Automation means a less 'taxing' season

Automating tax workflow improves efficiency, saves time during the busy tax season and, in turn, can help bolster profits.

If you're in doubt, just ask Jim Bourke of WithumSmith+Brown. The New Jersey-based firm began looking into scanning and population technology more than a year ago, and last fall selected Copanion's GruntWorx solution and XCM Solutions' workflow application. During the past tax season, the firm rolled out GruntWorx on a limited basis and put roughly 500 returns through the system to gauge its success. The result: a 20-to-30-percent time savings per return.

"My goal is to do a full employment of the technology for the next tax season, because the realization rates on those returns in the system last year would turn into significant returns for the next season," said Bourke, a partner and director of firm technology.

In addition, the firm went live with XCM's workflow solution in October 2008, rolling it out to every office and covering all tax and accounting and auditing projects for the tax season. Both applications are totally independent and serve a specific purpose, Bourke noted. XCM reported on the flow of the project, while GruntWorx electronically populated the tax returns.

Like WithumSmith+Brown, tax and accounting firms are increasingly discovering the benefits of automating workflow. One of the challenges, however, is identifying the most suitable solution and best practices that will result in productivity gains.


A good place to start is to first review and map out the firm's current workflow process and identify the points of "pain."

"You need to spend a couple of weeks talking about the current workflow and what will change," recommended Bret Wier, vice president of sales and marketing for Newport, Calif.-based SurePrep, whose product portfolio includes 1040Scan and the SurePrep Express Web-based workflow system.

Joseph P. Manzelli Jr., director of operations for the Fuoco Group, agreed. "A word to the wise is to map it out first," he said.

Long Island-based Fuoco Group began using XCM for outsourcing roughly four-to-five years ago, but in 2007 decided to use XCM strictly for its workflow capabilities. For this coming tax season, the firm, which handles between 2,000 and 2,500 individual returns a year, is looking to implement either SurePrep's 1040Scan or CCH's ProSystem fx Scan to use with XCM for data transfer.

One of the most efficient ways to automate workflow is by scanning documents on the front end versus the back end. There are several benefits to front-end scanning: Professionals are immediately working from digital files and an administrative employee can handle the up-front scanning so preparers have more time for billable work.

"When we went paperless, it eliminated paper moving around," explained XCM user Christopher Colyer, tax manager at Livingston, N.J.-based Wiss & Co. LLP. The firm, which handles about 2,500 individual returns and 3,000 business returns a year, began using XCM about four years ago. "It used to be that we'd have meetings to figure out who is doing what, but you don't need those meetings, so it is more efficient."

To further bolster XCM Solutions, the vendor has been adding document management integration capabilities (Windows Explorer and CCH's ProSystem fx Document) and, in the fall, will be releasing portal technology for the transfer of client data, said chief executive Mark Albrecht. In October the company will release integration with CCH's ProSystem fx Practice Management.

Albrecht said that firms must decide whether they want a "best-of-breed" solution or a "suite," which integrates with other products in that suite. Albrecht classifies XCM as a "best-of-breed" system because of its strong integration with other applications.

Cabinet NG, a provider of document management and workflow software, considers itself a best-of-breed solution for document management, according to James True, vice president of business development. Through CNG-SAFE, Cabinet NG can help accelerate workflow across the organization via document and folder routing.

Lynn Rust, owner and founder of Swanzey, N.H.-based Lynn C. Rust CPA, was having a difficult time finding qualified staff and was looking to ease the firm's workload. The firm had dabbled in automating the tax process with back-end scanning but it proved to be inefficient, so Rust turned to SurePrep this past tax season.

Rust uses SurePrep's 1040Scan with SurePrep Express Lite. 1040 - Scan automatically reads and transfers data from client source documents, like W-2s and 1099s, into a firm's tax software, while the Express Lite workflow solution offers such benefits as automatic tracking of review notes, detailed bookmarks for every document and an automated report for identifying any missing source documents.

Rust decided to hit the ground running and process all of the firm's 400 or so returns via SurePrep, versus taking a piecemeal approach, and is pleased with the decision.

"The bulk of [SurePrep Express Lite] does all we need to track and control the workflow for the client returns we are processing. This system allows us to have minimal manual input for most returns," said Rust. "While it is not 100 percent complete, we are already seeing the improvement in productivity during our first year."

Having a quality scanner is also important when automating tax workflow, as Jody Padar of James J. Matousek CPA Ltd., based in Mt. Prospect, Ill., discovered.

The firm is going into its third year of using GruntWorx and initially found itself backlogged because it didn't have a quality scanner. "The first year we had a bad scanner. Last year we got a commercial scanner," said Padar. "If you aren't going to invest in a $1,000 scanner, then don't [automate workflow] because you'll make yourself crazy."

Now, armed with the new scanner, Padar's firm is reaping the benefits of GruntWorx, which automatically identifies, organizes and labels the scanned tax forms into a bookmarked PDF file.

Steven Ladd, chief executive officer and a founder of Copanion, stressed the best practices of scanning source documents at the front end; having, at minimum, dual monitors to simultaneously view the digital documents and the tax prep software; and having a proficiency in Adobe.

"Those three tools are really key to doing well with this," he said.

CCH is launching in late October its new ProSystem fx Workstream for workflow management. Brian Steinert, director of product management for CCH, said Workstream, which can be used as a stand-alone product or in conjunction with other CCH products, is a combination of a project management and workflow solution. It includes project templates for ease of set-up, "my views" for the administration of project lists, easy import of government forms, a dashboard for notifications and project assignments, and both standard and custom reporting.

Steinert said that CCH will maintain its partnership with XCM despite the launch of Workstream.

When a firm goes paperless, staff productivity and smart scheduling become increasingly important, noted Roger Mongeon, vice president of Doc.It, a provider of document and workflow management technology. To assist firms, Doc.It's offering includes a Smart Scheduler tool that uses such criteria as cost, skill sets and level of importance to assign personnel.

To those who think that automated tax workflow ends with a completed return, Michael Herlihy, senior director of product management of Thomson Reuters Tax and Accounting, said not so fast.

"It doesn't stop after a return is completed. Portal technology extends the workflow process to the clients," he said, noting that Thomson Reuters offers its NetClient CS portals. To assist with workflow, Thomson Reuters offers Firmflow, which tightly integrates with GoFile­Room, and Practice CS's project management workflow module.

But even then, a firm's new automated workflow solution may not yet be finalized. "I always tell firms to do an after-busy-season review of how they used any workflow solution and go back and revise it," XCM's Albrecht said.

(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.

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