API Spotlight: Realized benefits of the Tax Transfer API

Enabling innovation with APIs in tax workflow

Shahbaz Khan: 

Kenny, could you maybe just start off by introducing yourself and giving us a bit of background on your role as Innovation and Technology Director?

Kenny Cheung:

Yeah, sure. So I've always been in love with technology. My Masters was in information system engineering, I spent six years in an investment bank as an application manager, and then the last 15 years in tax and accounting technology. And my role in Grassi really is basically to help the team minimize the tedious repetitive work, and increase both quality and efficiency in their day-to-day life.

Sounds like very impactful function within the firm. But Kenny, before we start diving into the Tax Transfer API, just as a refresher for everyone, the Tax Transfer API is one of CCH Axcess Tax’s most commonly used APIs. It helps enable the flow of data, either import or export, directly from the tax return into a third -party application like Excel. Now with that context being said, Kenny, describe to us how Grassi has used this API.

Sure, so some of the problems that I saw before we even started investigating were a lot of people really were taking numbers from their workbooks and manually typing them into CCH Axcess Tax. Some of them would be using the import function, but sometimes it might even be faster to type it in for just five to 10 data points. So, what we did was basically talk to different tax teams, people that worked on 1040, 1120, 1120S, 1065, 990s, to figure out what data points they are using. We took a look at their workbooks and basically help standardize, so that with a standardized workbook, we're able to link up the different data points that they need to get into CCH. And with the help of the CCH API, they're basically doing what they've always done using the same workbook. But at the end of that, instead of manually typing numbers into CCH, they can just click a button and those data will be pushed into the CCH Axcess locator.

Quantifying the benefits of tax workflow automation

Thanks Kenny. I can imagine being able to just push a button to move data from the workbook directly into the tax return has tremendous benefits. Obviously, efficiency, accuracy, even helping automate things so you can even go beyond the data entry part and other areas of the workflow. But could you maybe speak to some specifics on the benefits the firm has realized using this tax transfer API and the workflow you've automated?

Yeah, so in terms of time saved, we're talking about anywhere between 30 minutes to 90 minutes per return. And so obviously, it's not just the CCH API piece, right? Because if you're talking about a large locator with, let's say, 1,000 or 2,000 data points, then obviously, you're closer to the 90 minute mark. But inside the workbook, there will be other automatic mapping and integration, automatic checks of data to make sure that all the data inside the workbook actually does not violate any kind of data restriction inside CCH Axcess as well. So I would say on a very conservative estimate, you're looking at saving about 30 minutes per return with the help of the CCH API. And multiply that by how many returns that you have.

Wow, that's incredible. can you just walk us through a little bit about the process of migrating to this new process? I mean, obviously there's change required and what we hear from firms is the change management aspect sometimes is more challenging than developing the ideal workflow, which it seems like you have with the workbook moving the data over. How did you approach the change in your role and get buy-in from the firm's practitioners to use this?

I think that that's three very, very crucial questions, right? And I'm just thinking of the best way to answer them. And I think that the three big ones are how to win people over, how to standardize the process and how to apply the change management. And I guess I'll probably start with how to win people over. 

Obviously, my first project was not to just say, ‘use this API,’ because people don't really believe in like kind of a black box technology with very minimal insight on what and how data is being transferred. So before I actually implemented the API, we did a lot of data transformation and data automation for the team. So for example, we had created different ways and automation and macros to help different teams automatically transform the QuickBooks extracts or client trial balances into a more standardized process. 

I had a team that had already had a standardized chart of account. And essentially all they do is copy in the account and then copy in the amounts with credit/debit into the right amounts with positive/negative kind of things, you know, the cleanup and reconciliation. So with that process, that used to take them about 15 to 20 minutes per return. And we were able to automate it. And you can run it in literally 30 seconds. And obviously, that caught their attention a little. And obviously, also, it gains a little bit of trust and reputation with our technology. So then with that said, they were like, ‘OK, then now that this first piece is automated, how do we move on to the next piece? How can we then push all of this data into CCH Axcess?’ 

That's when we started standardizing that workbook.so there is only one 1120; there's only one 1120S; there's only one 1065 workbook. So everyone in the firm, if you want to automate your tax return, this is the workbook that you use. And obviously that takes a lot of sitting down with different tax teams and different offices to make sure that this workbook truly accommodates their needs as well because obviously some teams or some offices would require a much smaller workbook than other offices based on the client size and the client requirements. 

