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CCH Auto

Improving practice
efciency through
tax innovation
Books & Print Online Software Fee Protection Advice Lines Consultancy CPD
Books & Print Online Software Fee Protection Advice Lines Consultancy CPD
CCH Auto: Improving practice efciency through tax innovation 1
Improving the tax process
Think of all the steps that you and your staff have to go through when preparing a clients tax return, from
receiving a bundle of unsorted papers or a bunch of emails to submitting an approved tax return.
These steps form a process and, like any process, there are opportunities to make it more efcient:
Data collection How can you encourage your clients to give you more, and better quality, information?
Could they use email? How about a secure area on your rms website?
Data entry Is it possible to reduce the amount of data entry your staff have to perform? Can information
be extracted from purely electronic sources, like PDFs and scanned documents?
Data review What steps do you take to check the information thats been entered, before asking your clients
to approve the return? What more could you do?
Data submission How often are returns rejected by HMRC because of incomplete or inconsistent data?
Can rejection rates be reduced?
CCH offers a range of tools to streamline and improve every aspect of the tax process. By making each step more efcient
and by eliminating the potential for errors, we help to make the entire process simpler, easier and faster. Your staff spend
less time dealing with mundane admin and more time doing the things that can really make a difference, to both your
clients and your own practice.
In this document well be concentrating on just one of these tools: CCH Auto, recently shortlisted for Best Technological
Innovation in the annual Taxation Magazine awards.
CCH Auto: Improving practice efciency through tax innovation 2
*
Source: CCH estimate based on client interviews (May 2010)
What is CCH Auto?
For an average personal tax return, about 80% of the chargeable value is spent simply identifying and sorting source
documents, extracting information and manually typing it in.
*
Until now this monotonous, low value work has been unavoidable. Its a process that hasnt fundamentally changed since
the rst computerised tax systems for accountants were launched in the UK in the 1980s. Clients send in their papers so
that their accountant can sift through them, page by page, nding and highlighting relevant gures and typing these one
by one into their tax preparation software.
CCH Auto changes everything.
Starting with either paper documents or electronic les, CCH Auto automates the entire process of collating documents,
creating a client le, identifying and extracting tax-related information and completing the tax return. It eliminates most
manual data entry and it simplies the review process.
CCH Auto is clearly a major innovation in tax technology. In a sense, accountants didnt know they needed it because they
had no idea it was possible (and nor did we until we tried!). But once they have seen CCH Auto in action for themselves,
understood its potential and realised what it can do for their practice, their enthusiasm is genuine and obvious. As one of
our clients put it Tax returns, dare I say it, are fun to prepare now. Thats certainly an innovation!

Recognising the importance of CCH Auto and its impact on the way in which tax work is performed in the UK, in March
2012 the software was shortlisted for Best Technological Innovation in the prestigious annual Taxation Magazine awards.
The winner will be announced in May.

