Getting through tax season is always a bear. And with the differences in fiscal years and extensions, tax season, while peaking in the first four months of the year, actually ebbs and flows throughout the entire year.

For many practitioners, tax prep is all about the return. And since that is the ultimate work product, that focus isn’t entirely incorrect. But the return is the end product of a process that starts much earlier. If you go through a tax season without a good idea of what the workflow in your practice is, and without software that helps control and manage that workflow, you’re working harder than you have to.



While workflow software can help you organize the process in your practice, before you can apply it effectively, you must first understand what the workflow in your office consists of, and optimize that workflow to eliminate wasted procedures, approvals and unneeded routing that can introduce significant delays into the flow. Along with this, you need to also understand how tax workflow software works alongside the other applications you use. A truly integrated office is one where the principals understand that separate processes often incorporate into an integrated whole.

It’s beyond the scope of this article to explain how to perform a workflow analysis in your practice. There are plenty of articles and books that address this subject. A good place to start might be with a white paper from Thomson Reuters — “Maximize Your Firm’s Efficiency with a Tax Workflow Assessment” (online at You’ll have to enter your contact information to access it, and will probably have to field a sales call as well, but the white paper does a decent job of explaining how to assess your practice’s workflow.

To give you a good idea of where the state of the art is, how tax workflow software is changing the way that accountants approach the tax preparation process, and some of the areas that vendors are looking at for the future, we surveyed nine vendors in this application space, asking for their experience and insights. Participating in the survey were Mike Sabbatis and Mark Albrecht, chief operating officer and chief executive officer, respectively, of XCM Solutions; Mark Pricco, owner and president of Automated Tax Office Manager; Julie Pierce, vice president and general manager of GruntWorx; Julie Kozloski, senior product manager for ProSeries at Intuit; Ram Shamanna, senior product manager for Lacerte at Intuit; Timothy Parker, communications director at OfficeTools; Greg Pope, vice president of SurePrep; Christie Johnston, product manager for practice management at the Tax & Accounting business of Thomson Reuters; Samantha Grovenstein-Deal, product manager for CCH Axcess Workstream at Wolters Kluwer Tax & Accounting North America, and Cathy Bruce, product manager for CCH iFirm Practice Manager at Wolters Kluwer.



In many areas, our panel was in complete agreement. Some of the key points they made are that tax workflow software brings to the process the centralization of data and an awareness of where in the preparation process each return resides at any particular moment. That’s not to say that these benefits can’t be achieved without specialized vertical software. Many practices use segmented folders residing on a central drive of network attached storage to contain the return and any scanned ancillary material. Some haven’t quite gotten that far, still maintaining client records manually in a physical folder that’s passed around the office as the preparation proceeds. And spreadsheets have been a staple for tracking returns since their first introduction decades ago.

But many of these implementations are catch-as-catch-can. And many home-brew solutions aren’t particularly user-friendly or well-documented. As ATOM’s Pricco put it, “Saying goodbye to the file folder is the best thing that could happen to a tax office.”

And Thomson Reuter’s Johnson noted that, “[Workflow] solutions provide firms with altogether new options as to how to organize tax staff. For instance, firms may consider a pooled-resource approach for staff preparers, where rather than assigning a particular preparer to each return, the workflow system manages a work queue and provides the next tax return in line to the next available preparer.” Of course, this approach may also have a downside, as in many practices, a particular staff member may be very familiar with a specific client’s circumstances that would have an impact on the return.

“If you look at tax workflow as it was defined, it was one-dimensional — it moved data from source documents through work processes to filing,” said XCM’s Sabbatis. “We’re redefining it as a productivity-enablement platform. From the human capital side, driving productivity on that side is where the payoff comes.”

Increasing staff and practice efficiency is something that came up repeatedly in our survey as a major benefit of tax prep workflow management. SurePrep’s Pope noted, “Electronic workpaper sign-offs, annotations and diagnostics allow reviewers to focus only on the items that they need to address so their efficiency is maximized.”

“Practices also have a much clearer picture on how to best allocate their time and staff resources to both serve their current clients and grow their business. Far from being a luxury, tax workflow software is becoming an essential element for small offices that want to maximize their full potential,” Wolters Kluwer’s Bruce told us. Using workflow software to stay on time and budget is another benefit Bruce pointed out.

Wolters Kluwer’s Grovenstein-Deal added, “Gone is the inefficiency of the milk crate that I’ve seen in firms, which you have to dig through to figure out what return to work on next if you have capacity.”

Managing that capacity is another aspect of tax workflow systems. “You walk around and say, ‘Everybody’s busy,’ but resource allocation lets you look across departments and see who’s actually busy and who’s not, and it’s all done automatically, because it’s tied to the workflow, and it’s automatically updated,” explained XCM’s Albrecht. Clearer insights into what work staff are doing, and what stage that work has reached, allow managers to optimize their workforce, and respond better to tight deadlines and sudden emergencies.



