We are delighted that the consultancy firm Ecovis has opted for a strategic partnership has chosen to work with us. In an interview with Paul Liese, Christoph Zehme, a member of the Executive Board, explains the benefits that the taxonomy solution offers a large law firm group such as Ecovis.

The interview in full

Paul Liese: Hello and a warm welcome to another short podcast episode from hsp. Today we’re joined by Mr Christoph Zehme from ECOVIS. Why don’t you introduce yourself briefly?.

Christoph Zehme: Hello Mr Liese, it’s a pleasure to meet you. My name is Christoph Zehme. I am a member of the Executive Board at ECOVIS EUROPE AG, where I am responsible for all IT matters.

Paul Liese: That was also the point that brought us together when it came to the whole subject of procedural documentation went. We have a few questions here that we’d like to look at over the next few minutes. The first question was: What was ECOVIS’s starting point on this issue?

Christoph Zehme: The topic of process documentation It’s not exactly a new issue. Companies are required to draw up procedural documentation. Our clients are aware of this. They’ve received the technical information from us. The obligation has been in place since 2015, following the revision of the Principles of Proper Accounting in Electronic Form – a much more complicated and, on the whole, much drier set of rules, abbreviated to GoBD. That’s how most people know it. However, we’ve realised that our clients need support with this issue. After all, we cannot and do not want to leave our clients to deal with the obligation to draw up procedural documentation on their own. And that’s why we’ve looked into what we can do to support our clients – the business owners – in this regard.

Paul Liese: And what objectives does ECOVIS pursue with its clients, apart from simply providing support with procedural documentation?

Christoph Zehme: The documentation of procedures is, of course, a legal obligation in itself. But beyond that, we naturally also want to support our clients with process analysis. After all, if I have to describe my processes for the purposes of procedural documentation anyway, I am effectively creating process documentation and can optimise the processes at the same time. I can identify where there are opportunities for digital transformation, and where there are weaknesses or risks within my organisation. And that is what we aim to facilitate through procedural documentation – or, better still, through process documentation.

Paul Liese: What were the key factors that ultimately led you to decide to go ahead with Opti.Tax?

Christoph Zehme: We set out to find the right software and analysed the market to determine which solution would allow us to work together most effectively. It was important to us that we had an interface to our production system and – even more importantly – an interface to our own client platform, Ecovis Online. This enables us to work collaboratively with our clients using Opti.Tax. We can clearly define tasks. We can collect data in interview mode. And both the client and the tax adviser can also delegate individual tasks to staff members. This enables us to compile procedural documentation very efficiently as part of a collaborative process. And thanks to version control, we can easily carry over existing data in subsequent years, ensuring that we do not merely provide a snapshot, but also maintain optimal documentation of the company’s processes and procedures over time.

Paul Liese: The fact is, the issue of procedural documentation is nothing new. As you just said, it’s been an issue since 2015. I can imagine that in some law firms within your group, the issue of procedural documentation had already been addressed on an ad hoc basis before you set about looking for a solution. In your view, what are the advantages, or how has the approach changed compared to before you started working with Opti.Tax?

Christoph Zehme: By working with Opti.Tax, we expect to be able to work much more efficiently when creating – and, in particular, when maintaining – process documentation. This is because, unlike when creating documentation using a traditional word processing programme, the individual modules in Opti.Tax ensure that everything is complete. And ultimately, the client receives procedural documentation that is as good as it gets.

Paul Liese: And he also has a comprehensive record of his processes and is shown the added value – specifically, what he can do better or differently within his own company in terms of digital working methods and the like.

Christoph Zehme: Yes. With the help of the procedural documentation, he can also lay the groundwork for a tax compliance system. He can also describe all the processes for his own internal control system. And at ECOVIS, we can provide support throughout the entire process, drawing on the combined expertise of our tax advisers, auditors, solicitors and, of course, management consultants.

High on the agenda: the topic of procedural documentation

Paul Liese: Well, the issue of procedural documentation wasn’t exactly the main priority for many clients during the coronavirus pandemic, nor was it for many law firms, which simply had to focus primarily on submitting applications for bridging aid. How do you see the issue of procedural documentation developing over the next 12 to 24 months?

Christoph Zehme: We actually regard the issue of procedural documentation as a top priority. Why? The government is currently spending a great deal of money in many areas. That money has to be recouped. And it will be recouped through tax audits. During these audits, the easiest thing to check is whether procedural documentation is in place. If not, that is the first point of investigation for the tax auditor. Let’s look at an example: the changes to VAT rates, which came into effect on 1 July 2020 and 1 January 2021. Clients must document the changes made accurately. The tax auditor will examine in detail how the till software was configured. What changes were made in primary and secondary systems, and how? What records were kept in a traceable manner? The easiest place to find all this information is in the procedural documentation. And if this is not available, it presents an opportunity for tax auditors to easily secure funds from the tax audit.

Paul Liese: Do you actively approach clients, draw their attention to the matter and offer to deal with it? Or do you say: „Let them fall into the well first, end up with an audit order, and then come to us“?

Christoph Zehme: No. As the service department at head office, we’re able to make this software available to all our law firms, so we do think that, as the new year begins, we’ll be reaching out to our clients again to let them know that we can now support them even better than before in preparing procedural documentation. After all, we naturally want to offer our clients the best possible support. We certainly don’t want to leave our clients out in the cold or let them fall into a well. That wouldn’t help us at all. We need to ensure that our clients are prepared for the risks.

Paul Liese: Yes, and this goes hand in hand with the advantage for the business owner that they not only receive a document for the auditor, but also have their processes optimised for their own benefit and are shown potential opportunities. That is also something I notice time and again with consultants. A tax adviser or auditor has no interest in installing their process-optimisation software at a client’s premises, whereas management consultants or IT software firms specialising in such areas tend to present this as a personal interest they wish to sell. That’s why I see the tax adviser as being neutral and, as a result, having a completely different standing with the business owner when it comes to reviewing and optimising processes. From that perspective, it’s an opportunity for all parties.

Christoph Zehme: And a lot has changed since then. If you look at the impact that 2020 had on businesses, there are many things that, with hindsight, had to be changed and adapted. Many tried-and-tested processes have been thrown out and are neither documented nor have they actually been fully taken on board by everyone. Naturally, process documentation also offers an opportunity to bring all staff back up to a uniform level of understanding.

Paul Liese: Yes. This week I had the opportunity to work with a company and a Michelin-starred chef and the aim was quite clearly not just to document things for the auditor, but also to put into writing the knowledge of the person in the company who knows everything, so that, should they be unable to carry out their duties, someone else can take over and look up how things work and where. That’s why people often refer to it as a sort of business owner’s handbook. What happens if the business owner is unavailable for two or three weeks? Who will then take over, and who has all the relevant knowledge? In my view, the benefits for all parties are obvious. That’s why I find it so exciting to tackle this together with your team and the law firms. We’ve already completed a few projects. I’m looking forward to seeing what happens in the coming year.

Christoph Zehme: We’re also looking forward to experiencing this together with you and your team and really getting off to a flying start in 2021.

Paul Liese: That’s how we do it. Thank you very much for your time and for sharing this information. And we wish everyone who’s been listening all the best! See you next time!