David Wyle: The Next Frontier of Tax Workpapers

SurePrep president and CEO says a few leading firms are showing the way

How far along is the profession in adopting “paperless” solutions?

We see paperless as having three main components, the first being storage and retrieval. Most firms have implemented scanners and some type of document management system. In this area, the industry is at least 70% of the way there, probably more.


The second component of paperless is workflow. Most firms are still using paper or spreadsheets to route work through the office. Although in the last few years that’s begun to change, the industry still has a long way to go. I’d estimate that as a whole, the industry is only 20% of the way there.


The third component is electronic workpapers. We think that in terms of ROI, using electronic workpapers is the most important aspect of being paperless. Electronic workpapers allow for greater productivity, efficiency and collaboration. Today, 80% to 90% of firms use a paperless workpaper tool on the financial statement side.


The tax side though, is lagging far behind. We would estimate that only 10% or so of firms are using electronic tax workpapers. Of those firms, most are using generic tools like Adobe Acrobat. To maximize efficiencies and minimize the difficulties of transitioning to a paperless environment, firms should use industry-specific electronic workpapers. Every firm moving to a paperless office should implement workpaper tools that have specific features design to address the needs of accountants. This side of going paperless will get the most attention in the coming years.


What are the next steps most firms need to take in going paperless?

Most firms are doing some scanning, using at least two monitors and some form of document management system. For many firms, the final step in going paperless will be implementing workflow systems that route job specific electronic workpaper containers through the office from start to finish.


How does your solution address accountants’ needs?

Historically, tax returns were prepared by aggregating paper source documents and manually keying the data into tax software. By using our advanced OCR tools, firms can prepare tax returns while minimizing those paper-based, redundant, manual processes. 1040SCAN PRO™ will take documents that were scanned at the front end of the workflow, automatically organize them and read and import data directly to tax software, thereby freeing the accountants’ time and allowing them to provide more value-added work. Our onshore and offshore tax outsourcing solutions for 1040, 1041, 1065, 1120 and 1120S tax returns allow firms to reduce cost, alleviate busy season workload compression and provide better client service.


At the core of our offerings is SurePrep Express™. This electronic workpaper tool designed specifically for tax preparation is helping SurePrep clients maximize their efficiencies by preparing tax returns in a truly paperless environment. When the tax return is complete, our DreamWorkpapers provide an organized, bookmarked and cross-referenced set of electronic documents complete with detailed leadsheets that summarize all numbers in the return. The DreamWorkpapers are perfect for electronic storage for future reference.


What’s next on the paperless horizon?

Although outsourcing and OCR are the tools available today to help firms go paperless and increase efficiency, the future is data aggregation. All data already exists in some electronic format. Imagine clicking a button and having all data automatically populated in your tax software — totally eliminating the need to perform any data entry. Think of the value you could provide your clients if you didn’t have to spend hours typing data into tax software but instead spent your time analyzing the data and using your talents and knowledge to help taxpayers minimize their tax liability and plan for the future.


David Wyle is president and CEO of SurePrep. Visit: sureprep.com


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Get Clients Ready for Tax Season

This comprehensive report looks at the changes to the child tax credit, earned income tax credit, and child and dependent care credit caused by the expiration of provisions in the American Rescue Plan Act; the ability e-file more returns in the Form 1040 series; automobile mileage deductions; the alternative minimum tax; gift tax exemptions; strategies for accelerating or postponing income and deductions; and retirement and estate planning.