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  • Writer's pictureAndrew Blyth

Empowering Advisors to Provide Effective Tax Advice with Technology

Despite 'Back to the Future 2’ predicting self-tying shoes, hoverboards, and flying cars all by the year 2015, the use of technology for accountancy and finance professionals has been on the rise over the last decade; especially after a global pandemic and the UK officially leaving the EU in 2020.

And a key driver for this mass adoption is the fact that technology and/or digital tools save time. I mean, who wouldn't welcome a solution with open arms that saves them time??

This new technology has brought on a sense of empowerment to the modern-day professional; through more autonomy, ownership, and flexibility to their work. And the same can be said for the modern-day advisor, like you.

In recent months, the use of AI and potentially replacing humans in certain industries has become a hot topic, especially since the launch of Chat GPT.

It has got us all thinking about the use of tech in business and how we can harness it for the benefit of our clients without losing the personal touch.

It’s through this blog post that we will answer the two below questions:

  1. How can an advisor use technology effectively?

  2. How can an advisor use technology to provide effective tax consultancy and advice?

Let’s get into question one.

Benefits of technology

For accountants and advisors, there are numerous benefits to utilising technology. A few well-known benefits are that it increases visibility on the day-to-day activities, enables automation for high time, low value tasks, helps to streamline overall workload and contributes to the decision-making process.

Yes. Technology helps to make decisions, but it isn’t the be-all and end-all for advisors. And it is widely accepted that technology helps to optimise business efficiency.

I know what you’re thinking, ensuring optimum efficiency is a goal for us all. The more efficient we become the more cost-effective and lean our processes become.

The truth is, becoming too efficient comes with its drawbacks. We’ve all heard of diseconomies of scale. And the same goes for efficiency. Here's the thing...

Balance is key

The balance between utilising technology as a supporting tool, alongside human expertise.

Tech helps to provide data. And as an advisor, it’s not just about data, it’s about knowing your clients.

As the advisor you know your client best. You know what their goals are, what their roadmap is, where they see themselves in ten years’ time. This all means that you are able to harness digital tools to help make decisions, but making the right decisions for your clients comes down to your knowledge and understanding of their end goals.

When it all comes down to it, your clients are paying you for a service. They expect results. Results that will help them to achieve their goals.

And it’s this delivery aspect of collaborating with your clients in which you fully understand what it is that you can do to help your clients achieve their goals, which will not only help you to retain existing clients but also stand out from the competition.

Also, we must consider the data which the tech utilises. What data is it pulling through, from what source, and how up-to-date is that data? Data is only powerful if it is useful, real-time, and relevant. If it is using last year’s accounts and tax returns or historic management accounts, what use is it in helping support the client achieve their current and future goals?

Every business uses technology, but it’s how we use technology to the benefit of our clients that is most important.

Our balance

This brings me to question 2, how can an advisor use technology to provide effective tax consultancy and advice?

Tax consultancy and advice is traditionally delivered via a series of meetings with the client, a review of financial information followed up by a long tax report with recommendations.

It is a human-intensive process, requiring a combination of soft skills such as listening and good communication combined with technical expertise. The advisor not only needs to know the tax technicals but apply it to the client scenario and decide on the best course of action for that very client. The advisor would likely hone this skill over many years.

That's exactly why the cost of tax consultancy and advice is expensive and typically why a lot of SMEs and their business owners don’t get the tax advice they need and absolutely deserve.

Tech is changing the way that most industries operate, and tax is certainly one of them.

Tech can help advisors record, gather and analyse financial data to aid the tax consultancy process. Data is king and can provide real-time information which can be used to help make decisions.

However, tech cannot replicate the client know-how and soft skills which the advisor possesses.

The tech can identify tax opportunities based on financials and data inputted by you, but it:

  • Doesn’t know your client – what are their goals, plans etc.

  • Cannot decide what tax opportunities are the best for your client based on their goals and plans

  • Cannot communicate the tax opportunities to your client

  • Cannot deliver the tax advice needed

We’ve been on the block since January 2016, well before going digital (nevermind AI) was even a trending topic. Whilst most accountants were using the old desktop Sage, we started working with the early adopters who were utilising digital tools to support their clients such as Xero, QuickBooks, GoProposal and cashflow management apps. Time truly flies when you are having fun!

Since day 1, our mission has been to empower advisors to provide valuable tax advice to all that need it. By digitalising the A-Z of tax advice and consultancy, to support advisors to attract, diagnose, and deliver a sustainable tax advice service.

The Diagnostax Portal allows advisors to combine tech and client know-how to identify tax opportunities via a defined tax consultancy process. Advisors have the tools to be able to diagnose the tax opportunities available to their clients via a digitalised process without losing the human consultancy approach. The advisor is then able to prioritise the tax opportunities based on client know-how and potential tax savings.

Via our tax advice services, we are an extension of your team to help you deliver the tax advice your clients need. You don’t need to worry about not having the time, resource or expertise to deliver the tax advice in-house!

Combining the use of tech to identify those tax opportunities and the advisor’s skills, provides a holistic approach and highly valuable service to your clients. Not to mention, a service you can charge for year on year.

Client Success Means Business Success

Now, I am not dismissing that digital tools or technology can indeed help advisors to do their job.

But it’s knowing your clients that is vital. By maintaining a balance between technology and that much-needed human element, advisors can ensure maximum business efficiency without losing the main focus of their business: Client Success.

As within the accountancy and finance industry, client success means business success.

So how is it that an advisor (that’s right, you) would go about delivering this level of service to their clients?

Well, over the next month we will produce blog posts providing the answers to the above question, so keep your eyes peeled for updates across our channels!

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