There is a growing consensus among accounting firms that they are losing control of tax workflow. In the crush of new responsibilities -- from the Patient Protection and Affordable Care Act to efforts to identify and combat identity theft -- tax and accounting practices at every level are finding even the most sophisticated workflow tools may not enable professionals to keep pace.

That's disconcerting for an industry that has prided itself on its business acumen and service to clients, particularly given the emphasis on efficiency and cost effectiveness that has occupied the attention of partners in every size of firm for the past two decades. It is a problem that affects not only public firms, but the tax departments of corporations worldwide.

In a 2012 report on workflow, Deloitte Tax noted that, "Tax leaders often do not have access to a consolidated inventory of the various national and jurisdictional obligations that their company is responsible for. In many cases, they do not know if filings are being completed on a timely basis - or at all. In addition, they may have little insight into the tax processes linked to statutory obligations or internal non-statutory obligations and processes. Without a complete inventory of these obligations, tax executives may not have a clear view of all their department's obligations or visibility into the processes to meet the obligation deadlines."

While this assessment may seem bleaker than it need be, it does point to the problems the industry is beginning to encounter that can only worsen if not addressed in the near term:

  • Increasing responsibilities in a highly regulated environment. From Sarbanes-Oxley to Circular 230, from the Affordable Care Act to identity theft, and from employment verification to enforcement of financial controls, accountants are being tasked with ever more liability. In fact, this weighs heavily on the minds of professionals in every size of firm. The American Institute of CPAs' 2013 PCPS Top Issues Diagnostic Report shows that firms of virtually every size list the increasing complexity of laws and regulations as factors for management consideration.
  • Transition to the cloud. As difficult as it may to believe, nearly half of all accounting firms have made the transition to the cloud, according to a late 2013 survey conducted by CPA.com, the technology arm of the AICPA. But they expressed concern over cloud vendors' ability to manage data breaches and maintain effective internal controls, with the percentage of those identifying themselves as "somewhat confident" or "not confident at all" -- the two lowest categories -- rising from 15 percent a year ago to almost 43 percent now.
  • Workflow is not optimized. A workflow system is not simply a means to assign responsibilities and track the progress of tax returns through completion and review. To be successful, a system must reduce inefficiencies and be optimized to drive higher levels of productivity. Tax workflow systems that cannot do this simply waste resources -- the firm would be better off starting over, or reverting to paper cover sheets. One of the new fronts in the battle for productivity is the use of electronic signature pads. Vendors of tax workflow systems are promoting the use of these small scanning devices to fill in signatures on forms. While the time saved on any single tax form is small, the cumulative gains in time for total return preparation can be impressive.
  • Workflow systems are isolated. All too often, it is easy to view the workflow system as existing in isolation -- somehow disconnected from other operations of the firm. But if it is to be optimized for peak performance, it is necessary to integrate the workflow procedures into all of the other systems of the firm, from billing to client communications and client services.
  • Differentiating types of workflows within the firm. Almost from the outset of workflow management some 25 years ago, the struggle to build, optimize, operate and benefit from tax workflow systems has been one of differentiation: differentiation of manual versus electronic systems; of accounting workflows from tax workflows; and of professional versus staff responsibilities. That is unlikely to change in the near term, though efforts continue at more firms.

In recent months, a new form of differentiation has been considered for tax workflow, built around the number of professionals and the resources required to complete simple versus complex returns.
Under this differentiation schema, tax returns are prepared either through a "traditional" workflow or an "advanced" workflow:

"Traditional" tax workflow engagements are managed by a single professional preparer with the support of an administrative person to handle data compilation, scanning, data entry and organization. It requires only a single interview with the client, and is the most common workflow model for high-volume individual tax return practices.

By contrast, an "advanced" tax engagement requires a more robust response, often involving several staff in the preparation of multinational, federal, state and local tax returns. Administrative chores are handled by more experienced para-professionals, with professional staff held in reserve for tax issues, exceptions, planning and reviews. While a simple 1040 return for select clients may fall in this category, it is also used for preparation of tax returns for business entities with complex ownership structures, multi-state apportionment of income, oil and gas partnerships, cross-border or expatriate returns, or elections for special treatment of transactions.

The marketplace for tax workflow solutions is changing in a tangle of new regulations, new responsibilities and new demands for performance. While the industry is struggling to keep pace, the best of the systems identified for 2014 have established a strong start toward resolving these issues.

 

CCH Axcess Tax (Wolters Kluwer, CCH)

CCH Axcess Tax is a modular, cloud-based solution for tax preparation, compliance and workflow management. It features a centralized database and common services to enhance firm productivity by eliminating redundant data and processes. Routing sheets are opened from anywhere in the tax return, project statuses entered from the CCH Axcess time entry screen, and projects linked to files stored in CCH Axcess Document.

CCH Axcess Workstream features work- tracking and project management components to monitor due dates, manage projects -- no matter how simple or complex -- and map processes into standardized steps to ensure consistency. It does this by enabling master templates to be tailored to different types of work, standardizing processes into custom tax workflow projects as needed.

A project dashboard provides instant notifications and up-to-date project information, in addition to flexible reporting. The new mobile Client Dashboard lets accountants view client information, contacts, notes, accounts receivable balances, payments and invoices, as well as a client's projects from the Client Dashboard.

