The introduction of Corporate Transparency Act (CTA) means 35 million U.S. companies will need to submit beneficial ownership reports to FinCEN beginning in January 2024, or risk a fine of up to $10,000. The reports contain mandatory details about each beneficial owner and applicant of every reporting company.
Although it is a hassle to the smallest U.S. businesses, it is an advantage for law firms and accounting firms that are working to support the filings. A majority of these firms are likely to seek help from accounting or law firms but assembling and filing the required information can be a lengthy 3 hour procedure for businesses.
Accounting and law firms have to go through the six steps that take a long time to submit a FinCEN report for a client.
1. The first step is to invest 30 minute to one hour teaching every client on this new legislation.
2. Attorneys or accountants will require the beneficial ownership information for their clientele. If they do not have streamlined software, it could be a lengthy process that can result in a multitude of inquiries from each client. It will take an additional thirty to an hour between sending PDFs, copying the information supplied, and answering any questions.
3. Staff at the company will need to get an ID card for each owner who is a beneficial one to be included in the FinCEN report using the secure file-sharing software.
4. Staff must transfer documents and other information into a file management software.
5. Firms will then have to spend time putting the report in FinCEN’s system. It could take 20 minutes if there is no software automation.
6. Finally, companies require equipment to handle volumes of thousands or hundreds of clients in order to cut down on keeping track of reports, emailing reminders and confirming filing. Without a software solution, this could consume an extra 30 minutes for each report.
Automation solutions are already being introduced to improve this process in the filing industry. FincenFetch is a prime illustration of Corporate Transparency Act filing software that is designed to streamline the above procedure and complete the entire 3 hour filing flow within 10 to 15 minutes.
Since Corporate Transparency Act filings are the only filing market that is flat-rate for accountants and attorneys it is essential to automate the process. If you don’t have streamlined processes the $600 filing revenues for an initial report would require three minutes of time from staff. This translates to a revenue in the range of 200 dollars per hour.
The increase in revenue per hour for the filing services industry will allow more companies to become compliant with the new regulations by attracting experts to process reports. The availability of software that can process up to six reports per hour means that junior employees working in an accounting or law firm could earn as much as $3,600 per hour to help clients in CTA compliance.
Furthermore the in addition, Corporate Transparency Act file platforms such as FincenFetch simplify the process of filing for customers changing a complicated filing that took 3 hours into an easy online experience that can be completed in just a few minutes. This creates goodwill and leads to recommendations for businesses using the simple CTA tool for filing.
Software companies have already formed partnerships with numerous firms throughout the U.S. With the estimated 35 million companies that must file reports priced at 600 dollars on average the 21 billion-dollar filing market requires specific CTA filing tools that can aid companies transition to the new requirements for compliance.