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.

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.


ATOM Workflow

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 Software

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.



Drake Software

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).


Intuit Tax workflow products

Intuit Inc.

Intuit offers three different levels of tax workflow management, each incorporated into existing tax products.

Intuit Tax Online is a Web-based professional tax compliance system, providing multi-client management tools, client organizers, PDF file management and integrated banking products. The Tax Year 2011 version has seen continued development and expansion of the system's capabilities, including the addition of fiduciary returns to those already offered (1040, 1065, 1120 and 1120s). The program also includes diagnostics, network access and client communication tools. While it does offer rudimentary workflow support, the paperless output is limited to PDF files and no client portal capabilities are offered.

Intuit ProSeries is aimed at small and midsized tax professionals, offering packages that cover compliance for all taxed entities and with features for document automation, client billing, client communications, research, and integration with accounting programs. For 2011, the program added new exporting options, client-copy watermarking of returns, and more federal, state and local forms. Again, workflow tools are incorporated into the system -- including an optional scan-and-organize system. However, ProSeries lacks client portals or direct file-sharing, and offers only limited support for multi-preparer return collaboration and review.

The most sophisticated workflow support is offered in Lacerte Tax, the company's most complete and powerful line of professional tax software, offered by Intuit's Accounting Professionals Division. Designed for full-service tax and accounting firms with multiple staff, Lacerte helps firms finish complicated tax work in less time by simplifying routine tasks with an end-to-end system spanning across input, preparation, analysis, research, paperless storage and more. Specific workflow support is provided in the automated data entry system, and in the Lacerte document management system.


PaperlessPlus with Premier Features

CCH Small Firm Services

The Small Firm Services division of CCH has integrated several workflow features into its ATX and TaxWise product lines, but last year it launched an enhanced document management and scanning module called PaperlessPlus.

Formerly known as Scan&Fill, PaperlessPlus saves and stores e-mails, spreadsheets, memos and other documents as PDFs in a client's electronic folder, protected with passwords and folder-locking options that can further restrict access. PaperlessPlus also features automatic backups, an interface that enables users to open any document with very few clicks, and electronic signature capabilities allowing clients to sign documents electronically using e-signature pads.

PaperlessPlus is available with upgraded premier features (called PaperlessPlus Premier), which include Premier Scan to identify scanned documents. This upgrade automatically sorts and organizes a client's documents into a bookmarked PDF file, and identifies forms and captures data by reading W-2s, 1099s and the 2D bar codes on W-2 and K-1 forms. Both products integrate with ATX and TaxWise, so tax preparers can export W-2 and 1099 data to clients' tax returns.



SurePrep LLC

SPbinder is an electronic binder application that allows users to prepare, review and share a paperless set of workpapers for any engagement type.

Introduced by SurePrep in 2011, it enables tax and accounting practices to reduce the time required to prepare and review workpapers, while enforcing standardization across the firm. SPbinder allows firms to create binder templates for each type of engagement, with four levels of rights-based signoffs. Included in these templates are customized, multi-tiered indexes that standardize the organization of your workpapers. SPbinder templates can also contain PDF, Microsoft Excel or Microsoft Word files, eliminating the time required to index and organize these files in your paperless binder.

Additionally, Outlook e-mails can be dragged right out of Outlook and dropped into SPbinder for fast and easy inclusion in the workpapers. Excel, Word and e-mail files can be annotated and cross-referenced to document images. Since the Excel and Word files integrated in SPbinder are fully functional, preparers are able to make changes to them without having to reprint them to PDFs or manage them as separate files.

SPbinder also takes advantage of SurePrep's patent-pending technology that allows firms to index all file types at the workpaper level to what SurePrep calls "the element level." This means that not only can you index each page of a PDF file, but you will also be able to index each worksheet in an Excel workbook separately. This added level of indexing allows a single spreadsheet to be indexed in all of the appropriate sections of the workpapers, making the review of an engagement significantly faster.


Ultra Tax CS

The Tax & Accounting business of Thomson Reuters

UltraTax CS itself offers substantial workflow management tools, with additional capabilities available by making full use of the CS Professional Suite and Enterprise Suite.

There are a variety of ways to transfer account balances and other source data. The data is then available to all of the functions and accounting modules in the suite, including live flows into UltraTax CS. Once the returns are completed, they can be posted with other client papers to the NetClient CS client portal. Meanwhile, the client data is also securely archived in FileCabinet CS. Finally, Practice CS helps to manage employees and resources; invoice clients; and process credit card payments directly through the NetClient CS client portal.

Some of the internal workflow capabilities of UltraTax CS itself have been enhanced in the most recent upgrade, including enhancements to the robust status system and automated lists of to-do items and missing items. Additional tick/note enhancements allow many more tickmark icons and permanent icon-to-user assignments, as well as the ability to assign different colors to different preparers for improved review techniques.


GoSystem Tax RS

Thomson Reuters

In a manner similar to UltraTax CS, the GoSystem Tax RS workflow capabilities draw heavily on the Enterprise Suite.

The initial workflow characteristics are based on the ability to flow information provided by the client into GoSystem Tax RS, where it is validated using comprehensive review tools and hyperlinked diagnostics. The tax preparer files a copy of the return in GoFileRoom, and sends the finished return to the client using NetClient CS. Employee time is tracked and recorded in Practice CS, which also assists in billing clients and collecting electronic payments through NetClient CS.

An additional resource for the tax programs is FirmFlow, which supplements digital processes for tax and other accounting practices. Integrating smoothly with GoFileRoom, FirmFlow enables the standardization of firm processes, improves staff collaboration, and customizes the workflow processes.


XCM Automated Workflow Management

XCM Solutions LLC

Celebrating its 10th year of serving public accounting firms of all sizes, XCM Solutions was one of the first companies to put resources toward development of a dedicated workflow automation system for the profession. Today, XCM is among the most complete systems for managing the flow of work across the firm.

XCM's features include a centralized information repository for all project-specific information and knowledge, one-click advanced search, full tracking and due date management, and a full suite of client and management report templates. It integrates with CCH ProSystem fx Document and Practice Management, Windows Explorer, and other leading DMSes for effectively managing work across multiple offices. Its workflows can be customized for a wide range of accounting practice areas, including tax, bookkeeping, accounting and audit, proposals, and operational functions such as IT. It also offers accounting and audit compliance and reporting capabilities to track all information required for engagements, including an extensive sign-off page, the ability to track 45- and 60-day requirements, partner rotation, reporting, and scheduling dates, among other things.

For smaller firms, XCMessential and XCMessential Plus offer firms with from one to five and five to 10 users, respectively, the ability to use a dynamic "to-do" list, automated workflow management, digital routing sheets, and client service and management reporting capabilities. XCM Corporate is offered for corporate accounting and tax departments. And its integrated XCMportal extends secure collaboration to the firm's clients.

As the company moves toward the release of Version 10.0 later this year, XCM has evolved into a very robust workflow product that provides a full view of all work in progress at the individual, departmental, office and firm-wide levels in one centralized, easy-to-access dashboard.

Dave McClure is the president of Kent Associates, in Alexandria, Va., an independent testing laboratory and evaluation service.

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