From the January 2013 issue.
Technology has changed rather dramatically since we started the Readers Choice Awards seven years ago, and certainly since this publication was initially started in 1991. Perhaps not as dramatic as the invention of the printing press, but when it comes to workflow processes and always-available access to personal and client data, there has been a significant transition.
In 2006, the first year of the Awards, there was no iPhone. iPad or tablet? Not a chance. The word smartphone wasn’t in our vocabulary. Most software was designed to be installed on a firm’s file server or desktop computers. For tax and accounting professionals, paperless was the “next big thing.”
Fast forward, and it seems like everybody has a smartphone or tablet or both, in addition to their laptop or ultrabook. Almost every software program is being designed in a version for the web, or only for the web. Online collaboration is the norm. Paperless is now only a component of the broader picture of firm workflow and automation.
Those are but a few of the changes that have affected the profession, and they’ve all been chronicled in our yearly survey, where we give readers the chance to tell everybody else which technologies, services and companies they love and trust. Whether programs that help them provide service to clients, or tools for running back office functions in their firm. The Awards voting is not scientific, but just a snapshot of a product or vendor’s popularity.
Technology and vendors succeed in these awards by helping firms and small businesses in real-work situations, helping professionals be more productive, efficient and profitable. With 2013 about to get underway, and the 2012 tax season a few weeks after that, now’s a good time to do a more measured assessment of your own practice and technologies by taking the free Productivity Survey (www.CPAPracticeAdvisor.com/productivity). It helps measure a firm’s workflow practices and use of technology, provides benchmarks to see how you do against your peers based on firm size and location, and also offers suggestions for improvement.
Thank you to the more than 2,000 tax and accounting professionals voted in this year’s Awards. And thank you to the readers of CPA Practice Advisor and NSA Practice Advisor. Here’s wishing you a wonderful holiday season and an increasingly productive and profitable new year.
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Federal/State Income Tax Compliance
Insight: Drake Software has led this category every year that we’ve had the Readers Choice Awards. Although their all-inclusive professional tax system holds about 10% of the overall market, it has a loyal base of users who often commend the company’s service, the program’s ease-of-use and its everything-included package. Thomson Reuters received the second highest number of votes this year, followed by Intuit ProSeries, CCH ProSystem fx Tax and Intuit Lacerte. Rounding out the top vote recipients were CCH Small Firm Services ATX and TaxWise, and the TaxWorks program.
Specialty Systems & Tax Prep Tools
Insight: Sometimes professionals want a utility or program that’s designed for a specific tax-related issue that either can’t be handled by their tax system, or that can be better managed with a specialty program. This year’s winner, SurePrep, is used in conjunction with many tax systems to provide tax document and workflow automation. Number two on the list, Beyond415 is designed for managing IRS notices.
- SurePrep 1040SCAN – 48.5%
- New River Innovation Beyond 415 – 24%
- Bloomberg BNA 709 and 706 Preparer – 16%
- DynaTax – 8.5%
- Others: 4%
Tax Planning Systems
Insight: Many professionals offer proactive tax planning services to their 1040 clients, and while tax preparation programs can offer basic planning options, more advanced features are found in systems that are often an add-on to their tax package. These provide planning capabilities for up to decades, in some cases, with all future planned phase-ins and phase-outs, financial ratios and other tools. As with the tax preparation systems, Drake Software received the most votes because of its loyal customers.
- Drake Tax Planner 35%
- Thomson Reuters Planner CS 16%
- Intuit Lacerte Tax Planner 11%
- CFS Tax Software – TaxTools 9%
- Bloomberg BNA Income Tax Planner 7%
- CCH ProSystem fx Planning 5.5%
- PPC Individual & Business Tax Planning Libraries 5%
- RedGear TaxWorks Tax Planner 4.5%
- Tax Coach 2%
- Others: 5%
Tax & Accounting Research Systems
Insight: It seems that major tax law changes come into effect, or phase-out, every year. Professional research systems are a necessity for virtually all firms, particularly those with more complex clients. New at the top of this year’s list is “TheTaxBook,” which is available in print and online. It was followed by Thomson Reuters’ research solutions and systems from CCH and Intuit.
- Tax Materials Inc – TheTaxBook 27%
- Thomson Reuters Checkpoint & QuickFinder 25.5%
- CCH IntelliConnect, TRN & ARM 13.5%
- Intuit Tax Research & TaxAlmanac 12%
- PPC Federal Tax Compliance 6.5%
- CFS Tax Research 4%
- Bloomberg BNA Financial Accounting Resource Ctr. 3.5%
- Tax Analysts 2%
- Lexis Nexis 1.5%
- Tax Analysts 1.5%
- Others 3%%
Estate Planning Systems
Insight: Many tax and accounting professionals help their clients with generational wealth transitions. Whether they do so individually, or in conjunction with a tax attorney, these services are integral to reducing tax liability through strategic planning. This is a small specialty service within the accounting profession, and that is reflected in this year’s voting, with only about 20 percent of readers selecting a preference.
