Now that many firms have a track record in automating tax prep, here's what's changed, the resulting efficiencies, and what it means in terms of needs.

Anyone interested in how to retool a tax office through the use of workflow tools should talk to the partners at Red Bank, N.J.-based Withum Smith+Brown, because the firm decided to implement the package from XCM Solutions during the recently concluded tax season.

"People fear to change during tax season," notes firm shareholder Jim Bourke. "It is a little straining. We are asking for people to take one extra step."

The benefit was getting the transition out of the way. As information came in, it was entered in the tax software databases and, for the 2010 tax season, the firm will have information ready for most of its clients. "If you did a tax return in the past for the client, you are probably going to do a tax return in the future," Bourke adds.

All of the firm's engagements are going into the XCM workflow sheets, including accounting and auditing work. "It helps to have everything in a digital environment. I can be anywhere at anytime," he says. "I can log into our workflow tool and see who's working on a return, open items, and check the status, dates and time returns are sent out, and the FedEx tracking number.

The process was no more painful than any other software installation, according to Bourke, who also notes that any firm will have "some degradation of realization" in the first year of using a system, but that will be recouped in subsequent years.

The Playing Field

Automating the tax preparation process is a hot topic, and discussions about workflow draw tax and accounting professionals into a world of document management, scanning, and Internet distribution of documents through portals. Workflow is simply about who does what in what order, and that should be qualified by a description made recently by Roger Mongeon, co-VP of sales and marketing for Doc.It: That it is about communicating that information within the organization so that everyone knows the procedures. If an organization doesn't understand its processes, implementing new technology can become an exercise in automating bad processes and getting less-than-optimal results, but more quickly.

While CCH has partnered with XCM, and says it will continue to do so, the company plans to launch Workstream, which combines elements of workflow and practice management. It will link to many elements of the CCH ProSystem fx Suite, says Mike Sabbatis, CEO of CCH Tax and Accounting. While it will track returns on their way through a firm, Workstream is much more than that, he continues. "It's a project-management workflow tool," says Sabbatis, "a client common database that's shareable among all of our application."

One of the most significant steps in automating the process is scanning source documents. The first generation of scanning products captured images and produced indexed PDFs. The current wave of apps not only scans, but can also extract data from W2s and 1099s and populate the appropriate fields in the tax-return software.

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