Tax workflow is the simple process of gathering all of the data needed to do a tax return, bundling it with the tax forms and worksheets as they are filled in, and then routing to the preparers and reviewers who need to see the return before it is filed.
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It is a process so simple that in the days before desktop computers and the cloud, the whole thing could be performed with a legal-sized accordion file made by Redweld and a hand-printed routing sheet.
Converting such an elegant process to the computer should have been relatively easy, but it wasn't. In fact, the process has become so convoluted that few providers of tax preparation software offer a workflow product that can do the entire job well. Making things worse is the fact that in other areas of an accounting practice, such as trial balance and audit engagements, there are fairly robust workflow systems that have built a niche for themselves on the accountant's software bookshelf.
What makes tax workflow so complicated in its modern iteration is that workflow is not a single process, but rather a collection of five very different processes. These include:
• Data entry tools. The data entry portion must be capable of handling information from a broad range of sources -- banks and brokerages, accounting software, shoeboxes full of small paper receipts, employer payroll forms, etc. -- and flow this information seamlessly and accurately into the tax preparation software.
• Document management system. The DMS is sometimes thought of as little more than a way to save documents in PDF format so that they can be retrieved, searched and used in the future. But that's too simple a view. For tax workflow, the DMS must be capable of storing multiple documents of different sizes and shapes in a single client folder, organized for optimal access by multiple persons within the firm.
• Collaboration tools. These are generally handled through a portal system, but should provide the means to share documents and communications not only among firm members, but with the client as well. A good system will allow staff members to be assigned to the client, with their roles delineated properly (gather information, input, preparation, review, etc.). This level of collaboration requires tools that can not only route a folder of documents, but can do so automatically, without human intervention every time the folder needs to move to the next level.
• Deadline and task management tools. This capability may be included in the collaboration tools, but may not be. These tools provide "ticklers" to ensure that a professional can quickly scan their projects each day and know what needs to be done. A calendaring and appointment-scheduling tool is also a critical feature of this task management.
• Engagement tools. Tax is an engagement, and the workflow tools should reflect that, with capabilities for client letters and reports; time and billing capture; notes and worksheets; automated invoicing; electronic filing of returns; and other documentation, all captured in the work file for that client tax return.
We've surveyed the best-of-field entries for workflow in a tax practice or engagement. Most of these are built into the tax preparation software, and all of them show at least a passing recognition of the growing importance of workflow tools. And while these offerings may not meet the full range of workflow management requirements, they represent a strong step in the right direction.
Automated Tax Office Manager LLC
Automated Tax Office Manager differs from most of its competitors in that it provides for lobby management and client check-in. The emphasis here is on engagements in which the client is likely to visit the accountant -- for bookkeeping, payroll, tax and even financial planning. It manages client check-in and staff notification, and even includes a Refer-A-Friend system.
It includes a document storage and management system that uses a client/staff portal for secure, 24/7 access to tax returns. The scheduling system manages staff assignments and calendars, and can schedule client appointments based on historical data such as return complexity and length of past engagements. Automatic appointment reminders are generated and sent via e-mail or text message. The software can track multiple types of workflow engagements across multiple offices. And it handles internal accounting chores that include staff payroll, time and billing, and automatic generation of client invoices.
ATOM is compatible with most leading tax preparation packages, including Drake, Crosslinks, ProSeries, Taxwise, ATX and others. The fees for this Web-based application include all updates, online hosting and nightly backup, training manuals and videos, and 10 gigabytes of storage.
ATOM is clearly geared to the tens of thousands of dedicated tax return preparation offices. But it should be noted that the system overall offers more of the elements of a classic tax workflow solution than most of its competitors. It's not a perfect solution -- the data entry and import system is not well defined, and it could use a more robust collaboration system -- but it is a surprisingly complete package, worthy of consideration by full-service accounting offices.
Drake Tax Workflow
Drake's flagship tax software offers workflow capabilities that include a document management system and a Client Status Manager.
The CSM enables a tax office to organize, view and search client files; follow workflow and manage productivity with on-screen tracking and reports; and track return details, including preparer efficiency. Within the software's interactive home window is the Personal Client Manager, a condensed version of the CSM that helps each professional organize returns and appointments. Finally, a Multi-Office Manager that works with the CSM helps to organize client files across multiple locations.
Additionally, Drake Tax software now integrates with GruntWorx, the secure, Web-based application that automates the time-consuming tasks of organizing and populating client tax data into tax preparation software (see below). This integration enables tax preparers to save up to 40 percent of the time typically spent in data entry.
GruntWorx, acquired by Drake Software in 2011, provides a set of workflow tools to manage the import and organization of client data for tax purposes.
GruntWorx Organize identifies, organizes and labels the scanned tax forms into a PDF file, with the document issuer's name on each bookmark -- eliminating the time-consuming manual task of identifying and sorting client documents before scanning. GruntWorx Populate extracts data from the bookmarked documents and imports the data into many leading tax preparation software packages. Working in conjunction with GruntWorx Organize or GruntWorx Populate, GruntWorx Trades converts trade details on scanned 1099 Consolidated Brokerage Statements into a standard Microsoft Excel spreadsheet file for easy manipulation and import of trade details.
CCH ProSystem fx Tax workflow systems
CCH, a Wolters Kluwer business
Basic tax workflow capabilities are built into the ProSystem fx Tax system, including the ability to monitor the status of any tax return and the responsibilities of staff through completion. There is also a comprehensive on-screen review system featuring color-coded tick marks, field and global notes, lists, overrides, and estimates. A more robust set of workflow tools is found in some of the other solutions that make up the ProSystem fx Suite of tax, audit, accounting and workflow tools.
For example, ProSystem fx Portal allows firms and their clients to share source documents, financial statements, organizers and the finished tax returns securely. ProSystem fx Scan - available as an on-premise or SaaS solution -- quickly and reliably takes the proverbial "shoebox" of unsorted client information, determines what each item is, and outputs the documents to a single organized and bookmarked PDF file. AutoFlow Technology takes the data extracted by ProSystem fx Scan and imports it directly into the ProSystem fx Tax return.
ProSystem fx Document is an electronic file room that stores documents in a central repository for easier retrieval and use. ProSystem fx Practice's Time Capture and Clock tools empower employees to manage their time more effectively.
There is also a new SaaS product, ProSystem fx Workstream. One of the first of the ProSystem fx products to be offered in an integrated online platform, Workstream monitors due dates, manages all products and maps processes into pre-defined steps to ensure accuracy. Built on the Microsoft .Net 3.5 platform, it is scalable and provides seamless integration with other ProSystem fx Suite products.
Other capabilities include tracking of clock time spent on project; automatic triggering of project status notifications (including milestone dates and budget-to-actual analysis; posting of notifications to a dashboard; assignment of staff to each step in a project; alerts when start, target and due dates are met; and integration with CCH Time Capture, Billing and Accounts Receivables modules).