Building a Solid Practice


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Practice management software provides a foundation

By Wayne Schulz

The solid foundation of any CPA firm rests squarely on the shoulders of management. And in order to properly manage and react to change, you need a great software system that captures, reports, and empowers users to react quickly to what is often a fast-paced and ever-changing marketplace.

Partner Insights

Most packages began their lives as simple time and billing software and gradually evolved into completely integrated practice management systems. Capturing not only the daily time activities of all staff members, they also often tie into marketing databases, due-date monitoring, scheduling, and customer relationship management.

Key features found in the most popular systems include the following:

Time and billing. Today’s systems are almost universally strong in the capturing and reporting of time. You’ll want to make sure that your system allows for flexible invoice formats because there are nearly as many variations to an invoice format as there are clients. Make sure all types of billing arrangements are supported, including fixed-fee and not-to-exceed arrangements. Most important is the ability to report on the profit or loss of each individual engagement, as that is the only way to improve your future service offerings.

Scheduling and shared calendars. Each firm needs to efficiently manage its staffing to make certain the amount of non-productive time is kept to the absolute minimum. The most popular calendar in use is Microsoft Outlook, so some integration to Outlook is essential. There should be a way for all calendars in an office to be pooled and viewed so that scheduling gaps can quickly be found and resources directed to more efficient (billable) uses.

Marketing. Maintaining a common mailing list is one of the most powerful—and often underestimated—features of any program. The less you have to re-key data, the better the odds are that you’ll create a master list of prospective clients that you can use to proactively mail your firm’s newsletter. The better systems will eventually include the ability to not only capture email addresses but perhaps generate the electronic HTML newsletters as well.

Custom report writer. No matter how good the package, there’s always room for improvement in reporting. At a minimum, your selected software should support a common file format, such as SQL, Access, or dBase. Often, an ODBC connection is the best transfer method, since you then can make use of the common reporting tools such as Crystal Report Writer to analyze and further dissect data.When financial data is tracked, you’ll want the ability to extract the information to Excel. When you look at the extraction procedure, take careful note whether the information comes out formatted for Excel or requires manual intervention to parse values into the individual cells.

CPE tracking.  Every state requires licensed CPAs to obtain minimum levels of continuing professional education. Each member of the firm should be able to receive a detailed listing of CPE sessions attended including critical reports flagging excess or deficiencies in any specialized areas. If you have special education requirements determined by additional certification, then the more flexible the CPE tracking, the better. 

Remote access. Getting at your data anytime from anyplace is no longer a neat feature. It’s a requirement. Since the Internet is the de facto transmission method of choice, you’ll want to be certain that the software has the capability to securely connect from any Internet-connected PC. The fewer configurations that are required on the remote end the better. Having to manually configure dozens of home computers to access your office server will quickly negate any cost savings from this feature.

Due-date tracking. By definition, the accounting profession is driven by deadlines. Managing all these deadlines is made simple by the use of due-date tracking. You’ll want both one-time and recurring tasks to be easily accessible within your tracking system. Make sure the reporting is flexible enough that you can create your own tailored reports for the clients that have more than a few time-sensitive tasks.

Project or engagement tracking. Budgets can be easy to set and sometimes difficult to track. If you use a system where the budgeting is integrated with time entry, you’ll find that the process flows smoother than entering and tracking time on a separate MS Project file or Excel spreadsheet. Make the use of budgets mandatory on every engagement and the software will let you know (like true practice management should) when staff exceeds projected hours.

Accounts receivable. Once the bills have gone out, the fun often begins. All practice management software should allow for tracking of detailed invoice information versus only a balance-forward amount. Though clients never pay them, the ability to add finance charges will be a plus for targeting the chronically delinquent.With the above in mind, consider reviewing any (or all) of the seven practice management solutions presented below. Remember, many of them have different modules that may be available separately so that you only pay for exactly what you need. In addition, some of the companies offer lower cost systems with pared-back capabilities.

CCH ProSystem fx Practice
Many firms are familiar with the ProSystem fx Tax software. The use of ProSystem fx Practice Management software is a logical extension, since it will use the already significant amount of data built up within the tax processing forms and client database.

In addition to the standard time and billing features you’d expect from a robust practice management system, Practice allows for contact management, project tracking, and easy Internet access for the purposes of remote timekeeping. The software uses the Advantage Database Server, which is optimized for speed on multiple platforms, as well as for performance over the Internet.

Data entered into the tax software doesn’t have to be re-keyed in order to update billing records. Time spent on a tax project can instantly update the budget vs. actual statistics. Upon completion of the tax return, an invoice can automatically be generated from within Practice. The system will also generate a large number of tracking reports that can be used to make certain no client’s tax filings are overlooked.

An upcoming enhancement release promises to further strengthen the ability to track budget and actual time by adding the capability for the Project Management module to access a list of the forms used within the tax processing system. Users will be able to add their own filing due dates to each form, as well as track which forms have been extended. Full reporting by responsible staff members will make the tedious due-date tracking process a bit more manageable. In addition, future releases will allow Microsoft Outlook as one of the data-entry interfaces.

Firms using ProSystem fx Tax should look closely at Practice. The ability to share common data is an overwhelming advantage of this system.

CPAPractice Manager
CPAPractice Manager (previously known as Visual Practice Manager) offers time tracking, contact management, billing, and project management, all in one easy-to-use and fully integrated system. Based upon the popular Microsoft SQL database, reporting is both fast and flexible.

Keeping track of your clients and contacts is simplified by the ability to synchronize data with your Microsoft Outlook address book. This feature allows you not only to fully utilize the features of Outlook, but it can also act as a conduit through which you can synchronize your PDA and other Outlook-aware software packages. The contact management portion of Practice Manager allows for easy lookup and research of outstanding work-in-process and accounts receivable balances. There are an unlimited number of user-defined fields that can be added to the contact database for even more flexibility. Invoices are created on a WYSIWYG screen where you can tailor the terminology, layout, and graphics to meet firm billing standards. The flexibility to include as much detail as the client requires will be a great help in quickly collecting on outstanding invoices. Throughout the billing process, the project tracking component of the software is constantly analyzing the anticipated hours and allows for the easy creation of reports to show each engagement’s progress.

During the entry of time, employees have access to a graphical calendar summarizing hours worked. This screen also displays the budget hours for the designated period of time, so employees are always aware of their productivity goals and efforts toward achieving them.

Firms of any size will find a lot to like within Practice Manager. The use of the popular SQL database structure assures not only an industry-standard data foundation, but also virtually guarantees speedy access to your firm’s data.

Time Matters
Time Matters offers versions of software specifically tailored to the legal profession, general business, and accounting markets. Each is available in a standard database format or with the Microsoft SQL 7 database in a professional version geared toward firms needing even more reporting and computing horsepower.

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