Click here to see the video interview


CCH Auto: Improving practice efciency through tax innovation 3
What makes CCH Auto
so innovative?
When you look at a PDF of a P60 or a scanned share dividend voucher, its as if youre looking at a photograph of the
document. The le contains plenty of information, but it has no structure. When humans read these forms theyre able
to identify the gures that represent total pay or tax credit and it might be possible for them to copy and paste this
information somewhere else, but for computers its a different story, at least in the UK.
In the USA and Canada, most taxpayer information is printed onto standardised forms with a xed layout, which makes
document recognition much easier. Because of this, in North America CCH has been able to develop Intelligent Document
Recognition technology to extract data from the key elds of a wide variety of forms.
What makes CCH Auto a unique innovation is that here in the UK we have developed a way to recognise forms and
elds based on their content rather than their layout so that the software can deal with wide variations in form design.
For example, CCH Auto not only recognises a dividend voucher as a dividend voucher, it can also nd the area of the
dividend voucher which contains information about the tax credit and extract this gure to use in the clients tax return.
And it does this without user intervention.
CCH Auto allows accounting practices to get all the benets of outsourcing data entry without any of its downsides,
such as loss of control, security issues and concerns over quality.
CCH Auto: Improving practice efciency through tax innovation 4
Meeting accountants needs
The existence of the North American scanning and data extraction systems gave the CCH UK Development Team its
initial stimulus to investigate the feasibility of a similar system for the UK market.
Without standardised form layouts, they always knew it was going to be a tough challenge, so their rst action was to
conduct market research to clarify accountants requirements and opinions.
When asked what factors would drive the adoption of paperless technologies, accountants identied the following as
their top four:
Freeing up fee earning staff
Working from a single electronic client le
Having an inclusive document management system
Automating data capture
Over 40% of respondents said that keyless data entry would either be very useful or essential to their practice. No surprise
perhaps when you consider that almost a third of those surveyed reported that specialist staff spent between 25% and
50% of their time on non-chargeable tasks.
Although they clearly understood that it would bring benets, it has to be said that our survey respondents were quite
sceptical about whether keyless data entry would ever actually be possible. Fortunately, our Development Team is always
up for a challenge!
Ever since then we have worked closely with our clients and other tax and accounting professionals to develop CCH Auto.
Their suggestions and their continued enthusiasm for the software have been so important in the development process.
CCH Auto: Improving practice efciency through tax innovation 5
You can see CCH Auto in action
at www.cch.co.uk/auto
What does CCH Auto do?
To understand what CCH Auto does, its helpful to break its operation down into four discrete functions. In practice,
of course, these four functions form an integrated workow with no boundaries between them.
Referring back to the original CCH client survey, these four functions were designed to satisfy the top four requirements
of the respondents:
Freeing up fee earning staff
Working from a single electronic client le
Having an inclusive document management system
Automating data capture
As we will see, with CCH Auto the entire job of collating documents, identifying relevant data, reviewing the
information and posting this to the tax return can be completed quickly, securely and accurately and with minimal
manual intervention.
tax return
workow
review
and process
organise and
bookmark
extract
and validate
capture
and le
CCH Auto: Improving practice efciency through tax innovation 6
Step 1: capture and le
delivering automated document management
The challenge: Tax staff need a simple way to capture and le tax source documents as theyre received from clients.
These come in a variety of formats, including softcopy.
The solution: For each client, CCH Auto provides a single point of access for all source documents. These can be added
to the integrated Document Centre by scanning the paper originals (using any scanner with a TWAIN or ISIS interface),
or from electronic les sent by the client (in TIF or PDF format).
The benets: Adding source documents to the Document Centre is a simple process. Once its been done, tax staff no
longer have to refer back to pieces of paper or les scattered across the network everything they need can be accessed
directly from one location.
All the source documents for a single client
are stored together in the Document Centre
CCH Auto: Improving practice efciency through tax innovation 7
Step 2: organise and bookmark
creating a single electronic le
The challenge: Its possible to assemble a single PDF le from scans and other sources and to order its pages manually
to achieve some degree of organisation. However, unless this process can be automated, it will require professional staff
to manually check and classify the information.
The solution: As well as storing an individual softcopy of each document, CCH Auto also creates a single client le in
PDF format. Using its innovative Data Dictionary the software automatically adds bookmarks to identify each document
and document category (Income, Deductions and Reliefs etc) a unique feature of the CCH software.
The benets: No matter what order the original documents were in when they were added, each PDF is organised in
exactly the same way, without any intervention from fee earning professional staff. Having every client le in exactly the
same order makes them easier and quicker to review.
Source documents are analysed and
identied to create a bookmarked PDF in
exactly the same format for every client
CCH Auto: Improving practice efciency through tax innovation 8
Step 3: extract and validate
automating data capture
The challenge: If theyre working from a collection of paper documents or individual softcopy les, how can tax staff be
certain that theyve transferred information correctly and completely from source documents to the clients tax return?
The solution: The Data Dictionary in CCH Auto doesnt just recognise forms. It also recognises individual elds within
those forms and it knows how this information maps across to a personal tax return. The system checks the extracted
data to ensure that its valid for the tax return and then presents the source documents on screen together with the
information thats been extracted from them.
The benets: With the original documents and the extracted gures presented side-by-side on-screen, review now
becomes a simple matter of checking one against the other. Figures can be edited and notes can be added to create
a secure, paperless audit trail.
After validating the extracted information, its presented
alongside the original form for quick review
CCH Auto: Improving practice efciency through tax innovation 9
Step 4: review and process
freeing up fee earning staff
The challenge: Manual data entry is slow and open to error and it also requires professional staff to perform, or at
least to manage, the work. Until now there has been no other way to transfer information from source documents to
a computerised system.
The solution: Once the review has been completed and the extracted data has been checked, theres just one more thing
to do in order for CCH Auto to nish the job. Information is transferred to CCH Personal Tax with a single button click;
within seconds the clients tax return is updated.
The benets: Fee earning staff spend less time on routine admin and data entry and more time on value added activities.
The entire process is quicker and transcription errors are eliminated.

