2010 Executive Predictions & Year in Review

From the Dec. 2009 Issue

What We Learned in 2009 and What’s in Store for the Future

In every profession and walk of life, there are those who identify trends and prepare for coming changes ahead of the masses. As a result, these forward thinkers enjoy the competitive advantages that come with recognizing future trends and the potential effects on their businesses. When it comes to technology implementation, early adopters are also quicker to realize the benefits delivered by those new technologies.

Determining which trends are simply fads and which offer true benefits to your firm is a major challenge faced by tax and accounting professionals. Over the past few years, major innovations have been presented to these professionals, and while some have approached these new options with skepticism, others have embraced the technologies.

WHAT WE SAW IN 2009, AND WHAT TO EXPECT FOR 2010

• Many new changes to tax law as a part of the February stimulus act, including enhanced first-time home buyer credits, changes to Sec. 179 expense provisions, and expanded bonus depreciation.
  
  
• Major new updates to tax and accounting programs, including redesigned components of the Thomson Reuters CS Suite, the introduction of Intuit’s new ProLine web-based professional tax compliance system, and the unveiling of CCH’s Next Generation ProSystem fx Suite.
  
  
• Growth for some vendors, including BQE, which made acquisitions and expanded it's offices in the U.S., Australia and the U.K. And the demise of the Microsoft Office Accounting system.
  
  
• Enactment of a bill that, starting in January 2011 (for TY 2010), will require e-filing for any preparer who "expects" to file 10 or more individual, estate and trust returns.

In addition to these specific tax law changes and the new and enhanced professional products, many more trends continued their course, including the movement toward web-based/SaaS professional applications, the popularity of client portals for collaboration and file transfer, the promise of cloud computing, and the increased adoption of technologies that optimize workflow in professional practices through streamlined management capabilities and OCR-empowered scanning utilities for organizing tax engagement documents and automated data entry into compliance systems.

Workflow optimization will continue to be the driving force in new technology development for many years to come because the concept involves virtually every aspect of professional client service and practice management. Simply put, workflow optimization is about working smarter, not harder, by implementing technologies that help users adapt to changing environments. The paperless movement was more than a precursor to the need for optimization; it was, at least in part, a cause for this need. As firms dramatically changed how they dealt with client information, it became necessary to find better methods of utilization and internal control.

Professional practices will also continue to move closer to a cloud computing reality. With increasing adoption of web-based services and programs, you are already doing so, even if you don’t recognize it as a progression toward the “cloud.” As an example, over the past 15 years, we’ve seen the transition of tax research move from book-based libraries, to CD libraries, to installed programs, to totally web-based. Most accountants are comfortable with that information not being "stored" in their office. Similarly, the past few years has seen increasing adoption of online data backup systems, with professionals trusting well-known vendors to securely store their sensitive client information.