Taxpayer collaboration platforms replace the paper organizer and generic online portals, which were limited predecessors that no longer work in a modern environment.
Taxpayers are essential collaborators in the 1040 preparation process. Tax professionals rely on clients’ timely delivery of documents, questionnaire responses, clarifying communications, e-signatures, document reviews, and invoice payments. Clients, in turn, expect their part in the process to be easy and convenient, want responsive service, and don’t want to juggle multiple channels.
Taxpayer collaboration platforms satisfy the needs of both taxpayers and tax professionals by centralizing all collaborative activities in one digital space.
Features you should expect from taxpayer collaboration platforms
If you are in the market for a taxpayer collaboration platform, prepare to compare. Different vendors offer different features on their respective platforms. Here are some features you should expect a 1040 taxpayer collaboration platform to include:
- A convenient way for clients to deliver their tax documents electronically
- Personalized at-scale distribution of documents; (e.g., engagement letters)
- E-signatures, including IRS-compliant KBA e-signatures for Form 8879
- Secure messaging for direct communications between clients and tax professionals
- Customizable, electronic questionnaires
- Invoicing and payment options
- An option to pay state and federal taxes from within the platform
- A user-friendly interface that can be branded with your firm’s identity
- Integration with 1040 tax automation solutions, so client documents flow directly to scan-and-populate processing
- Integration with your tax software
Versus paper organizers
Before the digital revolution, firms mailed paper organizers to their clients at the beginning of tax season. These intimidating stacks of paper induced frustration and overwhelmed taxpayers, who frequently procrastinated and returned organizers last minute or incomplete—if at all.
Firms not only wasted money on paper, envelopes, and postage, but on the hours of administrative effort involved in processing the mail and scanning the paper documents. The paper organizer isn’t sustainable in the digital age, and it’s not environmentally sustainable either.
Versus generic portals
As the internet became the standard of business everywhere, some firms began to offer “online portals” for document submission. While portals were a notable improvement on the paper organizer back in the early 2000s, technology shifts have since made them obsolete. Most online portals required taxpayers to use home equipment to print, sign, and scan documents manually.
As society became increasingly paperless, ownership of home scanners and printers declined precipitously. In addition, online portals were generally limited to the exchange of documents and didn’t provide full-spectrum collaboration tools like messaging, e-signatures, or invoicing. Some online portals persist with slightly expanded functionality, but don’t provide the modern experience of a taxpayer collaboration platform.
Making the switch
If your firm is still using a paper organizer or an online portal, it’s time to evaluate the switch to a taxpayer collaboration platform. Here are some key elements to keep in mind:
- The client experience. How convenient is the platform for your clients? Is it available on any device, including as a native mobile app? Is the user interface simple and easy to navigate? Can document retrieval be automated? Do clients own their own accounts?
- Completeness. Can everything you need from your clients be addressed through the platform? If e-signatures, document gathering, and invoicing happen in three different places, you are creating more inconvenience, not less.
- Security. What encryption and transmission standards does the platform adhere to? Clients will be sending sensitive information through this channel; trust is imperative.
- Integration. Does the platform integrate with your tax software, your scan-and-populate solution, and your document management system? If you need to manually download documents to ferry them from one step to the next, there’s a missing link in your 1040 tax automation chain.
- Offline client options. Some clients have never made an email account and never will. Does the platform offer a way to manage these clients so that your process can stay in one place?
- Support. Does the platform vendor have a full-time support department for end users, or do you need to train your own staff to become support agents?