A new fintech tool is offering accountants an effective end-to-end solution that streamlines their workflow at provisional tax time by significantly reducing manual processes and eliminating many of the traditional pain points involved with this regular task. 

It’s called ProvCheck and it has been developed by leading tax pooling provider Tax Traders. 

Krystle Brough CA, a client director at Tax Traders, says it was driven by the need to streamline the cumbersome and often painful task of managing provisional tax notices for clients. 

A major bugbear for firms when preparing provisional tax notices is having to validate data from multiple sources. Complicating things further is having to consider the impact of clients’ tax pooling transactions, which are not reflected in the initial tax calculations. As a result, the process of checking and sending notices can be highly manual, time consuming and spreadsheet heavy. It can also lead to human error. 

“Accountants often share with us their frustration with just how many steps are involved in the workflow of creating their provisional tax notices,” says Brough. “They’re having to generate massive spreadsheets from Xero Practice Manager (XPM), and there are multiple users within that platform changing and adding data while they’re doing that. They also need to check Inland Revenue’s myIR portal and the Tax Traders portal to vet calculations.

“A huge amount of time is eaten up comparing multiple sets of data, just to calculate the provisional tax amount payable. Given how that is such a highly manual process, it can potentially lead to errors when determining clients’ tax liabilities.”

While provisional tax time generally occurs three times a year for each client, in reality, it is a monthly process for accounting firms to manage as they are dealing with clients with varying balance dates.

““ProvCheck represents a systematic change in the end-to-end workflow for accounting firms using Xero Practice Manager to generate their notices: saving time, improving accuracy and driving efficiencies.”

Creating a better way

Finding a way to reduce the time wasted validating data from multiple sources and simplifying the process of checking and sending provisional tax notices was a no-brainer. The search for a solution led to the development and creation of ProvCheck, an online tool which aggregates data from myIR, XPM and Tax Traders. This ensures that the information being presented to taxpayers appropriately considers all three data sources, without the need for manual verification.

Brough says while Tax Traders scoped and built the tool, it was one of their key partners, Grant Thornton, which helped trial an initial working prototype. That led to further features being added, as Grant Thornton’s team identified additional areas of improvement to each step in the process, ensuring that the tool was truly meeting the pain points in accountants’ existing workflow.

“ProvCheck represents a systematic change in the end-to-end workflow for accounting firms using XPM to generate their notices: saving time, improving accuracy and driving efficiencies,” says Brough. 

“When I give a firm a demonstration of ProvCheck, they’re just so excited by the prospect of this technology. It has so many advantages for firms looking for ways to improve the way people work,” she says. 

“We are saving firms a lot of time and helping them eliminate a lot of errors. People who are manually checking the data are also freed to do higher-value work and provide additional value across their client portfolio.” 

It’s a game changer 

CooperAitken is one of the firms which is utilising ProvCheck for provisional tax notices. As one of the largest independent accounting firms in the Waikato region, the practice has a dedicated team of tax administrators working full-time on provisional tax across four offices. And, with a large portfolio of clients working in farming, the lead-up to every provisional tax date is busy. 

Rory Noorland CA, one of the lead partners at CooperAitken, says they were in the process of transitioning from another accounting software provider to XPM and needed to create a new process for generating provisional tax notices. After seeing a demonstration of ProvCheck’s capabilities, they felt the tool would complement their shift to XPM. 

“As a firm we place great importance on ensuring that clients receive timely provisional tax information and ensuring the payments made are appropriate to their current trading performance to ensure we maximise their cash flow positions. ProvCheck makes this process accurate and manageable across the client base,” he says. 

“This has been a real game changer. It has really streamlined provisional tax time for our team and created greater efficiencies as far as reducing a lot of manual steps in the process. I was literally able to review provisional tax notices for 28 October while sitting on a beach in Rarotonga.” 

Driven by data

ProvCheck incorporates the Tax Traders feed from IR and data from XPM with information that Tax Traders already has, allowing you to easily see the amount of tax a client is expected to pay, based on the data which has been collected.

Brough says the platform can also alert you to a data exception, where there are differences in the data between myIR and XPM.

“One of the strengths of ProvCheck is that you don’t need to leave the platform to complete the provisional tax requirements, unless there is an exception with the data. It really is a one-stop shop and will let you know when the data doesn’t match.” 

If everything is in order, the tool generates an email to the client outlining the process for making a payment. Should your client have multiple entities, these will automatically be consolidated into a combined tax notice.

ProvCheck also generates a missed payments report, so you can easily check whether a client has made a payment or not. This represents a vast improvement on the previous method of checking, which would require someone to manually click on every single client in myIR to see if they had paid.

“That means any problems with clients missing a payment can be addressed far sooner,” says Brough. 

Using the spreadsheet method for workflow restricts you from adding work papers and doing calculations, which is another feature of ProvCheck that Brough says resonates with users.

“There’s a lot more oversight on how the process is going and how decisions are made on what the client has to pay,” says Brough.

“We are getting great feedback from our users and can tailor the basic model to suit their needs. There is a bright future as to where we can take this.” 

Celebrating 10 years working with CA ANZ

Book a ProvCheck demo with the Tax Traders team of client directors and access your free ProvCheck trial here.