But you really have got to make one that really is compatible with everybody. And now once you have that, you can basically standardize your workbook and then start doing the standardized mapping and account mappings from trial balances to CCH tags. And then once you have that locked in, I think that's when you truly apply the whole change management to basically do training, show people how it's done, continuous improvement and support throughout at least one busy season. And obviously for us, I think we really pushed hard in the first year and people did see the value. And so for a lot of our customers or tax professionals, after the first year, I think almost everyone was on board already.

Making the case for technology investment

It seems like there's a lot of input-driven standardization required and looking for early wins to demonstrate value to win people over. You've done a fantastic job over there. Kenny, in your role, how do you make the case for technology and automation investment? I mean, sometimes we hear from firms there's apprehension towards investing in automating processes. It seems like the right thing to do. How did you approach that?

So that's quite interesting too, because when I first joined the firm, I definitely wasn't as busy as I am today. And I'm a huge, I guess, data guy, SQL visualization. And one of the things that we were dealing with back then was cleaning up client data. We use an application called Star, which I think a lot of people do as well. And while looking at the database, I created a couple of visualization reports based on our firm's data. And I could see that corporate returns and personal returns and high net worth returns were really high up in terms of hours and spending. So I figured that might be one of the best and easiest place to start. And I think that that worked out to be quite true. Obviously, this is focusing on tax and not the other part of accounting world.

And I would also add that, obviously, we also had to go through a lot of questioning and interviews with superstars from different tax departments. Because I would say that the people are always the most important, and the smartest ones always have the greatest ideas. So as a technologist, I alone would never be able to come up with the best solution if no one comes to me and says, ‘Hey, Kenny, this process is currently really inefficient, and I think if we do it like this, it will make it a lot better.’ And I would help bring in additional technology and ideas to make that happen.

So I guess that’s no different than a software company going to their customers for feedback or contextual design and guiding their products. Kenny, could you maybe speak a little bit about other automation initiatives going on at the firm?

I think for the tax part, we are pretty solid at this moment, because when it comes to Axcess, I think most data points can be imported through the API already. Some of the best things I guess related around it are APIs, including bind and roll forward, or client creation is another good one. So we do have our own client onboarding and engagement letter system. And so obviously when a client is created, we are also able to automatically create a new CCH client automatically. And I think that really helped, first of all, improve the time saved. But what I really love about it, which I don't think people consider, is the quality of data. Because I'm a huge data/database guy. 

Any firm that I've worked with, they've always had very inconsistent data. Because once you create a client or sometimes you create multiple clients, people don't really have time to clean it up. And let's say if five people work on the same client, if they were to have a new entity below a parent entity, they might be creating duplicates. And if you can centralize that to make a single source of the truth database and then hook that up to CCH, then basically all your systems are always going to have golden data at all times. And I think that ability from CCH has made our life a lot easier as well. With the help of the API, I think it makes technology a lot easier.

Hard work pays off

Thanks for that Kenny. I think we do hear that as a common theme, ‘the power of the platform’ as I like to say. But Kenny, I guess before we wrap up, any other advice you can share for firms exploring going down a similar path to yourself and the Grassi team or thinking about using APIs to automate workflows?

Yeah, I think a lot of people may not love hearing this, but I think it's the truth. And just recalling our path to success here, every crucial step was done by professionals, especially helped by tax professionals that were really willing to sit down and put in the time to make life better for themselves and others by doing overtime. Because most of the time a tax professional would have to continue doing their job, right? So a lot of people would be like, ‘Well, it's already 6 pm, and I gotta go.’ But there's a lot of really good ones who are like, ‘I'm gonna stay here with you till midnight so that we can make this better and so that our life will be better in the future.’

I feel like a lot of people want things to be better, but may not be willing to put in the extra overtime and hard work. And I think that the toughest piece with technology is that technology cannot move ahead without the help of someone who actually knows the field and data and the process. Like myself alone, I will not be able to create an amazing workbook without knowing what the users really do. And sometimes it's really hard because, especially during busy season, when the tax professionals are working till like 10, 11, it's difficult to be like, ‘okay, now I'm done with my job, let's spend like four hours with Kenny.’ But I was very lucky to have professionals who were willing to do that. And I think that made the whole process move so much faster and so much more efficiently.

That definitely does seem like quite the investment. Hopefully for firms listening, it's an indication of managing the expectations of your professional staff that will be involved in automation initiatives. So they don't have to worry that late, but do get to experience the benefits of automation and invest in the value of it. But hey, Kenny, listen, thank you so much for making the time today. Really appreciate all the insight that you shared on the tax transfer API and the benefit that you and the whole team of Grassi have realized. Obviously a lot of hard work went into it and it's evident by what you guys have been able to realize on the other side of it.