The enactment of Corporate Transparency Act (CTA) means 35 million U.S. companies will need to submit beneficial ownership information reports to FinCEN from January 2024 or be subject to fines of $10,000. These reports must contain details about each beneficial owner and the company applicants of each company that is a reporting entity.
While this can be a major burden on smaller U.S. businesses, it can be a blessing for law and accounting firms who are preparing for the filings. About 40% of these firms are likely to seek help from accounting or law firms however, preparing and filing the required data is a complicated three-hour process for businesses.
Accounting and law firms have to follow the six steps that take a long time to submit a FinCEN report for a client.
1. First, companies must invest 30 minutes to one hour informing every client on how to comply with the law.
2. Attorneys or accountants will have to gather the necessary ownership report for their clientele. Without the right software, this can be a long and tedious procedure that leads to a lot of inquiries from each client. This could take 30 minutes to an hour between sending PDFs, copying the information supplied, and responding to queries.
3. Staff at the company must obtain an ID card for each owner who is a beneficial one to be included in the FinCEN report through 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 in putting their report in FinCEN’s system. This could take up to 20 minutes with no software automation.
6. Additionally, businesses require equipment to manage the volumes of thousands or hundreds of customers to reduce time managing reports, sending reminders via email or providing proof of filing. Without the right software, this could consume an extra 30 minutes for each report.
Automation solutions are already being introduced to improve the filing industry. FincenFetch is a prime illustration of Corporate Transparency Act filing software that is designed to streamline the process described above and finish the entire three-hour filing process in between 10 and 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 there aren’t streamlined processes in place filing revenue of $600 for a first report would require three hours of time from staff and generates revenues that are $200/hour.
A rise in the hourly revenue to the filing services industry can help more companies in the filing services sector become compliant with the new rules by attracting professionals to handle reports. The availability of software that can process up to six reports an hour, junior staff in a accounting or law firm could earn up to $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 as well by transforming a complex filing process that takes 3 hours to an easy online experience completed within minutes. This creates goodwill and leads to referrals for companies using simple CTA tool for filing.
Software providers have already signed agreements with numerous companies throughout the U.S. With around 35 million businesses that must file reports priced at a median of 600 dollars the 21 billion dollar market for filing requires custom CTA filing tools that can aid companies transition to the new requirements for compliance.