Software makes this extensive mandatory task easier

Since 1 January 2015, so-called procedural documentation has been mandatory for all taxable companies that process data digitally. It is increasingly coming under the scrutiny of tax inspectors, and companies are consequently coming under pressure to draw up this extensive documentation. Software can help tax practice firms to prepare procedural documentation for their clients more quickly and with less effort by automating certain steps through the use of taxonomies.

Since 1 January 2015, companies of all sizes have been required, as an essential part of their electronic accounting systems, to be able to present procedural documentation for data-processing systems during tax audits. If this is missing, a tax inspector may, on the grounds of this procedural irregularity, impose an additional tax assessment of up to 10 per cent of turnover. The audit guidelines actually require them to take greater account of this procedural documentation. For organisations such as tax consultancy firms, which prepare this procedural documentation for their clients, this is a challenging issue, as the legal situation leaves considerable scope for interpretation.

ECOVIS KSO Trust and Tax Consultancy uses Opti.Tax

To produce procedural documentation, ECOVIS KSO Treuhand- und Steuerberatungsgesellschaft mbH & Co. KG, based in Düsseldorf, uses the application Opti.Tax Documentation HSP Handels-Software-Partner GmbH, based in Hamburg. As a large firm, ECOVIS KSO handles clients across all sectors of the SME market. With around 6,500 employees, the ECOVIS Group supports SMEs, including family businesses, owner-managed companies and the self-employed. It operates more than 100 offices in Germany and has partners in over 70 countries worldwide. It thus brings together national and international specialist and sector-specific expertise from tax advisers, auditors, solicitors and management consultants.

In order to tackle the issue of procedural documentation, the Düsseldorf-based law firm sought a suitable solution and, whilst conducting its research, quickly came across hsp, as there are not many software providers in this field.

Automated template creation thanks to taxonomy

Previously, tax advisers had to search through various document templates to find the elements of the procedural documentation that applied to each client. Opti.Tax eliminates this manual work. The tool utilises taxonomies and, based on the user’s input, dynamically builds the appropriate templates step by step.

This makes things much easier, as staff do not have to manually search through hundreds of pages; instead, the software automatically compiles the appropriate templates based on the input. The table of contents and the appendix are also generated dynamically; neither needs to be maintained nor formatted. Changes are automatically made and added in the relevant places.

The software is logically structured and features a live preview and live on-screen documentation: „Users can view the report immediately and assess the impact of any changes. Another advantage is the ability to customise the templates to suit the user by integrating logos,“ reports Sascha Kleinschmidt, a tax assistant at ECOVIS KSO.

Automated process documentation

Implementation and use

Opti.Tax has been in use at ECOVIS KSO since April 2019. The firm had previously trialled another piece of software but was not satisfied with it. hsp visited the firm for two demonstration sessions, during which the tool impressed with its ease of use and functionality. The implementation also went smoothly and was completed swiftly: an Active Directory integration was set up to ensure secure access. This was followed by a face-to-face in-house training session, enabling the tool to be put to use promptly. Today, five staff members work with Opti.Tax.

Clients can use the integrated Excel tool to answer the initial questions about their procedures. The data is imported into Opti.Tax and inserted in the correct place. Basic information is automatically maintained by the system. Tax advisers then refine details regarding processes and control systems, enter responses and assess the documentation. The tool’s planned cloud integration will enable clients to view the procedural documentation themselves and add data, which will also make the tax adviser’s work easier.

ECOVIS KSO intends to review, supplement, verify the accuracy of and revise the procedural documentation at regular intervals. It’s easy to do with the software, it enables continuous documentation: with just a few mouse clicks, a change history for the document can be created. As required, a tax inspector can also view previous versions within the tool, enabling them to examine the different versions and identify any differences.

A broad pool of knowledge optimises the solution

Text suggestions and sector-specific templates are due to be integrated in the near future, which will make work even easier. The wide reach within the sector and the resulting pool of knowledge are also beneficial. This is because Opti.Tax is used by many law firms and tax consultancy practices and is a living piece of software. Users can provide feedback and suggest improvements, which are reviewed by hsp and implemented where necessary. In this way, the tool remains closely aligned with users’ needs and is constantly optimised – currently on a weekly basis.

Conclusion

When drawing up procedural documentation, ECOVIS KSO benefits from the simplicity and dynamic structure of hsp’s Opti.Tax software. Individual elements for the documentation no longer need to be selected from template files, which significantly reduces the workload. Furthermore, it is easy to make changes and manage versions. Thanks to continuous updates, the solution remains closely aligned with clients’ needs.