The 1040 review process that increases firm profitability and client value
Implementing OCR technology, firms have realized the tax return preparation process can be fully automated, but the real problem still lies with the review process. It is time-consuming, creating a bottleneck at the review stage, and it requires the firm’s highest earners to painstakingly review each entry. If time allows, the reviewers will also provide review notes to help train lower-level preparers or, optimally, spend time with them in person to explain changes that need to be made. With tax returns now considered a commodity, how can a firm cost-effectively find the time to perform issue reviews to uncover tax-saving advisory opportunities?
Content review or issue review…or both?
In this Accounting Today article, entitled Art of Accounting: Content vs. issue tax return review disagreement, Ed Mendlowitz, CPA, a partner at WithumSmith+Brown, PC, CPAs, asks, “is it better to limit mistakes utilizing a tick and tie content review or provide the client advisory value with an issue review?”
He says, “My contention is that it is difficult for a reviewer to do both.” Ed, TaxExact has engineered a way for firms to do both reviews, train staff on the tax code, and increase a firm’s profit potential, all with an exciting new tax tool and a simple process shift!
TaxExact delivers patent-pending workflow and 1040 review tools that increase profitability for tax professionals and value for their clients. With TaxExact, a preparer quickly creates a TaxExact project, which is a very truncated independent expectation for the tax return. It allows for the fastest and most accurate way to identify errors and avoid tax notices by comparing the summary results in TaxExact to the summary generated in your existing tax preparation software.
Here is an example of a TaxExact process flow:
| Steps | Role | Task | Value Proposition |
| 1 | Owner/ Partner/Principal Advisor | Meets with new clients to receive and review their tax documents and situation. | Advisory opportunity |
| (For returning clients, an admin can receive the client’s source documents.) | |||
| 2 | Admin | Scans source documents.
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| 3 | Interns/OCR technology | Enters data into your tax software.
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| 4 | Accountant/Tax Preparer | Prepares a simple truncated independent version of the tax return in TaxExact.
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| 5 | Accountant/Tax Preparer | Compares the TaxExact summary with the tax software summary, fixing any discrepancies until both summaries match.
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Self-guided training opportunity |
| 6 | Accountant/Tax Preparer | Leaves advisory opportunity notes within TaxExact.
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Future advisor training; Increased firm ROI.
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| 7 | Admin | Prints and prepares the return for delivery.
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| 8 | Admin | Emails the client to let them know their return is complete and sends a calendar link to schedule a pickup appointment with the Owner/Partner/Principal Advisor. | |
| 9 | Owner/ Partner/Principal Advisor | Completes a quick 15-minute advisory note review in TaxExact prior to the client meeting and provides a value-added tax advisor delivery. | Advisory opportunity;
Client Value. |
Our tax review process lets reviewers have their cake and eat it too.
Now, your firm can provide both content and issue reviews for accurate tax returns and relationship-building advisor value! TaxExact shifts the verification of accuracy to the preparer while improving your firm’s tax season profitability and performance.
Grab a cup of joe, a piece of your favorite cake, and we will see you in the break room. Firms of all sizes are welcome to join us. Learn how to implement TaxExact into your 1040 workflow process and turn your preparers into reviewers by scheduling a demo today!
