Tax Season 2010
Top 6 Tax Suites Solutions 2009
High-End Packages Now Standard
By Richard Buse
The holiday season comes and passes. For CPA firms large and small, income tax return preparation season then begins, with work volumes growing daily as April 15 draws closer. How will tax suite software perform this year?
Many functions and features found only in high-end packages earlier this decade are standard items now, making tax suites more robust than ever. E-filing and document management for storing scanned images of tax forms, for example, once were pricey options. Tax suites across all markets and price ranges now include these capabilities.
While technology keeps progressing, expectations and needs keep growing, too.
"The congressional trend of late on retroactive tax legislation has made tax software a vital component of any tax practice," says Kerri Carpenter, CPA, director, tax development, for Drake Software. "At Drake Software, we know our customers are relying on us to analyze, interpret and implement these late changes quickly and accurately. Agility is, therefore, a core focus of our development model."
Internet Integration
Thanks to the Internet's ability to quickly and inexpensively transmit data, workflows and specific tasks extend beyond physical offices and regular business hours. To this end, many Internet-related possibilities exist for accounting firms to improve efficiency.
"We are focused on creating end-to-end workflow solutions and leveraging the Web to increase workflow efficiency and staff utilization and mitigate security and compliance risks, all while driving down the total cost of technology ownership," says Scott Fleszar, senior director, strategic marketing, for Thomson Reuters.
UltraTax CS, Thomson Reuters' tax suite, offers online client organizers and portals, as well as integration with Checkpoint research resources. Other tax suite developers also provide Web-based research options.
Preparers work and file returns from various locations. To track such efforts, Drake Software's tax suite enables users to integrate tax return filing data from multiple offices into a single database via the Internet. TaxWise offers InterviewPlus, a Web-based service that allows preparers to enter a client's tax information from a remote site and then complete the tax return later.
Social media's value extends beyond posting updates and sharing photos: It allows coworkers or professionals across the country to share dilemmas, suggestions and to collaborate on work activities. With the Live Community feature in its ProLine Lacerte application, Inuit allows users to post questions and answers about various software functions.
The Internet makes it possible to reap the benefits of technology without undertaking the costs and concerns associated with purchasing and maintaining IT systems in-house. CCH is among software developers offering tax suites in desktop or software as a service (SaaS) mode. With CCH serving as host, SaaS users simply log on to a secure connection whenever they wish to use the ProSystem fx Tax suite.
Workflow Efficiencies
"To be efficient, tax professionals need software that is simple," Carpenter says. "Training is important, but ultimately, preparers want a product that is intuitive to use. Complex calculations, integration, e-file, paperless office, practice management — it doesn't matter what it is, we have the exciting challenge of taking the complex and making it simple. The best feedback I can get is to hear a customer say, 'I never had a need to call customer service.'"
ProLine Lacerte, ATX and other tax suites deploy interview modes for data entries, in which tax preparers and their clients respond to series of questions with entered answers flowing to the correct tax form lines. CCH incorporates optical character recognition (OCR) for its ProSystem fx and Small Firm Services Tax Suites, allowing preparers to automatically enter scanned information from W-2, 1099 and other source documents.
Auto-fill data entry capabilities eliminate the need to manually enter repetitive bits of information, and automated data transfers eliminate the need to re-enter information from one form to another.
For an accountant, various options arise when preparing a tax returns — options that have immediate effects as well as consequences for the following tax year. Drake Software's tax suite includes capabilities for compiling and saving multiple versions of a taxpayer's return. This allows the accountant to discuss various scenarios with the client and then proceed based on the client's instructions.
Diagnostic and review activities are crucial but time-consuming, so tax suite developers focus on making comprehensive examinations as efficient as possible.
IT Integration
The Internet can link multiple office locations. An accounting firm might handle functions beyond tax preparation for its business taxpayers. Within an accounting firm, accounting-specific applications co-exist with general business office applications. There's the need to enter client-supplied information, too, with a minimal amount of manual data entry work.
IT integration is a crucial concern. Drake Software allows clients to download Web-based report data in Access or Excel format. ProLine Lacerte features enhanced Excel data import capabilities, along with support for customers using Vista and Windows 7-based systems. A common database maintains information for all ProSystem fx applications. Tax suite developers also offer data conversion services so customers can import information from systems used previously.
High-End Now, Common Soon?
Introduction, acceptance and mass use of new technology tends to follow a pattern: It first shows up in large enterprise applications. Then, it appears in high-end or function-specific applications. From there, it becomes an optional feature in mid-level or entry-level applications before becoming a standard feature.
Tax preparation software seems to be following this pattern. Data mining once was deployed only for large-scale purposes. UltraTax CS from Thomson Reuters now offers data mining capabilities.
Senior-level executives of large companies were early users of dashboard reporting systems, which allowed them to view all key performance indicators (KPI) on one screen. UltraTax CS features dashboard reporting options, and Pro System fx offers custom home page options for users.
Will those items become common to all tax suites? That remains to be seen, but expect tax suites to lead tax prep in becoming more agile and efficient.