The clients tax return is updated from the
information extracted by CCH Auto
CCH Auto: Improving practice efciency through tax innovation 10
Tax workow with CCH Auto
Although its clear that CCH Auto can be used to improve the single process of preparing a tax return from source
documents, we believe that the software should be seen in the wider context of automating and simplifying the entire
practice workow. To this end, the successful implementation of CCH Auto involves us working with rms so that the
software is fully embedded in their working practices.
Our vision is for systems in which electronic data capture, document management and task and workow management
are tightly integrated. In these systems data is digitised as early as possible and electronic documents replace paper
wherever possible. Clients are encouraged to share information digitally, from the simple use of email to the sophistication
of a Client Portal.
Typical tax workow using CCH Auto
PDF
tif
PDF documents submitted
via Client Portal or email
hardcopy documents
scanned by
clients or the
practice

1
copy of individual tax source
documents stored in the
Document Centre
single bookmarked PDF for
each client with a consistent
format across all clients
2
3
PDF
CCH Auto identies and
categorises each document

P60

4
the data in each document
is automatically identied
and highlighted
data is validated and displayed
on screen
review notes are actioned
with a single click
information is transferred
directly to the clients tax
return for approval and ling
5
HM Revenue
& Customs
initial on-screen
review
request for more
information
review notes
added to the PDF
extra documents
added to the le as
they are received
CCH Auto: Improving practice efciency through tax innovation 11
The client perspective
PK Group
Technology is a very important part of what drives this rm. Many of our client services depend on IT and were always
looking for ways to improve our efciency and expand the services we offer. By making routine processes as efcient as
possible, you allow your professional staff to focus on earning fees rather than performing admin like data entry, so when
we heard about CCH Auto we were keen to try it.
The rst major benet comes simply from scanning tax source documents and getting them off your desk. Just having
a single PDF containing all the source documents in one place is a big improvement and the automatic bookmarking
is a great feature which we found worked very well. Once documents have been scanned, staff can access everything
together, without having to hunt around for papers. When a client phones, you can get hold of the information straight
away without leaving them hanging on the phone or having to call them back. It helps to project a professional image and
makes everyones life easier.
I hadnt thought much about the next stage the automatic transfer of data from the scanned documents into CCH
Personal Tax. To be honest, I didnt really see how this could work but it does! The software identies the form from the
data that it contains, picks out the information that needs to be transferred and maps it across to the tax return.
We dont consider CCH Auto to be a direct replacement for professional staff because completing a tax return isnt just a
matter of transferring numbers from one place to another, it also involves thinking about what lies behind those numbers
and what that might mean to the client. However, CCH Auto is a great way to remove the drudgery from the process and
make it more efcient. Of course, the less time professional staff spend transferring numbers, the more time theyve got
for doing that all-important thinking.
Theres no doubt that CCH Auto can speed up the processing of tax returns, though its too early to quantify the time
savings. What we can say with certainty is that it simplies the process. And that has to be a good thing.
Simon Coles
Partner
When a client
phones, you can get
hold of the information
straight away without
leaving them hanging on
the phone or having to
call them back.
CCH Auto is a great
way to remove the
drudgery from the
process and make it
more efcient.
CCH Auto: Improving practice efciency through tax innovation 12
Understanding the challenges
At this point its worth looking in detail at some of the challenges that the CCH UK Development Team faced and how
they overcame them.
The challenge of different form layouts
Consider a relatively simple form like a P60. Although they all contain the same basic information, across the country
thousands of different layouts are used by payroll departments and commercial software vendors.
The challenge is to recognise the form based on the information it contains but without the need to nd any of that
information in a xed position on the page. And without the need for human intervention.
Our Development Team integrated a number of technologies to ensure that any P60, regardless of its layout, is recognised
as a P60. At the same time that it recognises the form, the software also identies all the data on this form that can be
used to complete a tax return.
CCH Auto also allows the user to identify and extract additional information from the form if necessary. The software
saves any changes that are made for that form type so that, if it ever encounters the same form in the future, it can
perform a full data extraction.
The challenge of creating and editing PDF les
Every accounting practice will be familiar with Adobes Portable Document Format. Many commercial software packages
now produce PDF les and clients will often supply information downloaded in this format from their banks and other
sources.
Although the PDF reader is widespread and free, most practices have a limited number of licences for software that will
allow them to create and edit PDF les.
To overcome this, our Development Team built PDF writer functionality into CCH Auto. This allows the software to create
a bookmarked and indexed PDF, but it also allows that PDF to be edited, re-ordered and annotated, without the need for
additional licences for PDF writer software.
CCH Auto: Improving practice efciency through tax innovation 13
*Source: Client testimonials published on the CCH US website.

