Rob Carmines thinks that the Web version of Creative Solutons' File Cabinet is a fine program. But he doesn't plan to use it soon. "The Web version is great and I'm comfortable with their security," says Carmines, managing partner of Carmines Robbins & Co., a CPA firm based in Newport News, Va.
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The problem is that all of Carmines' programs aren't Web-based. "If we still have to keep a local server, it's almost double the cost," he says. "If I couldn't get rid of my local network, and I'd still incur the cost of keeping a server and the maintenance, it didn't make sense."
There lies one of the problems with the Web. Some firms still see practical barriers, no matter how great the benefits they find with Internet-based applications.
Document management has been hot. The Internet is getting hotter. But as more CPA firms go paperless and the ASP model gains ground, how quickly are the two trends converging?
Mize Houser: Do-It-Yourself Goes Commercial|
In 2004, Topeka, Kan.-based Mize, Houser & Co. went in search of a new document management system. It ended up collaborating with RJS Software to develop a version of the latter's Web-based document management and workflow application for CPA firms.
Launched in May 2005, WebDocs CPA, is hosted by Mize Houser, which stores user document images at its data management facility.
The $16 million, 16-partner CPA firm chose WebDocs for internal use when the desktop product it was using was repriced, says vice president Terry J. Kimes, CPA, CITP. Mize Houser, an IBM business partner at the time, used IBM's Content Manager, in two of its offices and consulted on the product for its three clients.
The firm was pleased with the functionality of the IBM product. But when IBM repriced it early in 2004, Mize Houser started looking for something less expensive."
Mize Houser looked at about 20 vendors. "We were really impressed by RJS's product," says Kimes. "We liked the ease of use of their Web-based product compared to other products we looked at."
Kimes says converting its two tax offices was "smooth." RJS worked with the CPA firm to keep its existing folder structure and also converted Content Manager files to WebDocs. Mize Houser has run the product in four of its tax departments since the fall of 2005 and planned to implement it in its last office in March. RJS also converted its three Mize Houser clients, who were already using the hosted practice management system marketed by the CPA firm.
The application has portal capabilities to allow clients to access their files and upload their tax information. WebDocs also uses a cache replication server that enables CPAs to access local copies of their most-used files, says Bill Whalen, a sales and marketing executive at RJS.
Base pricing for 20 users and 10GB of storage costs about $700 a month.
Though he declined to say exactly how much the switch saved the firm, Kimes says Mize Houser saw an "immediate ROI."
"Our one time-licensing fee plus the annual maintenance is less than one year's maintenance fees on the other product," says Kimes. "Our tax department says it's saving us tons of time and letting us better service our clients."
"There are plusses and minuses for both [hosted and desktop], based on what a firm wants and what their experiences have been," says Stuart Gill, product manager for CCH's ProSystem fx Document.
CCH, which got into the desktop market two years ago, will unveil an ASP version of its ProSystem fx Document in the fall.
"Our main goal for the ASP is that it must have the functionality of the desktop application," Gill says. At press time, the cost structure for the ASP version wasn't set. ProSystem fx Document costs $1,825 for the first user and $475 for additional users. Training and consulting costs vary by the size of the firm. Renewals are 45 percent of the list price.
There is another goal-a product whose price is more in the range of smaller firms. The desktop version has not only been pricy for that market, but it requires consulting services for its installation.
"Our core market has been large CPA firms with 20 professionals and above," says Gill, who adds Document has about 200 CPA firm users. But he says CCH will market the ASP version to smaller firms that "don't have the IT professionals or expertise that larger firms do."
Another problem for Web fans has been that until recently, there were a small number of Web-based document management packages from which to choose. These included GoFileRoom, which was acquired by the Thomson Corp., last year, and which is now being marketed by Thomson's Creative Solutions unit.
But more are hitting the market. In fact, Joe Harpaz, vice president of business development for GoFileRoom maker Immediatech Corp. expects the use of hosted solutions to explode.
"Pretty much all software for mid-market companies, which would include all CPA firms outside of the Big Four, will move to a Web-hosted model," says Harpaz.
The Reznick Group, headquartered in Bethesda, Md., turned to Web-based document management as part of an overall strategy to move to hosted operations.
"We want to try to push out to Web as much as we can, and as much as is strategically advisable," says Constantine Kazakos, chief information officer at the $108.24 million firm. Since Reznick already used a hosted tax program, when the firm shopped for a document management system, it wanted a Web-based application.
Reznick implemented GoFileRoom in one of its seven offices in November and was running a paperless environment for tax and audit projects by February. Kazakos estimates implementation cost about $500 per employee, including training and the purchase of dual monitors. He says the firm is happy with the results, which have included gains in productivity.
"It's a more structured, organized environment," he says. "All of your documents are right at your fingertips. You don't have to go to the file room, you don't make copies, you don't take folders with you when you go see a client."
"Within a month or two of implementing, we started seeing positive results," says Kazakos, who says productivity on billable hours increased year-over-year. Three more Reznick offices were scheduled to start using GFR this month, followed by the last three offices in September.
Another new entrant vying for a piece of the CPA firm market is HyperOffice, which combines document management with other online services for organizations with up to 500 employees.
HyperOffice was launched in 1998 as a free set of online tools by a company called WebOS that went bankrupt during the dot-com bust. It was revived in 2004 by a group of entrepreneurs.
HyperOffice's Document Management system includes portal customization to allow client access to documents, online commenting, over-write protection, and version control.
The company also offers a virtual drive, called HyperDrive, accessible from the desktop that "feels and acts like a local drive" with the ability to drag-and-drop folders rather than uploading or downloading, says president Farzin Arsanjani.
The HyperOffice suite also includes an intranet system; Web-based email with remote access and Outlook synchronization; contact management capabilities; an online calendar, and a task manager.
Arsanjani says the base price, which includes 100MB of disk space, averages $7 per user per month, but varies based on the number of users. Storage for more than 100MB costs $3 per user per month for each additional 100MB. The company plans to roll out HyperShare for Outlook, which will allow Outlook users to share documents, calendars, and notes with other Outlook users without the need for Microsoft Exchange.
However, software makers and CPA users say so far, the move to "paperless" has been more of an evolution than a revolution.
That's because regardless of whether they choose a Web-based or desktop solution, going paperless requires a change in thinking, says Jeff Bak, vice president of global sales for Experient Technologies, maker of OneView CPA, an Internet-based practice management application that includes a document management module.
"The workflow is handled differently," says Bak. "Paperless changes the way people do business. But a lot of people like the way they do things."
Internet-based systems are winning over some CPAs for their ease of use-there's no need to fuss with software or servers or worry about when files can be accessed.
Some firms may be able to reduce their IT expenditures with hosted systems, since they eliminate the need to maintain software and don't require any additional investment in file storage or ongoing server maintenance.
"It's not difficult for small and medium-sized firm to see huge savings," says Bak. "Some firms can see a return on investment in three or four months."