- Thomson Reuters ONESOURCE 30%
- Bloomberg BNA Estate Planner & Gift Tax Planner 25%
- CCH ViewPlan Advanced 20%
- Thomson-West Intuitive Estate Planner 15.5%
- Others Combined 9.5%
Insight: For a very small business, handling year-end compliance is pretty simple: Just a few W-2s and perhaps less than a dozen or so 1099s. But when a business grows in staff size or relies more heavily on contractors, especially in some industries, the year-end compliance process can be burdensome and, with hundreds or more forms to send to employees, contractors and agencies, opens the business up to significant penalties for errors. Add in frequently changing employment tax laws, and having a powerful, automated W-2 and 1099 preparation system is a must. As in previous years, voters strongly favored the affordable, easy-to-use AMS 1099-Etc system, followed by Avalara’s AvaTax 1099, CFS Tax Software and the Payroll Compliance and Reporting solutions for ATX and TaxWise.
Insight: Businesses of any size can get into big trouble financially and even criminally for not collecting and remitting sales taxes. Sometimes they don’t know they have an obligation in certain areas, other times they simply misunderstand or incorrectly make their filings. With states pinching pennies and leaving no stone unturned to look for income, the result of errors isn’t worth it. While simple, single-location businesses often can get by using their state’s tax reporting website, companies with high volumes and/or sales in multiple jurisdictions absolutely need a more automated solution. And for firms that serve multiple clients, a system that streamlines these functions across multiple entities is a must. This year, Vertex and two Avalara systems top the list of programs for sales and use tax reporting, followed by the websites of state agencies, eFileSalesTax.com and CFS Tax Software.
Sales & Use Tax Exemption Certificate Management
Insight: For businesses dealing in sales to tax exempt entities, reporting is still a necessity, as is managing and maintaining copies of their exemption certificates. While these programs aren’t as widely used or recommended by accounting professionals, business in some industries rely on them to keep their reporting organized and automated. As with last year, Avalara’s AvaTax Certs was the clear favorite, with systems from Thomson Reuters and Vertex following.
- Avalara – AvaTax Certs 65%
- Thomson Reuters – ONESource Exemption Certificate Mgmt. 22%
- Vertex Inc. – Exemption Certificate Manager 9%
- Others 4
Insight: Bookkeeping, journal and ledger management, correcting transactions, recurring transactions, after-the-fact payroll and financial reporting… These are the core functions of write-up, and they aren’t going away. Strong multi-client write-up systems are still a staple in professional accounting firms, with most practices using Accountant version of QuickBooks, whether because they favor it or because most of their clients are using other versions of QuickBooks, which makes data transfer generally simple. However, there are still many alternatives on the market. Following QuickBooks this year are Thomson Reuters and PC Software Accounting Inc..
- Intuit QuickBooks Accountant 57%
- Thomson Reuters Accounting CS 18%
- PCSAI Client Write-Up 17%
- Others Combined 8%
Insight: Trial balance is a core part of the bridge between financial management and taxes, and the market for trial balance systems continues to be dominated by a few key vendors. In this year’s voting, Thomson Reuters’ Trial Balance CS was by far the favorite, with CCH’s ProSystem fx Trial Balance and CCH Small Firm Services’ ATX & TaxWise Trial Balance systems following
- Thomson Reuters Trial Balance CS 61%
- CCH ProSystem fx Trial Balance 19.5%
- CCH Small Firm Service ATX & TaxWise 15%
- Others 4.5%
Insight: For firms that provide audit services, significant attention must be devoted to managing processes and checklists. Engagement management systems are designed to streamline these functions, providing increased productivity, heightened managerial insight, and stricter controls. In this year’s voting, Thomson Reuters was again the favorite, followed by systems from CCH and CaseWare.
Insight: In addition to systems designed for managing audit engagements, firms also often use specialty audit tools that aid in various tasks required during engagements. Some of the programs work well with each other, and they are not necessarily competitive, so voters could select more than one. The leaders were Thomson Reuters’ PPC SMART Audit Suite, Confirmation.com from Capitol Confirmation, and CCH’s Knowledge-Based Audit tools/Knowledge Coach.
- Thomson Reuters PPC SMART Audit Suite 49%
- Capital Confirmation Confirmation.com 21%
- CCH Knowledge-Based Audit tools/Knowledge Coach 18%
- Others 12%
Insight: More and more firms are taking back their client payroll, because new programs, most of them web-based, are making managing payroll much more automated, less tedious and a better revenue stream than it once was. Plus, it strengthens the client relationship and helps them avoid potential penalties. There are so many payroll systems on the market, but our readers definitely have their favorites. Once again this year, the After-the-Fact Payroll system from AMS was out in front, followed by QuickBooks’ Payroll Enhanced for Accounting Professionals, Thomson Reuters’ Accounting CS Payroll, Intuit Online Payroll, PayChex and RUN, Powered by ADP.
