Tax Automation and User Experience – BOSS Magazine

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In the last decade, a wave of technology, specifically artificial intelligence (AI), machine learning and automation, has swept over every possible industry. Wealth management and tax are no exception. Gone are the days when advisors and accountants are expected to pore over heaps of data and manually mine through it all.

The introduction of automation tax software has made it easier for financial practitioners to leave repetitive processes to technology and shift their focus to skill-based managerial and administrative roles. The rise of robo-advisors means big things for the industry and is changing the face of tax as we know it. In a few years, its safe to assume that many financial companies will invest in tax automation software to some capacity, so lets explore what this brings to the table:

Tax filing is complex and notoriously time-consuming. And with constantly changing regulations, even the best advisors can find it hard to keep an accurate account with minimal errors or anomalies. This problem of labor-intensive, repetition has plagued the industry for years, and with the development of innovative robotic automation software, the scope for automating everything from data collection to filing returns is immense.

Perhaps the biggest and most impactful benefit of automation software is the accuracy it brings to processes. For accurate reports, calculations and data management, data has to be accurately collected at its source. Manual collection of data is always prey to human error and is one of the biggest banes to tax professionals. An article by Accountancy Age aptly explains how automation can change this.

Automated tools can collect data from multiple systems, store the information in a common format and then scan and check the data for inconsistencies and mistakes. Then, multiple compliance engines can use this data repository to automatically populate forms, thus removing the need for transposition and reducing the capacity for error and financial risk. This is especially useful for business tax filing because accurate data collection ensures accurate tax calculations.

Implementing tax automation software is a huge investment. While statistics from Deloitte show that automation software can save companies anywhere between 15% to 90% of their current advisory costs; a 2017 report from PricewaterhouseCoopers (PWC) states that using robotic process automation (RPA) costs less than 50% of the cost of offshore processing. Additionally, RPA offers up to 80% total cost reduction and results in virtually no money being spent on customizing existing or new systems. Finally, there is also a case for saving in terms of future costs by mitigating errors and therefore saving on the expense of fixing them.

When it comes to certain expenses like healthcare or housing and real estate, the data is large and the documents are many. Automated software can avoid backlog by retrieving data from third parties and uploading it straight into repositories, saving both clients and accountants a significant amount of time. For smaller businesses, hiring a managed payroll service that utilizes automation can prove to be beneficial.

The tax industry is infamous for long hours of manual labor, often resulting in high staff turnover for tax teams. In fact, an ACCA survey found that Across the Big Four, only 25% of respondents thought their role provided a good work-life balance, compared with 38% in mid-tier firms and 49% across all sectors. The survey also found that 85% of respondents viewed technology as a way to free up time so as to focus on more value-added opportunities.

Enter tax automation software: It does the prep work and leaves the skill-based work to the professionals, thereby breaking old perceptions of the tax industrys notoriety for long hours and poor work life balance. In turn, this can attract a younger, savvier workforce.

We now know how tax automation software can do wonders for financial advisors but what about their clients? Considering that many individuals dread the approach of tax season, tax automation software can be a boon to business owners. However, this software is only successful if clients can navigate it, understand it and actually enjoy using it. Heres where UX plays a major role:

Its simple: no one wants to use an app they dont like. If it doesnt make their lives easier, they dont stick around and companies that invest in UX for a seamless user experience, reap the benefits. This article by Appnovation puts things in perspective: Tinder, the dating app designed on the same premise as ex-market leaders OkCupid and Match.com, did one thing the latter two didnt. They made the product easier to use. No longer did you have to fill in long forms for your ideal match, you just had to link your social media and voila a 100 new matches!

Another example in the tax world is that of TurboTax. In an article on Forbes, Eunie Kwon, who is the Director of Design at Intuit, states, When we went out and asked thousands of consumers about their tax preparation, most responded with emotions of fear, uncertainty, and doubt. Once we started to unpack their reasons for these feelings, we found opportunities to influence their experience by applying some basic psychological principles and laws of UX heuristics to simplify through mindful design. This approach has led to great success for TurboTax, with clients feeling 100% confident about their tax outcomes through the platform.

The lesson here is simple: if the user experience of the technology doesnt have the customer in mind every step of the way, it reduces its chances of success almost instantly.

If technology has done anything, its allowed brands and firms to tailor the customer experience. Todays mantra is no longer one-size-fits-all. With unprecedented amounts of data being collected, UX can be designed in accordance with customers preferences.

For instance, taking the data you have and applying it to your UX could mean sending certain customers customized notifications for tax filing or timely reminders, or even allowing customers to be constantly in touch with a chatbot as they file their documents so they clear every query they have.

Automation allows tax professionals to finally turn the spotlight onto adding more value to their client relationships through planning, strategy and problem-solving. Technology and convenience is a welcome change in this sector, and while tax automation is certainly the way ahead for financial advisors, its functionality alone wont determine its success. A UX experience that predicts and meets the needs of customers is the key to the triumph of this technology and a strong determinant of its future success.

By: Indiana Lee, BOSS contributor

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Tax Automation and User Experience - BOSS Magazine