Technology advances in accounting helping to eliminate the ‘headache’ of tax time for businesses
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Tax season can elevate the stress levels of many business owners. If they haven’t kept their books up to date throughout the year, they may find themselves scrambling to ensure they are ready when the tax bill comes due.
In addition to the administrative burden and the discomfort of uncertainty, the failure to have a full picture of tax obligations well before the deadline can have an impact on a company’s cash flow.
“For a lot of business owners, there is nothing they dread more than getting all of their records together at tax time,” says Shayne Dueck, vice president, client accounting and bookkeeping services for MNP, one of Canada’s leading professional services firms, providing accounting, consulting, tax and digital services.
“Pulling everything together with a deadline looming is stressful and time-consuming, and it takes the focus away from the vital work of running the business. And when the true picture is revealed, they may be in for a surprise – the reality of a tax bill they didn’t plan for.”
Businesses have long recognized how valuable it would be have access to bookkeeping and accounting systems that are seamless and worry-free – not only at tax time but year-round. Now, thanks to technological innovation, fulfillment of this aspiration is possible.
MNP is meeting this demand from the business world with its bookkeeping solution called ease.
By using automation (and a range of apps), MNP’s cloud-based, all-in-one accounting and bookkeeping solution helps companies manage finances faster, organize their data and gain immediate access to the information they need from the cloud, from wherever they are.
The timely updating of accounts, management of invoices and access to payroll and business modelling yield benefits at all times of the year, says Mr. Dueck, while particularly easing business “pain points,” come tax season.
A surprise tax bill at the last minute can throw a business off track and lead to unnecessary expenses, he says.
“Perhaps you discover you don’t have the funds to pay your owed taxes, so you end up paying late and accruing interest and penalties,” says Mr. Dueck. “That’s an unproductive expenditure that could have been prevented if you had known where you stood well in advance.”
“Calculating and paying taxes can become more of a matter-of-fact process, instead of a surprise that distracts from key priorities. Instead, our professional advisors can work with businesses to focus on the future of the company as opposed to the past. And that future orientation yields real value for business owners. ”
Empowering long-term tax strategies
Staying up to date on accounting and having clean data throughout the year allows businesses to save time during tax planning, while also empowering them to develop tax strategies well ahead of their year end.
“With a digital automated system like ours, our business clients, with the guidance of our expert advisors, can set up a longer-term tax strategy,” Mr. Dueck explains.
“Timely financials and a service that adjusts to your unique tax situation helps you set a tax strategy in place and monitor it through the course of the year. That helps you get rid of your tax season headache.”
This type of advance planning, plus the ability to accurately forecast cash that will be available at tax time, helps ensure businesses can take advantage of eligible tax breaks and maximize deductions.
Mr. Dueck describes the kind of decision-making that can be augmented by a comprehensive financial picture before year end.
“Can I take advantage of something from a tax perspective by doing it early? For example, if I have the cash and buy this equipment now, can I get the deduction to reduce my tax bill due in a few months, as opposed to buying it after my year end and having to wait over a year to realize that deduction?”
The automated nature of the system also reduces the risks that come from keying errors and other mistakes that could go undetected and prove difficult to resolve when later discovered. In addition, the solution can automate indirect tax payments to the provincial and federal governments, giving owners the peace of mind of having goods and services or harmonized sales taxes covered.
No more tax season panic
In effect, says Mr. Dueck, a digital automated system makes tax time “rather boring” and a time of looking ahead instead of behind.
“We’ve gotten through tax time at an earlier point in their year, and now we can focus the conversation to planning where the business can go next year.
“Calculating and paying taxes can become more of a matter-of-fact process, instead of a surprise that distracts from key priorities. Instead, our professional advisors can work with businesses to focus on the future of the company as opposed to the past. And that future orientation yields real value for business owners.”
More innovation ahead
Technology has been transforming accounting services for several years and in several ways. With the more routine tasks handled by technological solutions, businesses are empowered to invest more energy into their business. At the same time, accounting professionals are evolving to provide more strategic insights and taking on more of a high-value advisory role to help guide business decision-making.
This higher-value function for accountants is what the market is demanding, Mr. Dueck says, with more businesses seeking this type of advice.
“When you look at the future, technology is allowing us to expand the scope of services that we offer, but also doing it in a way that makes it cost-effective for businesses. We are able to bring businesses something that has a concrete benefit for them versus simply helping them be compliant with government regulations or filing requirements that they need to meet.”
MNP is investing in expanding its strategic services to serve businesses, a trend that is being seen across the accounting industry.
This evolution of the accounting professional’s role is a positive trend, Mr. Dueck says. “Elevating the profession enhances the reward of the career, and that allows the profession to retain and attract more talent. By automating the routine work, we have the opportunity to train more professionals to do the advisory work that adds more value for the clients.”
Additionally, as is the case for so many sectors, accounting is starting to be affected by the introduction of more advanced forms of artificial intelligence.
“Artificial intelligence (AI) is the next big transformative technology that’s coming down the pipe,” Mr. Dueck says. “We’re talking about using AI to execute more advanced functions, such as analysis of transactional data to show the client a more detailed story of what’s happening in the business.”
Another possible application is to use AI to analyze and summarize a large volume of industry data or to answer complex questions. It will be another pathway to giving accounting professionals a time-saving tool and the ability to deliver value more efficiently.
“This would mean that if somebody has a question for me on what’s happening in a specific industry, I don’t have to read and filter through scores of reports,” he says. “I could give the AI some parameters and say I need to answer this question about this industry, in this timeframe, and the result will be a report based on reputable sources.
“The less time we have to spend on research, the more time we have to spend on delivering solutions of high value to our clients.”
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