anyone Behind

Paper doesn’t cut it anymore. With 93% of Americans online, response rates to paper are significantly lower than engaging online experiences. For example, online banking has largely replaced paper-based and in-branch experiences for most Americans. Accounting firms need to adapt to changing client preferences or risk losing out.

Offering a great mobile experience is critical to a successful online strategy. More than twice as many people report using their phone as their primary online device. Furthermore, most retirees use tablets instead of PCs. To meet the needs of everyone, firms need a solution that covers every device and incorporates all the tools that clients expect to have. These include easy login (biometric and login with Google and Microsoft credentials), a mobile phone scanner, mobile apps, mobile web, and the ability to do find everything they need in a single app. 

By offering clients what they expect, firms can better connect with clients -- increasing response rates and client satisfaction. Firms and clients also stand to benefit from superior document security and organization. 

The Impact on Firm Success

Significant Administrative Time Savings

• Less time wasted printing, mailing, and managing paper. 
• Less time wasted chasing clients.
• Firms and clients can collaborate on the organizer. 
• Preparers know exactly where each client is in the tax organizer and tax-return-review process.

Increased Firm Profitability

• Eliminates the need to hire seasonal staff. 
• Fewer overtime hours worked.
• Less time spent chasing clients and more time spent on value-added work. 

Increased Client Satisfaction

• Clients receive a personalized experience for both organizers and tax return walkthroughs
• Clients can work from anywhere and any device. 

Conclusion

Digital tax automation is the next big leap forward for accounting firms. By eliminating the majority of the administrative work, firms will eliminate admin-related overtime and the need to find and manage seasonal staff. This will return the focus of the profession to value added services that build raving fans and drive both employee and client satisfaction.