RSM is a global tax and audit firm specializing in assurance, tax and consulting services for middle market leaders. They’ve come a long way from their 1926 beginnings in Cedar Rapids, Iowa. The company has 57,000 employees in 120 countries who deliver “future-focused technology powered by human insights.”

RSM urges its clients to “experience the power of being understood,” a promise that the company’s employees will take the time to truly understand them, will bring tailored ideas and insight to their environment and will commit to helping them make confident decisions about their future.

Establishing standards in the “Wild West”

Cryptocurrency is everywhere. An estimated 400 million people and/or organizations around the world currently hold at least one crypto asset. But because of its obscure and sometimes hidden nature – transactions are tracked on a series of anonymous Blockchain registries – there is a common misconception that crypto assets are not liable for taxes.

Nothing could be further from the truth. In fact, tax authorities across the globe are stepping up enforcement efforts around crypto-derived income, placing a burden on individuals and organizations to track transactions and determine tax implications.

Companies who do tax prep have struggled to find an efficient way of analyzing the quickly rising number of cryptocurrency transactions. RSM found themselves in exactly that situation. Their team was taking, on average, two weeks to manually decode 200 transactions with an error rate that hovered around 50%. They knew they needed to find a better way.

“We take data from the blockchain, which is known for being messy, unstandardized, what some people call the Wild West,” says Zack Szykowny, Manager of the Center for Advanced Tax Technology at RSM. “There’s no set ways, just a lot of things that are undetermined.”

The variety of unique wallet addresses and the lack of standardization among the many blockchains created headaches, recalls Alula Zeryihun, Financial Services Tax Manager at RSM. “The manual aspect of the work usually involves people putting together Excel tables that reconcile transactions and activities.”

First off, we said, “How can we empower our people and free them up to do more value-added tasks for our clients instead of sitting there and copying and pasting data? How can we streamline that process?”

The team at RSM turned to Alteryx to help them streamline, decode and standardize all that complex blockchain data. “The question,” Zeryihun says, “was ‘How do you create a standard format so you can categorize all the activities in a manner in which you feel comfortable?’”

To improve RSM’s services to their clients and reduce their reliance on manual processes, Alteryx helped them look for reliable ways to automate. They knew automated analytics could radically reduce both the time and complexity of tracking and analyzing blockchain transactions.

Streamlining, Automating, and Saving Time

RSM began working with their team of tax experts to come up with proper categorizations for different types of activities. From there, they formatted and flowed data into a digital tracking app so they could generate all of the tax forms, reports and accompanying documents they needed. Here’s how they did it.

• RSM asked users to provide one of two types of input depending on their client and their specific needs. If they had a centralized exchange like Coinbase or any of the major US exchanges, they would provide a CSV with all the transactions for their clients. For non-centralized blockchains or wallets, where clients had activity on, they passed along a wallet address which was used to pull the complete transaction history from a blockchain node.
• Then they connected their RSM-built app to their Alteryx server, allowing them to kick off ETL processes designed for specific exchanges or wallets. The focus was on standardizing the data and getting it into a decoded format.
• Their output, a standard format with all the proper tax classifications, went straight into the RSM Digital Tracker app and they were able to pull from third-party valuation APIs and calculate the taxes from there.
  
  

All the manual processes that had slowed the team down were gone now, says Szykowny. “It was now feeding into the standard format we have within RSM Digital Tracker. The transformation we’re using Alteryx for is very intricate but then it feeds into standard format, which feeds into our RSM visual tracker. It ultimately produces, in real time, the capital gain loss on all those trades throughout their lifetime – and does it in three different tax methods – and then generates a report that attaches to the tax return.”

The Alteryx impact was profound, Zeryihun says. Tax reports and forms that used to take weeks to compile were now automatically generated and were far more accurate. “With Alteryx, we were able to create a workflow,” Zeryihun says. “Something that would have taken a couple hundred hours to do we are now able to do in less than 10. The end result is happy clients.”

Szykowny stresses the enormity of the time savings. “We’re talking about people downloading and going through 5,000 records at a time.”

Measuring Transformation with RSM + Alteryx

Alteryx helped RSM move from manual, time-consuming processes, to reliable automation that assists analysts in decoding crypto and blockchain transactions in a matter of minutes. This breakthrough not only made crypto taxation a breeze but held – and continues to hold – immense potential for broader applications beyond tax-related use cases.

The bigger opportunity here, according to Zeryihun, is in enabling standardization and efficiency across the blockchain ecosystem. Manual efforts and reconciliation that are done using traditional Microsoft solutions leave room for improvement. “A powerful software like Alteryx can enable people within this space to be more nimble,” Zeryihun says, “and to do more with less.”

Zeryihun concedes that, before his team could ever get off the ground automating, they had some convincing to do within RSM. “In the early stages of prototyping, Alteryx played a big part in helping us come up with quick workflows and solutions that we could show to people and say, ‘Here’s an example of a minimal viable product that we can put together.’”

Once they had people on board, they were able to democratize and expand their efforts by creating a digital tracker app with a simple front end. That way colleagues didn’t have to be Alteryx experts or even know how to use the tool to derive value from it. “Their day-to-day lives aren’t connected to Alteryx,” Zeryihun says. “But on the back end, we’re able to empower our people through the solutions that we built. That’s a very powerful thing.”

Since the team started working with Alteryx, they’ve gone far beyond their tax use case. “We’re talking to our audit teams, our consulting teams – people within our organizations that are servicing our clients – and we’re coming up with really unique ways of adding value,” Zeryihun says.

Szykowny points to how his team’s breakthroughs in standardizing complicated data have driven confidence and change within the organization. “Having that standardization can help applicability across all different lines of business. It’s one of the biggest challenges we have in anything that’s new, especially in automation. Just getting people comfortable with all that is a unique challenge but change management always is with any sort of automation. Alteryx helps people get to that level of comfort that makes them confident in the output.”