Tax prep workflow software is not just about scheduling and prioritizing. One of the most useful aspects of many of the tax workflow solutions currently available on the market is the ability to digitize documents. While preparer expertise is the most important ingredient in the preparation of an accurate return, organizing documents and extracting information from them are a necessary and time-and-effort-consuming component of the workflow.

An interesting statistic comes from Intuit’s Kozloski, “According to internal Intuit studies, preparers report they are spending only about 25 percent of the total tax return completion time on actual tax preparation, and the rest on ancillary activities.”

There is an increased focus on boosting productivity on these ancillary tasks and eliminating wasted time, so accountants can focus on more “value-added” activities. Also, widespread adoption of online and mobile devices among the taxpayer base is influencing the way they collaborate with tax professionals.

Addressing these trends, Kozloski pointed out that workflow software is incorporating productivity-enhancing capabilities such as accepting source documents that were scanned from a mobile device.

This pathway, as well as stand–alone scanning, makes scanning source documents an important part of the workflow process for many vendors and practices.

According to GruntWorx’s Pierce, “The key to unlocking the power of scanning and the potential of the paperless environment is to scan at the beginning of the tax workflow process. Scanning after the fact or not incorporating your scanning into your workflow is creating nothing more than electronic photocopies and is inhibiting the benefits of paperless workflows.”

While scanning is an important part of the process, just scanning documents is not the whole story. The important thing is the data contained in those scanned documents. Pulling this data from the source documents is often done in a stand-alone environment. GruntWorx’s Populate integrates with Drake Software, Lacerte, UltraTax CS, ProSystem fx and GoSystem Tax RS, while SurePrep’s 1040Scan Pro and 1040 Scan Verify are largely vendor-agnostic. Intuit’s Tax Scan and Import service is set up to work with the company’s tax preparation products.



One important consideration in the tax workflow is contact with the client. Making it easier to interact with a client at all times during the tax prep process is an area gaining increasing importance. For example, ATOM has a Lobby Management feature that helps manage busy waiting rooms.

And e-mail and client portals are an important aspect of the communication issue. “This past season, Lacerte users were able to send their organizer requests, checklists and questionnaires to Intuit Link right from within the program. They were also able to send missing data type requests to clients via Intuit Link,” Shamanna told us.

Office Tools’ Parker underlines the importance of this communication both between the practice and its clients, as well as within the practice itself: “Truly paperless workflow processes are making it easier than ever to work remotely. Collaboration between preparers, reviewers and administrative staff in multiple office locations, even in different countries, means more staffing options than ever before.”

The company’s Workspace Online allows firm staff to upload their schedule availability so their clients can request appointments via the Web, enables secure document intake and delivery, provides invoice upload and online payment, and also includes a kiosk check-in system with an integrated client questionnaire.



We also asked what vendors are working on, and what they see in terms of future enhancements in tax prep workflow software. Improvement in extracting data from documents was one area where vendors saw room for improvement. While GruntWorx already provides support for all the Affordable Care Act health forms (the 1095-A, 1095-B and 1095-C), Pierce added, “We also hear from clients who want the capability to process unstructured tax documents such as receipts and income/loss statements.”

SurePrep’s Pope thinks, “Customers would benefit from being able to eliminate costly and inefficient paper organizers. Giving CPA firms the ability to request and receive documents electronically from the taxpayer, which would then integrate seamlessly into our 1040Scan and SPbinder software, is something we’re working on for this coming tax season.”

Return and staff status is another area where vendors feel enhancements can be made. According to Wolters Kluwer’s Grovenstein-Deal, “To drive greater efficiencies and improve workload management, firms are continuously seeking more intelligence about status/state of projects, worksteps and assignments. This includes providing dynamic and configurable dashboards and key performance indicator management tools that will empower staff members, managers and partners to make better decisions based upon actionable information.”

One of the focuses for XCM, according to Albrecht, has been moving to HTML 5, which gives its products “responsive design” — meaning that they configure themselves to whatever device they’re being viewed on, whether it’s a desktop computer, a laptop or a handheld device. “People want to use what they want to use, when they want to use it,” Albrecht said. “This world is becoming a mobile society, and to the extent that everyone’s going there, we’re going to get there first.”

Taking an even broader view, Sabbatis added, “From where we see the potential going in the future, you can’t deny that the machine is taking a more active role in what we’re doing. In tax, whether it’s income tax or sales tax or excise tax, we see the machine playing a bigger role. Some of the workflow is going to be more automated … and with the intelligence that’s built in, we’re able to think more proactively about how work is managed, letting the systems provide more decision-making tools.”



If you aren’t already using workflow software in your tax prep practice, it’s time you look at adding it. The lull in preparing returns allows you to do your systems analysis of the workflow in your firm without the pressure of having to quickly implement a solution. And the tax prep software you already use may have integrated or optional workflow features that you aren’t making full use of. Now is also a good time to investigate software that will give you expanded efficiency and productivity, such as a scan-and-extract application.

Finally, keep in mind that while this article has primarily addressed preparation of federal and state returns, workflow software that incorporates scheduling, due-date tracking, and staff allotment is equally useful when it comes to other kinds of tax return filings, such as sales and use taxes.



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