Digitization in tax consulting

The increasing digitization of all areas of life and almost all professions has long since reached the field of activity of tax consultants. What opportunities and risks does digitization bring with it in tax consulting?

Tax advice 4.0 - networking with information and communication technology

The term “Tax Advice 4.0” is based on an initiative of the federal government “Industry 4.0” and describes the comprehensive digitization of business processes through the progressive networking of all areas in production and services with modern information and communication technology. The networking began within the law firms and now also includes the financial administrations, the client himself is still served largely conservatively in many law firms. The only exception is the e-mail, which has meanwhile become a matter of course for work and communication between the client and the tax office. However, tax advice 4.0 is much broader and will radically change the work processes within the law firm as well as the entire communication and data transfer between client, law firm and financial authorities.

Is the dream of a paperless law firm finally becoming a reality?

Probably the biggest and most obvious change in the cooperation between tax advisor and client is the abolition of the paper shuttle folders for the provision of all documents and receipts for the monthly accounting, which has already been practiced many times. In digital collaboration, receipts are often already scanned at the client and made available by email or via a cloud application for electronic data processing. The central document management system (DMS) is becoming increasingly important for the law firm and its future as a digital law firm, since with the help of a central DMS all employees have permanent access to all documents. In addition to finding documents faster, the much shorter information paths overall contribute to efficient processes in the digital tax office. If all of the client’s documents are consistently digitized and made available to the consultant in electronic form, this reduces the administrative effort enormously and thus lowers costs in the long term.

Online banking as a pioneer of a fully digitized service

Online banking is a good example of how services can be fully digitized and eliminate the need for the customer to visit a local branch. The same landslide-like changes are also predicted for tax consultants, if you want to be at the forefront tomorrow, you have to prepare for it today and invest in new hardware and software, for example. The central document management system (DMS) is an elementary component of the digital law firm, which not only brings considerable advantages for clients. The use of a DMS also means that employees no longer necessarily have to do their job on the premises of the law firm, but can also do many routine tasks from home. Especially in times when law firms are finding it increasingly difficult to find qualified employees, working from home takes on a whole new meaning. In addition, the possibility of working from home also represents a performance incentive and gives the law firm a real advantage in the competition for the best employees.

The digital law firm is also changing the work of the tax advisor

The automation of routine work is shifting the focus of tax advisors in digital law firms more and more towards support and business advice. The tax consultant’s areas of responsibility will therefore increasingly shift in the direction of evaluation and analysis, and ongoing bookkeeping will hardly be done in the office itself in the future. Tax consultants who understand the opportunities of digital change at an early stage and respond positively can offer further consulting services and retain clients in the long term with new solution concepts. The tax consultant becomes an optimizer who improves the client’s business processes.

Proximity between the tax advisor, client and employee is becoming less important

The increasing digitization and the central document management system weakens the importance of the location and the proximity between the tax consultant and the client, as classic banks with a branch network have long learned. If you work completely digitally and do without paper and pendulum folders entirely, you no longer need a tax consultant close to your location. In the future, tax consultants will be able to look for their clients nationwide, and the specialization and qualification of the individual law firm will become more important. And what applies to the relationship between tax advisor and client is ultimately also applicable to the employees of the law firm: Those who work completely digitally can look for employees nationwide and offer new opportunities to people with disabilities, in rural areas or in structurally weak areas. The digitally driven flexibilization of work also enables part-time employment when employees take a baby break or have to look after relatives. In addition to the new opportunities, however, it must not be forgotten to carefully involve existing employees in the digital change, to take away their fear of change and to continuously develop their qualifications. If you are looking for new employees for the location, you will no longer find the best people through classic job advertisements in the newspaper, but on the new digital channels and platforms.

Digitization, networking and artificial intelligence vs. personal qualifications

In 15 to 20 years, about half of the work we know today will no longer exist in this form. And all professional groups from the office and from the administration will be most affected. Everything that can be digitized will become digital. What is digital can be networked and, in the next step, automated with the help of artificial intelligence. Tax consultants and their employees will be affected by this change, and personal qualifications will become the most important survival factor.