A new fintech tool is offering accountants an effective way to streamline their workflow at provisional tax time, significantly reducing manual processes and eliminating many of the traditional pain points in this regular process.

Managing provisional tax notices for clients is often time-consuming and comes with a margin of human error. Driven by a need to improve this, tax pooling experts Tax Traders have launched a market-first tool that can be deployed to suit most accounting firms’ needs. Developed alongside professional services firm Grant Thornton, this new tool has created greater efficiencies around provisional tax time.

Validating data from multiple sources and factoring in the impact of a client’s tax pooling transactions is a cumbersome process and requires the highest level of accuracy. Joel Gauntlett, partner at Grant Thornton New Zealand, saw an opportunity to streamline operations. “I had often thought that there's got to be a better way to do this,” he says.

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. As a result, Gauntlett says, “finding a way to improve how it is done was something Grant Thornton was very keen to explore.”

Finding a better way

In 2022, Gauntlett approached Tax Traders and put the challenge to them: find a way to improve an inefficient workflow of checking and sending provisional tax notices.

As the leading technology-focused firm in the market and an existing key partner to Grant Thornton, this was a natural fit for Tax Traders, says Krystle Brough, client director at Tax Traders.

“Grant Thornton has earned a reputation for progressing better ways of working. They’re definitely one of the most progressive firms in terms of adopting new technology,” she says.

Within a few months of initial scoping discussions, a working prototype was ready for trial by the Grant Thornton team. This led to further features being developed as the Grant Thornton team identified additional areas of improvement to each step in the process, ensuring that the tool was truly meeting the pain points in the existing workflow.

The result is ProvCheck, an online tool which aggregates data from myIR, Xero Practice Manager (XPM), and Tax Traders, ensuring that the data being presented to taxpayers appropriately considers all three data sources, without the need for manual verification.

It represents a systematic change in workflow for accounting firms, saving time, improving accuracy, and driving efficiencies, says Brough.

While the original concept was designed and developed for Grant Thornton, any accounting firm using XPM can benefit from this tool, she says.

“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 eliminate errors and improve the way people work,” she says.

Driven by data

The tool is built as a one-stop shop and uses a data feed from Inland Revenue to Tax Traders.

“It incorporates the feed from IR and data from XPM with the information that Tax Traders already has. The workflow process is then activated, and you can easily see the amount of tax a client is expected to pay, based on the data that has been collected,” Gauntlett says.

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

“One of the strengths of ProvCheck is that accountants 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,” she says.

If everything is in order, the tool then generates an email to the client outlining the process for making a payment and the user can easily check whether a client has made that payment or not, which is a vast improvement on the previous method.

“ProvCheck generates a missed payments report which helps our team check back with the client in case they have forgotten to pay it or have paid it into the wrong account, for example,” says Gauntlett.

“That means any problems can be addressed far sooner,” says Brough.

Using the spreadsheet method for workflow restricts you from adding work papers and doing calculations, she says, which is a feature of ProvCheck that 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,” she says. “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,” says Brough.