 

Gruntworx (Drake Software)

Gruntworx provides a set of workflow tools to manage the import and organization of client data for tax purposes. It offers a secure Web-based solution that automates the time-consuming tasks of gathering, organizing and populating client tax data into the leading tax preparation software applications.

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.

The greatest value in GruntWorx is found in two of its features -- it can easily be mastered by administrative professionals, freeing up tax professionals for higher-level and more profitable tax return preparation and assessment services, and, at the same time, it provides sophisticated error-checking to reduce the requirements for rechecks and corrections after the fact.

 

Online Accountant Workflow (Intuit Inc.)

Intuit Online Accountant Workflow is a cloud-based tax preparation and workflow solution that enables tax professionals to prepare and e-file returns up to 25 percent faster.

QuickBooks Online Accountant Workflow capabilities include "Notes and Tasks," enabling users to assign tasks to others in their firm as well as leave notes attached to client files to others in a firm, so they can pick up where someone left off; the ability to easily add a new QuickBooks Online client; and access to all their clients' files and tax returns though a single interface. Intuit also offers a mobile application for iOS and Android that allows accountants to view their client's tax return summary information, check e-file status, securely e-mail tax returns directly to the taxpayer, and provide customer contact information. New for this year, the mobile apps include a companion application for taxpayers. TaxLink is a mobile application that the accountant's clients can download, and it enables the accountant to easily communicate, collaborate and exchange documents with their clients. All mobile applications are free to use.

 

ONESOURCE Workflow Manager (Thomson Reuters Tax and Accounting)

ONESOURCE WorkFlow Manager is a management software system that combines document management, data management and collaboration to power the entire corporate tax process. It connects ONESOURCE software on a platform level, and provides a centralized location from which to standardize and streamline all of the tax work. It's Web-based, for anytime/anywhere access. And it's fully customizable to meet the unique needs of each department.

It provides intelligent task automation through a powerful workflow engine. Prioritize tasks, automate manual efforts, monitor projects at each step, and complete every aspect of tax preparation with accuracy and efficiency. Tracking and reporting features help ensure timely project completion. The program forces a standardized indexing, supports documents in any format and has the levels of security permissions users need. With document management and storage in a central location, users can easily establish their tax department as a paperless office.

With ONESOURCE DataFlow, users can collect and manage data in any format and make it consistent. The Web-based spreadsheets integrate with existing tax packages and workpapers. Data can be distributed and monitored easily, housed in a central repository for review, and transferred directly to any tax software.

 

Practice Management Workspace (Office Tools Professional)

Practice Management Workspace from Office Tools Professional combines dashboards and data entry into a single workflow screen that combines contact management, calendaring, collaboration and task delegation, expense and billing, and tickle-file management in a desktop-based solution.

From phone calls and e-mails to documents flowing in and out, everything is tracked, accessed and measured. Workspace tracks how much time was spent and how much was billed for optimal firm productivity.

Practice Management integrates with the Microsoft Office programs Word, Excel and Outlook, in addition to popular mapping programs. Reports can be exported directly to Word, Excel and all common formats. Firms can create timecards for payroll or billing inside of Microsoft Office, and an Adobe add-in enables printing or saving of any file in PDF format.

 

TaxWorkFlow (TaxWorkFlow LLC)

TaxWorkFlow is an affordable, comprehensive tax management solution that enables firms to use one software application to increase the profitability and productivity of their tax workflow while streamlining and increasing the effectiveness of firm operations, including internal and client-facing communications.

TaxWorkFlow also has comprehensive customer relationship management capabilities, allowing firms to consolidate the contact information, tax data and documents, and account activity for each client.

All client documents can be stored directly in a central database instead of a local machine, categorized according to the firm's preferences. Users can create as many folders and subfolders as they wish and upload all types of documents to the system using corresponding buttons or simple drag-and-drop.

TaxWorkFlow offers administrators and managers the ability to assign individual user passwords and logins to control access to information and to monitor workflow progress, so management always knows who is responsible for what.

 

XCM Workflow Automation Software (XCM Solutions)

XCM is a scalable, cloud-based solution that is designed to meet the needs of firms of all sizes and specialties, beginning with sole practitioners.

It has been substantially enhanced in recent versions with modules that include an XCM scheduling module built on two capabilities -- Automated Tax Scheduling and Calendar Scheduling -- and expansion of XCM mobile's capabilities and platforms, which offer essential "on-the-go" workflow capabilities from smart phones and tablets.

This mobile view includes the ability to view all projects assigned to each staff member on their My View page for personal workload management; the ability to search for projects to quickly see the status and associated information; the ability to add issues and points, or knowledge to a client project, and respond to client questions; the ability to move projects to the next step in the process and close completed checklist items; access to project-specific details like jurisdiction and due date information; and the ability to sign off on completed projects to more quickly move work forward even while out of the office.

This release has also seen the introduction of Resource Allocation Scheduling. It has the ability to determine how busy people are today, who is overloaded with work, who needs work, and who is available to do the work that just came into the office, allowing the firm to effectively allocate work across multiple levels of people and multiple levels of tasks.

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