Tax on Tap


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When asked what is a key concern for the upcoming tax season, Glenn Hanner of CPA firm Hanner & Associates summed it up with one word: staffing. "Staffing is always our issue. 2006 was our best year both in revenue and profits, but it took its toll physically," explains Hanner, whose Bedford, Texas-based firm employs 15 associates. "We could easily do 20 percent more in revenue if we could find the staff."

Unfortunately, Hanner's story is all too common.

In a challenging marketplace marred by a continued strain on staffing resources and further industry consolidation, many software vendors are focusing on enhanced integration and a streamlined workflow, not to mention bolstered support services, for the upcoming tax season in an effort to help alleviate some of the pressures facing today's tax professionals.

Partner Insights

"We are going to see increased pressure to provide a streamlined workflow [and] increase pressure on staffing just refuses to go away," says Teresa Mackintosh, vice president of strategic marketing for Thomson Tax & Accounting Professional Software & Services.

With most of the surviving tax software vendors having crammed their packages full of forms, the emphasis is increasingly turning to productivity tools.

Jeff Gramlich, president of CCH Small Firm Services, which is comprised of the ATX and TaxWise operations, adds that the entrances/exits on the seasonal side of the business also creates a need for streamlined training and software implementation, not to mention the fact that the young, tech savvy tax professionals entering the industry are placing a higher demand on technology and support.

"The younger folks coming in have a different interaction with the software than the older generation. They have no fear of technology," says Gramlich. "Support has to be streamlined and intelligent. They want an answer very fast. This generation is more confident interacting with software."

It is a fact that companies would be wise not to ignore. According to the AICPA, in the next 15 years, 75 percent of the AICPA's current membership will approach retirement age, indicative of a change in not only the profession, but also the nation's demographics.

Recognizing such trends and the client needs that accompany them, several companies, such as Thomson Tax & Accounting's GoSystem Tax RS, are taking the necessary steps.

"We are looking for ways to streamline the clients' input so it is not so key intensive," says Boyd Gackle, product manager for GoSystem Tax RS.

Also, like most, if not all, software companies, GoSystem will be supporting Windows Vista.

Gackle says the company continues to work on and rollout its Web Services, which was rolled out on a limited basis for 2006. This takes routine transactions and automates them, so if a user wants to import or export data into or out of the system they can do so with the push of a button. For example, Web Services can import data from a K-1 with limited work, eliminating the need to re-key the data.

"We are working with our clients' other software so they don't have to re-key data," says Gackle.

Later this year, the company will be offering e-file aggregation for international tax forms from other vendors.

"Our focus is how can we help our clients, through these Web Services and streamlined processes, streamline their processes," says Gackle, who notes that the price, which starts at $2,500, is expected to stay the same for the upcoming season.

In April, Thomson Tax & Accounting announced a new branding strategy that further links the company's three customer-aligned business organizations: Research & Guidance, Corporate Software & Services and Professional Software & Services.

"Under the new structure, the product brands that our customers rely on will be further strengthened under the new strategy through increasing integration with other workflow tools that only Thomson Tax & Accounting provides," stated Adam Schair, vice president of branding for Thomson Tax & Accounting, in announcing the branding strategy.

As a result, the Creative Solutions name has been dropped and is now known as UltraTax CS by Thomson Tax & Accounting.

With regard to UltraTax CS, Mackintosh says that a key focus for the season will be streamlining workflow. For example, users will be able to scan in hard copies of documents and turn them into a book-marked PDF that will automatically file into FileCabinet CS. A fair amount of the data will input into UltraTax CS, which can then be reviewed and accepted by the professional.

Mackintosh also says the company is seeing a large movement to the Web as firms increasingly recognize that being able to access the software via the Internet from any location through its Virtual Office CS can reduce hardware costs and upgrade expenses. Having the data housed on Thomson Tax & Accounting's server also can ensure business continuance in the event of a natural disaster, fire or theft. She notes that each year the company is experiencing a minimum of a 50 percent increase in usage.

Hanner, an UltraTax CS user since the 2002 filing season, implemented Practice CS in January and now has all of the Thomson Tax & Accounting products running in his office. "The integration and data sharing among all of the products makes us more productive and, in the end, more profitable," says Hanner.

However, Hanner notes that some of the features he would like to see implemented include simplifying the client selection screen and having a default print selection screen. "When you make a change for an exception, you have to set them up again because [UltraTax remembers the last print options]," says Hanner.

According to Jo Ann Cummings, product manager for ProSystem fx Tax, the company is adding optical character recognition (OCR) to its ProSystem fx Scan so it can read the characters and what type of form it is and import data into the tax application. This is designed to eliminate the re-keying of data.

In addition, the company is adding the ability to e-file amended or superceding returns, and the ability to batch e-file state extensions.

ProSystem fx Tax user E. Martin Davidoff, CPA, Esq., founder of Dayton, N.J.-based E. Martin Davidoff & Associates, says what he finds especially beneficial are the estimated reminders, which he sends to his clients each quarter.

"These are ways to show clients we care even when it isn't tax season," says Davidoff.

Davidoff adds that he would like to have the ability to rollover customized cover letters year to year; a function he says is available for default returns, but not yet for cover letters.


A key focus for TaxWise and ATX, which CCH acquired in October and August, respectively, is the new Scan & Fill, priced at $795. The product enables users to scan in such documents as W2s and 1099s. The scanned documents can then be exported to TaxWise or ATX, paving the way to a paperless office.

When asked what is driving the industry, Gene Goldenberg, vice president of marketing and product strategy for CCH's Small Firm Services, was quick to say automation, a paperless office and the integration of applications.

Goldenberg adds that for the upcoming season, TaxWise prices are expected to remain the same. For ATX, it is eliminating free e-filing for the basic 1040 product priced at $390. E-filing will now cost $3 for a federal form and $2 for a state form.

"We think we are still competitive on the price front," says Goldenberg. "We know that in the small firm space there is incredible price sensitivity."

However, CCH is not simply introducing modules from its higher-end ProSystem fx for the ATX and TaxWise products. Gramlich says the company has implemented "a document manager that is more tuned for th is space," is developing its own fixed asset product and will adapt Scan for the two lower-priced product lines.

According to Jorge Olavarrieta, group product manager for Intuit's Lacerte, a key focus for Lacerte, as well as ProSeries, is ease of use and enhanced workflow, as evidenced by the new Lacerte Trial Balance Utility.

The Lacerte Balance Utility enables users to do most of the trial balance work in the tax program, saving time preparing year-end client data for the tax return. The product, which is expected to launch in July, can import data from almost any program, including Excel. It integrates directly with QuickBooks and Intuit EasyAcct Professional and Business versions.

Given that often taxpayers do not fill out the organizer in preparation for tax season, Olavarrieta notes that both the Lacerte and ProSeries brands are in the midst of testing new concepts of organizers. However, he says it was too early to disclose additional details.

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