See, for example: CCH Auto tackles paperless tax returns.


Our journey to market success
May
2011
March
2012
May
2010
January
2010
The initial work on CCH Auto, including market research and client interviews, began in early 2010.
Even before they started, the CCH UK Development Team had high hopes for CCH Auto, based on the experiences
of US and Canadian accountants using the somewhat less sophisticated software available in these countries.
One Top 50 US rm, for example, measured an average saving of 22 minutes for every 25 pages of source
documentation and CCH clients in the US typically report savings of around 20 minutes per return.
*

By May 2010 an early prototype of CCH Auto was available to demonstrate at the annual CCH Conference. We used
this to get ideas and feedback from our clients and to provoke thought and debate on the wider topic of workow
automation. This is an area where we believe its possible for accounting practices to make substantial productivity gains.
After twelve months of development and renement, Version 1.0 was launched at the annual CCH Conference in
May 2011. By this time CCH Auto could recognise 32 form types and it could extract and post data from 14 of these
to CCH Personal Tax. The software received a very positive reception from our clients and from members of the press
who saw it at our media launch.


Since then over 25 sales have been made and many other rms have expressed interest and seen demonstrations of the
software. The overwhelming response has been positive and when people see for themselves the automatic posting of
gures extracted from paper or softcopy originals, the single most common reaction is somewhere between amazement
and disbelief, as our case study demonstrates. CCH Auto is certainly creating a buzz!
Notwithstanding its early success, Version 1.0 was always seen as the starting point rather than an end in itself and
CCH Auto has undergone continual development since then, focusing on three areas:
Increasing the number of form types that are recognised
Enabling the software to recognise and learn new forms for itself
Optimising recognition rates for extracted data.
Throughout this process weve been driven by what our clients want and were very fortunate to have had their
full involvement.
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CCH is a trading name of Wolters Kluwer (UK) Limited. Registered in England and Wales, No 450650. Registered Ofce: 145 London Road, Kingston upon Thames KT2 6SR, UK.
Wolters Kluwer (UK) Ltd is authorised and regulated by the Financial Services Authority for general insurance business.
Want to know more?
For more information about CCH Auto
or any of the other CCH products
and services:
Call: 0844 561 8181
Email: cchsoftware@wolterskluwer.co.uk
Visit: www.cch.co.uk/software