Why Tax Practitioners (TP’s) Need A Solid Back Office Tax System
By: Mark Silberman B.Acc. C.A.(SA) , Accfin Software (Pty) Ltd
In the time before SARS automation, it used to be that in a tax practice one could accurately calculate on average how many hours spent on tax clients for the year to calculate costs and fees. In those years – say 2 hours per taxpayer per year. From this one could work out the staff compliment required, make the necessary arrangements and calculate what the fees should be. In today’s times take the measurement, maybe its 5 hours or more per taxpayer, resulting in much higher costs. Measure every year and see how much it goes up each year, and see how many more labour charges and resources are being used. Why does it go up, it’s because tax has become much more complicated with thousands of new pages of legislation and pressure from SARS to get things right?
Its true much is now automated with SARS e-filing, but the sheer labour in producing the end result of tax returns before filing on a risk aversion basis for TP’s has increased dramatically. Tax is complex and is beyond taxpayers doing their own tax returns! There are so many hidden pitfalls that even entrepreneurs doing their own tax returns will fail, hence the need for good TP’s who must be suitably skilled with the right educational qualifications.
I remember many years ago going to the launch of e-Filing when the then finance minister Trevor Manual told the audience that they were going to make tax easy for everyone to be able to do their own tax return.
Tax Practitioners right now are in the height of the tax return production season trying to meet tax return deadlines for non-provisional taxpayers by the end of November, despite the fact that the season was cut short by 2 months by the Corona Virus. TP’s got a bit of a curveball with the SARS auto assessment as this put pressure on all TP’s as they were not aware which of their clients got an auto assessment and many clients called in asking the TP’s to accept the auto assessment as there were credits due according to the auto assessment.
Accfin Sky Tax gave our TP clients a software facility to tell which of their clients had received an auto assessment by a simple mouse click on their Sky Tax System. Now of course with all the issues in regard to provisional tax and Covid-19 relief calculations we also allow TP’s doing the Covid-19 relief calculation an opportunity to check the Provisional Tax statement of account as well as obtaining provisional tax receipts automatically into the Sky Tax system to see if the relief has been granted.
One of our most important design philosophies we adopt is to provide the fastest tax production system in RSA as well as the most accurate. I am pretty sure that one of our clients holds the world-record in tax return filing in that he filed 90 returns in two days all by himself generating huge revenue.
So what does a TP look for in a back office tax system? The first and foremost is stability and then the ability of the vendor to meet the changing legislative requirements quickly and on time. We have of course noted that competitors are struggling to keep up.
We have also introduced a whole lot of risk aversion procedures:
- We have built in Artificial Intelligence to ensure that when comparing the figures of a return to the previous year that nothing has been left out. E.g. we compare the main components of, income, investment income, various expenses to the previous year and the system tells you what’s missing.
- An ability to move the tax return electronically around the TP’s office for checking and review.
- Automatic email to the client with digital signatures – once the client signs the electronic tax return, it automatically flows back into the Sky Tax System.
- A pre-assessment to ensure that the Sky Tax calculation agrees with SARS before its filed.
- Automatic receipt of assessments and notices.
There are many more features that help reduce labour in building tax returns saving huge amounts of time. I estimate a TP will save as much as 40 minutes per taxpayer per year using our methodology, which with volume can save a huge amount of labour.