Digital Transformation in Tax Consulting

Digitalization is an issue that affects all industries and professions. The digital transformation does not stop at tax consulting. The law firm of the future is facing new challenges, but there are also new opportunities. The digital collaboration with clients enables new opportunities, modern business areas will open up and you can offer consulting services at significantly lower costs.

The first steps towards digitization
are already taken

The digital transformation has long established itself in tax consulting. The software covers more and more tax consulting services, from simple account management for clients to electronic files. The tax authorities have also introduced increasingly advanced electronic processing systems, to which you as a tax advisor have had to respond. Contacts with clients and services for clients have already been digitized to a not insignificant extent.

What are the next steps in the digitization process?

However, this does not mean that the industry is fully digitized. With increasing IT support, it will be easier to offer digital consulting services better and more cost-effectively. Above all, areas of activity that can be strongly automated will be replaced by software solutions. These include simple accounting services, data collection and analysis, and communication with clients and the tax authorities.

The classic segment of assistance with tax returns also offers strong automation potential and will be done “at the touch of a button” soon. All the necessary documents will be captured electronically, automatically entered into the software, and checked. You will remain solely as a control authority.

Consulting services, especially for companies, can be provided much more closely as a result of the digital transformation. Since you as a service provider can now be directly in the company, as it were digitally, further consulting services on your part will be easier and more in demand. Being tied to a specific location is becoming increasingly obsolete.

Which opportunities will digital change offer?

As with almost every technological advance, digitization will offer two key benefits: The service offered will become more efficient and areas of activity will be automated. This also reduces costs. To take advantage of these benefits and not lose out to competitors, you need to embrace this change early on and seize the opportunities it offers.

In concrete terms, the savings potential lies primarily in integrated document management systems for tax consultants. Since your services are strongly document-based and your field of activity is very much organized by standards, appropriate software can automatically record and perform large parts of your routine work.

These software solutions are now so flexible that any number of employees can also work on the same files, and interfaces can be used with software solutions at clients’ sites for easier document capture and service delivery.

This saves a great deal of time, which can now be used for more intensive and more individual consulting services. Herein lies the second concrete advantage. You can expand your business areas and, for example, offer more customized consulting services that were previously too expensive or time-consuming. Demand for consulting services in the subject areas of digitization, operational and tax management consulting, and the business organization remains high and will probably continue to rise.

Last but not least, a digital transformation offers the opportunity to offer one’s own consulting services on a supraregional basis. It will no longer be necessary, or only rarely, to conduct client meetings face to face. This will eliminate the need for the client to visit your office in person or for you to visit the company.

What challenges arise with digitization?

The opportunities presented by the digital transformation in tax consulting are great, but new challenges also arise. Of course, your priority is to master the new software solutions and to continuously train yourself in them and the possibilities of further consulting services. This also applies to your employees.

Finding new specialists will also be an increasing challenge in the future. On the one hand, younger generations choose their profession more according to the working environment and “soft” criteria than previous generations, and on the other hand, tax advisor training has not yet been fully adapted to digital working conditions, so new tax advisors are not yet fully qualified in this area.

Increasing independence from the firm’s location is likely to lead to greater competitive pressure. This applies both to client acquisition and the recruitment of qualified specialists. At the same time, however, both offer the opportunity to sharpen one’s consulting profile and to specialize in certain subject areas.

Switching to suitable software solutions and making one’s firm fit for the future will also require some investment. This is especially the case if you have not yet relied heavily on digital solutions and now have to take a major step to make the switch. However, these costs will quickly pay for themselves. Significantly faster and more efficient service delivery will make the investment worthwhile in no time. Not to mention the fact that you can otherwise be pushed out of the market more easily by competitors, and new clients are increasingly looking specifically for external service providers with digital solutions.

The profession will change, tax consulting will remain

The digital transformation in tax consulting does not mean that consulting services will disappear and be replaced by software. The profession of tax advisor will remain, but its areas of activity will continue to change. New IT solutions will continue to automate parts of traditional tax and business consulting. As an expert, however, your professional competence will continue to be in demand. Instead, there will be new opportunities to apply your expertise to new business areas and thus increase revenues through individual consulting services, while automated processes for “standard services” will reduce costs. All in all, you can therefore look positively into the future if you transform your law firm into a law firm of the future.