The tax preparation process involves data collection, manual data entry, precise calculations, and collaborating with clients. It’s no surprise that accountants depend heavily on tax software to help them stay organized, reduce errors, and work more efficiently.
If you’re an accountant looking to streamline your tax preparation process, this post will introduce you to examples of tax preparation tools you can rely on to work smarter, not harder.
By incorporating these tools into your accounting tech stack, you can look forward to working more effectively, freeing up time for strategic tasks and delivering exceptional service to your clients.
Let’s explore!
Please note - this post covers tax software for tax professionals. It does not cover free tax software and self-serve tools like H&R Block for individual tax filing.
Common tax preparation challenges
First, let’s talk about what’s slowing you down in the tax process.
1. Does it take ages for clients to respond to your requests and questions?
2. Do you waste time repeating the same steps over and over?
3. Is there too much room for error when you enter data manually?
4. Do you worry if you’re complying with the most up-to-date tax laws?
If you’ve answered yes to any of these points, there’s an opportunity to do things better with online tax software.
Types of tax preparation tools for tax professionals
Tax preparation tools can take the form of tax software suites, document management systems and data collection tools.
Let’s explore how all of these differ with some examples of popular tools.
1. Dedicated tax software
First, you’ve got dedicated online tax filing software solutions that typically offer a comprehensive mix of features to help tax professionals through every step of the tax process.
Our recommendation: TaxDome
TaxDome is among some of the best tax software out there. It lets you set up secure client portals where users can upload documents, exchange messages, and collaborate on the tax filing process in real-time. The platform prioritizes security and compliance with several built-in features that ensure adherence to tax regulations.
With automatic reminders and notifications, accountants can stay on top of important dates and ensure timely submissions, reducing the risk of penalties and compliance issues.
The platform offers advanced automation capabilities, such as data import and reconciliation, which help you process large volumes of data quickly and accurately.
Since accuracy is crucial in tax preparation, TaxDome offers several innovative features to help you minimize errors. One strong feature is its error-checking functionality that scans for inconsistencies and alerts users to potential issues before finalizing tax returns, enabling them to make necessary corrections promptly.
2. Document management systems
Document management systems help you store, organize, and protect electronic documents like text files, spreadsheets, PDFs, and scanned images. They’re designed to help you:
- Save time on document creation, instead of setting them up from scratch
- Collaborate with clients on documents, rather than over emails
- Sign documents electronicallyÂ
- Protect documents from unauthorized accessÂ
Our recommendation: FYI
FYI is one example of a document management system tax professionals can use for tax prep as well as various other accounting processes. Here are some ways it helps in the tax filing process:
FYI Docs saves time on the creation of documents by giving you document templates you can start with like tax planning letters, notice of assessments, and other standard tax documents. When you create your documents, you can also customize them to match the branding of your accounting practice.
The platform helps you organize your documents by creating dedicated workspaces for every client, which you can invite other team members to for collaboration. To help protect sensitive client data, you can choose to grant access only to relevant team members.
These dedicated workspaces also simplify the process of getting information from clients, since clients can easily drag and drop documents into the portal for easy sharing.
Given that the platform is intended for managing sensitive client information, FYI Docs comes loaded with security and compliance features to ensure that data is protected to the highest possible standards.
3. Data collection tools
Data collection tools are tools that help you gather information and documents from clients before you get started on preparing their taxes. These tools help you overcome the challenges you might face if you were to rely on email to collaborate with your clients, like:
- Emailing clients back and forth to get the data you needÂ
- Having trouble locating information in different email threats
- Not being able to receive large file sizes
- Experiencing delays in client replies in general
Our recommendation: Content Snare
Content Snare is a data collection tool leading accounting firms use for the tax preparation process. The way it works is really simple — it lets you create questionnaires (or requests) you can send to your clients to complete.
Because the tool caters to tax professionals, it comes loaded with accounting templates like a tax preparation intake form you can run with so you don’t have to build your questionnaire from scratch.
Content Snare has a handy approve/reject/comment feature to help you respond to information as you receive it. For example, if the client uploads the wrong document or provides incomplete address information, you can flag it right away in the tool, notifying your client to re-submit the correct information. This can make a huge difference in helping you avoid errors and address issues in the tax preparation process early on.
One of the tool’s strongest features is its reminder schedule that nudges your clients to complete your request on time. Once you send out your questionnaire, all you have to do is set a deadline and the tool will do the rest. This feature alone can help you overcome client-caused delays that slow your workflow.
Last but not least, the tool comes with plenty of security features for compliance and integrates with popular tools like Google Drive, Dropbox, Xero Practice Manager and FYI Docs to make your life easy.
Keep exploring what tax tools can do for you!
Intuitive tax preparation tools play a crucial role in streamlining workflows, improving accuracy, ensuring compliance with tax regulations, and ultimately delivering a better experience for the client.
As you look to grow your practice and remain competitive, it’s imperative to keep exploring and integrating tools like the ones we mentioned in this post to your accounting tech stack to experience greater efficiencies.Â