Tax Software Preview 2004: In Unity, Strength


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Integrated tax and accounting suites are gaining momentum.

By Carly Lombardo

As the tax preparation software market keeps getting smaller, vendors are turning toward integration to improve their chances for attracting and keeping customers. The trend toward integration of tax preparation packages with applications such as accounting, payroll, write-up, financial planning, and document management is unmistakable— and unstoppable.

Partner Insights

“Tightly integrated workflow gives firms profitable engagements,” says Ernest Zoumot, director of software products for CCH. Stuart Lisk, Orrtax’s product manager, says customers are looking for one-stop shopping. “They’re not going to want vendors who do not have multiple solutions,” says Lisk.

The pace on integration is picking up. Next month, CCH is introducing a write-up product that will integrate with ProSystem fx Tax. Torrance, Calif.-based CCH finds “the key with integration is eliminating redundancy and data entry,” says Zoumot.

Users will be able to import data to establish companies, customers, and vendors, and have the control to sort columns and enter data as they want to. There will also be data mining, financial wizards, live payroll, and after-the-fact payroll. Accounts Receivable and Payable will be available in future releases. Pricing is not yet finalized. One reason for coming out with a write-up package is that many of CCH’s tax customers were using competing products, notes Sue Torgerson, CCH Tax & Accounting segment manager.

Meanwhile, CCH’s chief competitor, Thomson’s RIA operations, will increase the integration between its Checkpoint research system and the Creative Solutions’ UltraTax software.

Integration with UltraTax and Checkpoint with Line Finder is scheduled for the next tax season. Last season, users were able to open Checkpoint within UltraTax, but navigation was more difficult. Line Finder will detect a user’s location within the tax return and then direct the user to the appropriate area within Checkpoint.

ATX and Drake Software are also marching forward on the integration front. This year, Caribou, Maine-based ATX has begun offering business-user versions of its Total Accounting Office called Total Command and Cash Command.

“We’re providing a mirror version of TAO actually tailored for accountants so it enhances their tax and write-up services,” says David Olsen, director, product and business development.

Total Command’s financial modules include general ledger, AR, AP, payroll, cash management, CRM, document management, and the BusinessSmarts analytics component. Both Total Command and Cash Command were developed through an alliance with AccTrak 21.

Total Command is geared toward single users, small businesses, and middle-market enterprises. Cash Command, designed for small business, has tools to help the small businessperson keep daily receipts and disbursement transactions running. They can organize and manage their daily finances while keeping records up to date. The product is similar to Creative Solutions’ CheckBook Solution software.

“It gives accountants a simple checks-and-balances program that they can provide to their clients that will simplify their monthly data migration process,” says Olsen. “Upon importing data into TAO, the accountant can generate analysis reports giving them more advanced CFO capabilities.” Cash Command is $200 for a single user, $300 for multi user. Total Command starts at $2,000 for up to three users.

Franklin, N.C.-based Drake Software is also integrating its write-up package with the company’s tax software. The write-up application will feed the 1040 and Drake’s 1041, 1065, 1120, and 1120S packages automatically from the year-end trial balance. It includes payroll calculation and check writing that integrates with the general ledger, and also has after-the-fact payroll. Quarterly reports include Forms 941, 940EX, and all state wage and earning reports, and the program covers multi-state wages for employees.

Included with the software are templates for C corporations, S corporations, partnerships and sole proprietorships, and all reports can be printed to a PDF file and saved on the hard drive for later printing or for emailing reports to clients. It costs $240 per year for Drake Software users, and $595 for new users who want the whole package.

CCH, Best Ally
One of the more interesting integration plans was developed by Best Software’s CPASoftware division and CCH Tax and Accounting, who agreed to develop complementary products and services for each other’s customers.

As a first step, the companies have announced integration between Best’s CPAPracticeManager and ProSystem fx Tax. CPASoftware will no longer develop its Visual Tax product (briefly known as CPATax Manager), and will instead offer customers integration with ProSystem fx Tax. Existing CPASoftware tax customers will have access to free conversion services, and Web-based training so that they can get up and running.

 “At our customer conference we got great feedback. For our tax customers, they’re pleased we didn’t leave them on their own and arranged for them to work with ProSystem fx Tax,” says Ray Jimison, general manager for CPASoftware.

The integration between the software will be similar to the integration that already exists between ProSystem fx Tax and ProSystem fx Practice, CCH’s practice management system. The integration offers several benefits for preparers, including:

Client Information Link. The system links client name, number, and address data between the two products, eliminating the need for re-keying data and allowing users to keep their client changes in sync, whether the update is made in the tax or practice management software.

Invoice Link. Using ProSystem fx Tax, users can create invoices and electronically update CPAPractice Manager’s invoicing and AR systems.

Project Tracking List. Users can update CPASoftware’s Project Management tracking system while working on tax returns in ProSystem fx Tax.

Making Tax Time Easier
Over the last two years, many vendors have also tried to reduce the amount of paper generated by the return process.

“Our preparers are increasingly asking for more tools as they move toward a paperless environment. Basically, they want to be more efficient internally and with their clients,” says Jorge Olavarrieta, senior product manager for Lacerte Software.

Plano, Texas-based Lacerte will streamline the process of printing returns from Lacerte Tax to its Document Management System, making it a one-step process to print one return copy to the printer and another to DMS simultaneously. Lacerte is also considering allowing users to print input sheets, e-file acceptance letters, diagnostics, and other database reports to DMS.

Gregg Gillaspy of Gillaspy & Abbott, whose firm completes four hundred 1040 and a hundred business returns, says that DMS has cut down the amount of paper that he has to tote.

“I no longer take a boatload of tax files home with me during tax season. I remember years when I was making two trips a day to my car carrying files to work,” says Gillaspy, whose firm is based in Columbia, Miss. The firm now scans incoming client information, and prepares and checks the returns electronically.

“With DMS, I’m trying to hasten the day when we fire up for tax season and set in motion the complete preparation of a client’s tax return,” says Gillaspy. “We will start with the pro forma from the last year’s Lacerte program, move to the organizer, to client information coming in the door, to the preparation, to the checking, to asking the client questions, to completing the return, to printing it, to assembling it, to signing it, to calling the client to tell them it’s ready, to getting it out the door. The point is, that will be set in motion and happen with almost no human involvement.”

While Web-based products continue to be available, the only announcement of note in this area came from RIA, which is dealing with security issues by launchingGoSystem Tax RS to Go.

An add-on module to the Web-based GoSystem RS, GoSystem Tax RS to Go allows preparers to work at their client sites without an Internet connection.

“With individuals’ and businesses’ increased awareness of security, those taxpayers and entities are reluctant to grant tax preparers access to the Internet through their client network,” says Boyd Gackle, product marketing manager. “To meet this need for our clients, we allow returns to be copied to a local installation of GoSystem Tax and the returns may be computed, printed, and then uploaded back into GoSystem Tax RS.”

CCH’s Zoumot noted that Global fx, which provides Web-based access to ProSystem fx Tax, has about 2,000 users. The company expects to add another 1,000 by tax season.

Basic Count
Although integration is the buzzword, preparers still want more basic enhancements as well. Vendors are providing an array of new products, features, and services for the upcoming tax season.

Here’s what they’re planning:
CCH. CCH will provide efiling of Form 990 this season. Practitioners can also notify their clients via email of the status of their efiled returns.

Reviewer tools will eliminate the need for reviewers to print returns. Furthermore, tick marks, more than 20 new federal and 60 new state forms, and the ability to transfer data from the GLs into the tax package to populate the schedule F, will be available.

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