In-Firm Workflow Opportunities
With a primary focus on servicing clients and chargeable hours, many firms seldom have adequate time to focus on identifying optimal production practices, standardizing them, and providing training to all their firm members.
SCANNING TOOLS
Today’s production scanners and front-end scanning applications streamline the upfront organization of client source documents by allowing the majority of them to be organized electronically, utilizing administrative personnel instead of higher-priced professional staff. Firms should begin implementing tools such as Thomson Reuters ScanFlow and TaxSort, SurePrep 1040SCAN, Copanion GruntWorx/Intuit eSort, CCH ProSystem fx Scan, or CCH Small Firm Services Scan&Fill now so they will be positioned to use them optimally during the next busy season.
All these products are on the cusp of not only recognizing the documents, but also capturing standard data from W-2s, 1099s, K-1s and brokerage statements and placing them into the tax application, which will save time on keying and verifying information in the future. The real benefit to firms in the future is that between one-third and one-half of the tax return data will be entered and verified before the review process begins, which will save firms time where they traditionally are the most overwhelmed. (See www.CPATech Advisor.com/go/2412 for more information about this topic and available products.)
DIGITAL BILLING
Top time & billing systems allow for seamless daily time entry, posting and on-screen billing, but then firms print out and mail the invoice on a month-end basis, which takes more manual handling and delay. Firms should look to create digital invoices and deliver them via a portal or secure email with client projects. Many practice management and time & billing products allow this to be completely automated through the emailing of a PDF to the client’s accounts payable person. With everyone concerned about collections this summer, daily billing and credit card payment capabilities will streamline this, as well, so there will be a huge amount of interest in implementing “hotel” type billing.
ACCOUNTING INTEGRATION
Most firms today are using an audit document container application to organize their files, but they may not be optimizing the other products within their vendor’s application “suite.” Tax groupings should be utilized within the audit binder so that the required tax data can be easily exported to the tax return. Using the same fixed asset product within your tax and audit suite will also streamline the import of depreciation information without rekeying. While no one makes money in the short run switching depreciation products, in the long run it will pay off as data does not have to be rekeyed or reconciled.
AUDIT UTILITIES
Firms still doing manual confirmations know there is a significant amount of handling and follow-up required, and many banks are no longer taking calls from auditors. These confirmations can be automated via web-based tools such as Capital Confirmation (see page 16) and AuditConfirmations (see page 13), which are easy for audit teams to use even though they spend most of the time in the field. For sampling client data and performing analytic procedures, many firms still test data manually. Since most firms have Excel expertise, and most accounting applications will export natively to an Excel file, this becomes the natural meeting point for auditing via digital means on the computer.
To assist with more complex analysis and extractions, tools such as ACL and CaseWare IDEA have long been utilized, but an application called ActiveData brings many of their high-end capabilities to an Excel platform for a fraction of the cost. With the ongoing transition to Excel 2007, which can handle files with more than one million rows, larger and larger files can be exported, making this an attractive competitive product that firms will actually use.
EXPENSE MANAGEMENT
For completing expense reports, many firms still utilize physical or Excel spreadsheets that must be rekeyed into the firm’s practice management or time & billing systems. Today’s practice management tools allow for the expenses to be entered directly by the employee who would then utilize the form from time & billing for attaching receipts and getting approval. More advanced firms scan receipts and route them electronically. For paying expense reports, firms should include them within payroll (direct deposit) as non-taxable items so they don’t have to print, deliver and track these miscellaneous checks … and so the auditors don’t have to take the time to run to the bank.
