Reasons for Process Bottleneck:
•"People are people and I always have missing items."
•"Clients don’t realize the importance of the needed info."
•"I cannot control information received from third parties (such brokerage houses and partnerships)."

Potential Resolutions to the Issue:
•"Request information sooner from the client."
•"Enforce deadlines with clients."
•"Send out a reminder letter."
•"Hire a full-time person for tax season to call clients with forms outstanding for more than two weeks."
•"Get more electronic information from clients!"

There are a few important trends identified in participant answers. First, tax professionals clearly realize that getting the information is an issue, whether it’s from the client or a third party. The theme appears to be that document collection is something that the firm cannot control. This way of thinking is dangerous because it puts control of the process solely in the clients' hands when it’s the firm that should be calling the shots.

Second, the majority of answers has one element in common—increased cost—as the solution. Requesting information sooner, enforcing deadlines and sending out reminders all require additional follow-up action, and that means more time and more money, as does hiring a full-time seasonal staff member.

Among the slew of responses received pertaining to resolutions, several indicated that there are professionals who are on the right path to solving the issue: "Get more electronic information from clients!"

Part of the Solution
Everyone has heard the buzz around portals over the last several years. And it’s about time. Portals provide clients with real-time access to documents and solve the issue of having to deliver paper files. More and more documents are being provided digitally format, including tax returns; financial bank, and brokerage statements; loan agreements and engagement letters.

Portals can move documents conveniently between the firm and clients. With data security an ongoing concern in the profession, portals are much more secure than email.

Portals also provide version control. Only the most current version of any document is available within a client’s portal. Attaching documents within email is far less reliable in assuring document integrity and version control, as several versions may end up in the recipient’s Inbox and may be stored in multiple locations.

Finally, and perhaps most importantly, portals represent the level of service that today’s clients expect. Think about it. Would anyone use a bank that didn’t offer online services?

Portals are fast becoming a necessity. Twenty-one percent of the tax survey respondents said that they use portals. However, while portals facilitate document exchange and delivery, the technology does not solve the issue of client procrastination. Nor do portals alone help with tracking and gathering critical forms such as 1099s, corrected 1099s, W-2s, K-1s and mortgage statements.

Security is still at the top of everyone’s mind; especially as state and federal laws continue to get stricter regarding the security of clients’ personal information. In fact, a few states, including Massachusetts and Nevada, now require practitioners
to encrypt emails that contain client data classified as “personally identifiable." Several other states have similar legislation pending.

Portals alleviate the concern because they generally offer advanced encryption (128-bit SSL) of data. Leading vendors also ensure almost 100-percent network uptime and perform scheduled redundant data backup.

Automatic Document Retrieval
In simplest terms, auto retrieval technology provides a secure web interface (portal) where clients can connect with financial institutions and brokerage houses to set up automatic retrieval of source documents.

Tax preparers simply direct clients to a password-protected, individually customized interface where they enter login credentials to access online accounts. As it becomes available, this technology retrieves 1099s, consolidated brokerage statements and other forms and delivers them directly to the firm.

Automating document retrieval is not a new concept. Some vendors have supported this process for years, just not for the tax and accounting profession. However, the technology is now available to tax practitioners, making and it places control of the tax preparation processing the hands of the tax professional—where it belongs.

Consider the value auto retrieval technology offers:
• Experience significant time savings—you receive tax source documents months earlier in the tax season...
without nagging your clients with multiple reminders.
• Enjoy cost savings—eliminate manual faxing and mailing, as well as the cost of postage.
• Provide clients with a far more secure vehicle for document delivery than email—portals!
• Save clients from the hassle of manual document delivery.

How Auto Retrieval Works—Step by Step
One of the biggest value propositions auto retrieval technology offers is simplicity. From initial setup to document processing, little time investment is required by firm staff or the client.

Step 1: Accountants manage clients and the return submission process within the system’s dashboard.
Step 2: Accountants provide clients with access to individual portals to set up automation of documents with financial institutions (portal accessed via the firm’s website for ultimate convenience for clients).
Step 3: Through a secure portal, the sets up automatic document retrieval for financial institution.
Step 4: Client documents are automatically retrieved as they become available and flow back to the tax professional’s dashboard for immediate processing. Those same documents are also then available to your client.

And that’s it. With today’s advanced technology, the process is simple. And the outcome is a completely paperless tax preparation process that allows practitioners—not clients—to drive the process. This translates into significant increases in efficiency and the ability to standardize and digitize the entire tax prep process.

It’s important to note that through automatic retrieval technology tax professionals NEVER have exposure or access to the client’s login credentials. The system provides limited retrieval of documents only. Also, practitioners CANNOT manipulate account details or move account funds.

The Technology Is Here
Auto-retrieval technology takes the paperless tax preparation process to the next level. It also enhances the lure of portals— offering more than simple document exchange functionality. The popularity of this technology is expected to grow over the next few years.

In fact, according to the 2010 tax survey, nearly 80 percent of respondents said it would be "somewhat to very valuable" to their firm. The most common estimate of the number of clients who would take advantage of auto retrieval was 25 percent to 30 percent. These statistics are exciting, as they indicate a high level of engagement and interest from tax practitioners right out of the gate.

At the end of the day, the biggest benefit is realized by eliminating a key pain point for tax professionals—client procrastination. Firms no longer need to wait for clients to deliver source documents, which bottlenecks the entire process. Auto retrieval technology even handles corrected forms, notifying clients when they are available. It also puts required source documents in the hands of preparers months earlier in the season, allowing firms to keep tax return preparation on track and ultimately promising a much smoother busy season.

What tax professional wouldn’t appreciate getting client documents four to six weeks earlier … and getting them electronically? That’s what today’s auto-retrieval technology can do for firms. Pain point eradicated!