Case Study With ba group – Tax Consultants in the Digital Age

This case study and interview with tax consultant Fabian Wüllenweber from the ba group deals with the usage of Circula and digitalization in general.

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The ba group is a modern and internationally operating auditing company with 8 locations in Germany. At their locations in Hamburg, Berlin and Rostock their teams are focused on issues related to tax consulting and accounting, and specialized in assisting innovative and digital companies. This helps companies develop sustainable, digital solutions regarding tax and auditing matters, and relieve and advance clients operations in these areas.

Digital Pioneer: ba group

In an interview with Circula, Fabian Wüllenweber, a tax consultant with the ba group, confirmed what an important role digitalized work processes play for every company today. According to the ba group, however, there are accounting processes that are difficult to digitize. Cash transactions and reimbursement of expenses are time consuming processes which, in accounting, have to go together in a meaningful way.

"When first, someone has to stand at the copier and glue every little receipt onto a DINA4 sheet of paper in order to scan it, then file it somewhere and then upload it, it's simply a tremendous amount of time", explains Fabian Wüllenweber.

Already a pioneer in digital process optimization, the ba tax GmbH implemented Circula at the turn of the year 2018/2019 in order to digitalize a significant part of its accounting. Since the introduction of Circula, the company's accounting has changed considerably. Previously an Excel-based travel expense report was used and the additional expenses for meals had to be calculated manually. Now all 60 employees of the German subsidiaries submit their travel expense reimbursement or other expenses via Circula app. With the help of the interface to DATEV Unternehmen Online, numerous work steps are saved. This significantly reduces the financial accounting staff's workload in expense and travel expense management. At the ba group, DATEV was already used for internal accounting before the introduction of Circula, but before that, according to the company, receipts had to be scanned manually and filed for storage. According to Fabian Wüllenweber, the employees responsible for travel expenses are happy that no more invoices need to be scanned and also no more signature folders have to be passed around - even the release of submitted costs and subsequent transfer is now digital and collected via Circula. "For us, Circula has streamlined and simplified the entire process of travel expense accounting," says Fabian Wüllenweber.

"In the age of digitalization, it is important to have digital and simple processes within the company, and this includes reducing the amount of paper that are in circulation".

Fabian Wüllenweber also mentioned in the interview that he already recommended Circula to clients. "Also from the clients' point of view, everyone was very satisfied with Circula and also grateful that the good old Excel table is finally out of use, which, if you want to admit it, is just a struggle for all involved."

Digitization 2020

Where many companies are struggling with the conversion of old, familiar processes, the ba group found it much easier to digitize and optimize processes within the company. Due to a strong focus and numerous clients from digital business areas, the ba group is open to digitization, which made the transformation to a paperless office much easier.

For companies, such as a tax consulting and auditing firm, the legal conformity of all processes is particularly important. Circula was developed in cooperation with law firms for German companies and thus offers GoBD-compliant processing in accordance with IDW PS 880. This means that receipts and records must be stored in digital form with the help of Circula, rather than in paper form as was previously the case. This not only saves time, but also office space, which can be used for better in the future. Especially in a crisis-ridden year like 2020, it is advantageous to have had an awarness of digital transformation and already implemented digital tools before the Corona crisis. Especially in Germany, not every company, has this foresight. The numerous changes this year, and suddenly having to work in the home office, was a great challenge for many companies and employees. For medium-sized companies, which previously had no contact with the digitalization of internal work processes, the changeover is proving difficult. The ba group is different, here every employee has had a company cell phone and a laptop for a long time. Thanks to the digital working method and the flexible home office regulations it is possible for their employees to work from everywhere where there is electricity and internet. Since the first lockdown in March at the latest, every employee now has a fully equipped home office workstation with two screens.

In the interview with Circula, Fabian Wüllenweber says "for companies that were prepared or that already worked digitally, it was easy and not a big change. Everyone had a laptop, a fully equipped home office workstation and a company cell phone and could continue working from home".

Home Office 2020

The home office not only has an impact on internal processes, for employees, tax issues suddenly arise on which no final decision has yet been made. Changes in the law, which are to grant employees tax relief in the home office, have not yet been finally passed by the federal government. Tax consultant Fabian Wüllenweber explains that the current legal situation to make a home office workplace tax deductible is linked to several conditions.

The study must be a separate room that is used almost exclusively for professional purposes. If this study is the center of all professional activity, the entire costs for the study are tax deductible. Up to a maximum amount of 1.250€ per year, the costs are deductible if the employee does not have a reasonable workplace in the company. However, if the employee has another workplace available in the company, or if it is only a work corner in the living room, he or she has no right to deduct income-related expenses from taxes.

"In my view, it would be appropriate to introduce relief regulations or the much-discussed home office flat-rate fee to relieve employees of the additional burdens of the Corona crisis," says tax consultant Fabian Wüllenweber.

Germany's Digitization Index After the Crisis

In order to remain competitive in the future, companies in all industries must adapt to the new situation. But this forced development has positive sides. It can be assumed that the degree of digitization of German SMEs will increase significantly as a result of the Corona crisis. German SMEs have a clear need to catch up, with an estimated digitization index of 50 percent. The ba group places itself well above this 50 percent, as many internal processes have already been digitized. The added value that a digitized company brings with it extends far beyond the Corona crisis. However, the biggest advantage of a digitized workplace is a clear time saving.

"When working with digital tools such as Circula, another advantage is that all receipts must be complete at the time of export, before which the trip will not be released. You don't have to approach the client three more times, that's simply a time factor," explains Fabian Wüllenweber.

The ba group's Recommendations

Regarding important recommendations for companies, tax consultant Wüllenweber reminds companies, when billing travel expenses to make sure that the billing address on hotel invoices is in the company's name so that input tax can be deducted on hotel expenses. It's also important to take advantage of the highest wage taxes available, i.e. traveling employees that are on the road for over 8 hours get additional meal allowances, which the employer can reimburse without having to pay taxes on them. So it's useful to be aware of these different wage taxation rules when reimbursing employees for their expenses without additional taxes, all the while the employers save the extra administrative costs and expenses.

Tax Year 2020

Finally, the ba group gives an interesting insight into what to look out for in the tax year 2020. As a result of the Annual Tax Act 2019, which applies to the tax year 2020, there were some changes that should be considered. On the one hand the adjustment of the additional expenses for meals from previously 12€ to now 14€ and from 24€ to now 28€ has to be mentioned. On the other hand, there were some changes and tax advantages to the 1% rule in the area of electromobility. In addition, new tax exemption regulations have been introduced, making it possible to provide employees with a tax-free job ticket, for example. Finally, it should be mentioned that employees can be given company bicycles tax-free. This is a wonderful opportunity to make your employees happy.

We would like to thank Fabian Wüllenweber for the very nice and open conversation. We are very pleased to be able to accompany you and your colleagues on the path of digital change. Happy submitting!

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