Today's Technology for Tomorrow's Firm.
Issue link: https://cpapracticeadvisor.epubxp.com/i/123770
Reviews For Your Firm TAX COMPLIANCE: TRADITIONAL WORKFLOW REVIEW SECTIONS CORE PRODUCT FUNCTIONS/ FEATURES • • • • Product depth/multi-state Navigation/ease-of-use Support for special situations Electronic fling PAPERLESS WORKFLOW • Paperless creation • Paperless open items • Access control for limiting access into returns • Digital document storage/mgmt. • Data import/export INTEGRATION • • • • W/in Publisher's own suite W/tax research tools & guidance W/other or external programs W/external services HELP/SUPPORT • • • • Online resource center Tech assistance availability Downloadable program updates Preferred SaaS route Brian Tankersley, CPA.CITP Technology Editor Brian Tankersley is a Knoxville, Tennessee CPA and consultant whose practice is focused on technology consulting and training for accountants. Brian is a nationally recognized speaker with K2 Enterprises (k2e.com), and blogs on accounting technology at CPATechBlog. com. Comments, suggestions, and errata are always welcome, and should be e-mailed to brian.tankersley@ CPAPracticeAdvisor.com. 16 Software that Meets the Core Needs of Tax-Focused Firms I n our May issue each year, we review tax preparation systems designed for professionals who prepare federal and state income tax returns for individuals, businesses and other entities. Tere is a signifcant diference between the types of professional preparation systems on the market, but diferences in capabilities are ofen intentional, as the sofware developers design their programs for use by diferent types of frms. Tat said, it wouldn't really be appropriate to compare a system designed for smaller, 1040-focused firms, to a system that might be used by top 100 tax and accounting practices with ofces and clients across the country. Terefore, we divide the tax systems into two categories based on how firms operate: Traditional Workfow and Advanced Workfow. Tis review section looks at those that we believe are designed for tax practices with a Traditional Workflow. Our review of Advanced Workfow systems is on page 12. For clarification, here is how we defne these categories: Traditional Workfow – Defned In frms with a "traditional workfow," nearly all of a tax engagement is handled by a single preparer, although there may be an administrative person at the front end (scanning, handling primary basic data entry, etc) and a manager/partner reviewing the return at the end of the engagement. Te primary preparer guides all client communication, information gathering, data input, and processing. Tis typically takes place in a single interview with the client, and is the most typical frm workfow method May 2013 • www.CPAPracticeAdvisor.com for high volume 1040 practices with anywhere from one to 10 or more staf. Advanced Workfow – Defned Firms with an "advanced workfow" ofen have clients that require several staf to work on a series of federal and state returns. Firms who use these applications typically have administrative personnel or paraprofessionals performing data entry and organizational tasks, and reserve professional staff for more technical tax issues associated with the return. These frms typically require all returns and supporting documents to be reviewed by at least one person at a level above the preparer. Advanced workfow tax systems support the simplest of 1040s through business entities with complex ownership structures, multi-state apportionment of income, oil and gas partnerships, cross-border or expatriate returns, or elections for special treatment of transactions. The Traditional Workflow tax preparation systems reviewed here meet the needs of a wide range of different preparers, from recently trained volunteers at an IRS VITA site all the way to large frms who do not need the overhead or complexity associated with the more advanced products. These applications are designed to meet the everyday needs of the practitioner without being designed to address every niche practice area at lower price point. While many readers may not want to even think about tax sofware afer the challenges many frms faced this tax season (which included sofware reliability issues, delayed e-file acceptance, and some state calculation issues), May is still the best time of the year to switch tax sofware. Sofware vendors are ready to make deals with deep discounts, and users have time to learn the sofware with extended returns over the summer before the crunch of the next winter busy season. Two popular packages included in last year 's rev iew, RedGear's TaxWorks and CCH Small Firm Services' ATX, declined to participate. Te tax application is only one part of the process of preparing a return, and users should consider many other features when purchasing the tax application. We reviewed Tax Document Automation systems in our January 2013 digital issue, which are being used successfully by many practitioners. We will review many of the Document Storage Systems which have integrations with tax applications later this year. Many applications have support for importing balances and securities trades from small business accounting software or Microsoft Excel spreadsheets. True web-based tax sofware has taken over the consumer-prepared return market (e.g. TurboTax, TaxAct, and others), but the full-time practitioner market is still using applications which are installed on a local computer. Although we believe that cloud-based tax applications will play a significant role in the future, the integrations in the current versions of these applications are still very limited. Many of the existing on-premises applications have plans to launch hosted or web-based versions of their sofware, and it is clear that there will be many innovations in this space over the next year. Once again, our reviews of Advanced Workfow systems begins on page 12 of this issue. ●