Budgeting/Forecasting & Business Intelligence Tools
Insight: Professionals often turn to specialty programs for various engagements, particularly financial reporting, cash flow management, business planning and benchmarking. In this year’s voting, readers selected Thomson Reuters Financial Analysis CS as number one, followed by Sageworks ProfitCents, Sage Business Intelligence and Active Planner, CCH ProSystem fx Profit Driver and Tableau Software’s business intelligence solution.
- Thomson Reuters Financial Analysis CS 36%
- SageWorks ProfitCents 26%
- Sage Business Intelligence and Active Planner 17.5%
- CCH ProSystem fx Profit Driver 9%
- Tableau Software 6%
- Others Combined 5.5%
Insight: Knowing the proper value of a business is especially important when planning on sales, transfers or other transitions, and sometimes when a client is involved in litigation. While this is a smaller specialty service offered by a smaller set of professionals, it is one that still requires advanced systems to help manage all of the potential variables in determining accurate values.
- Thomson Reuters PPC Business Valuation Specialist 39.5%
- ValuSource Express Business Valuation 22%
- NACVA Business Valuation Manager Pro 16.5%
- MoneySoft DealSense Plus+ & Corp. Valuation Professional 13.5%
- Others: 8.5%
Insight: As a firm grows, its partners and senior managers need to keep track of a broad range of issues, ranging from top level growth and business metrics, to client WIPs, AR and project budgets. This year, we separated Practice Management systems, which take a broader view of firm activity, from systems designed for Time & Billing, which generally are geared toward invoicing and AR management in professional firms. Thomson Reuters’ Practice CS was the leader in this category this year, followed by CCH’s ProSystem fx Practice Management, AccountantsWorld’s Practice Relief, Commercial Logic’s APS and CaseWare.
Insight: Once again, we separated this section from Practice Management this year to better reflect the different focus of the product genres. Time and billing systems do more than just invoicing, they help firms manage many areas of projects and client collaboration, with increasingly mobile time, expense and document tracking functions. This year’s leader was the popular BillQuick system, followed by Timeslips, Office Tools Pro, ImagineTime and TPS Software.
Time Tracking & Attendance Tools
Insight: In addition to the overall management of time, invoicing and AR, there are many systems designed as an add-on or simplified time tracking or attendance tool for either firms or, more often, business clients. QuickBooks Time Tracker once again came in first, followed by systems from SwipeClock, Wasp Barcode, Chrometa and B2Bee.
- QuickBooks Time Tracker 63%
- SwipeClock 17%
- WaspTime 8%
- Chrometa 4.5%
- B2Bee 2.5%
- Other Misc Products: 5%
Insight: Many small and mid-sized businesses, and accounting firms, are adopting online invoicing systems. These programs can help streamline billing functions on both the AR and AP sides, while removing paper-based errors from the equation. Mobile solutions can also help small businesses compete by accepting credit and debit payments. This can also save time otherwise wasted taking checks (which can often be fraudulent) to the bank. Bill.com led in voting this year, followed by Intuit Payments, Sage BillingBoss, Freshbooks, Xero and Bill & Pay.
Insight: As more and more Americans are mobile and are comfortable with online banking and transactions, portals are increasingly a competitive requirement for professional firms. Clients can access and upload or download documents, allowing them “visit” you on their schedule. It’s also a much safer alternative than unsecured email. In this year’s voting, Thomson Reuters’ NetClient CS Portals took the most votes, followed by eFileCabinet, ShareFile and CCH’s ProSystem fx Client Portals.
- Thomson Reuters NetClient CS Portals 29%
- eFileCabinet Secure Drawer 16%
- ShareFile 13.5%
- CCH ProSystem fx Client Portals 12%
- Intuit Document Exchange 7.5%
- Microsoft SharePoint 7.5%
- AccountantsWorld CyberCabinet%
- SmartVault 4.5%
- All Others Combined: 4%
Document Management & Document Storage
Insight: Once again, this category was the largest in this year’s Readers Choice Awards voting, with 47 products represented. They range from simple file folder programs, to systems designed for large enterprises with options for managing retention, client collaboration functions and automated workflow. The top vote-getter was the Drake Document Manager, which is included in Drake Software’s Tax system, and voters are always supportive of the program and the company. Following it were systems from Thomson Reuters, Intuit, eFileCabinet, TaxWorks, SmartVault, CCH and AccountantsWorld.
- Drake Document Manager 32%
- Thomson Reuters FileCabinet CS & GoFileRoom 23%
- Intuit ProSeries & Lacerte 10.5%
- eFileCabinet 9.5%
- TaxWorks ArkWorks 8%
- SmartVault 6%
- CCH ProSystem fx Document 5.5%
- AccountantsWorld 3%
- Others 2.5%
Document Management Utilities
Insight: There’s more to paperless than just managing documents, and therefore there’s a market for additional tools and apps that help with other workflow processes. These often include hardware, specifically scanners. Once again this year, Fujitsu reigned over the voting in this category, followed by HP, Canon and the Tic-Tie-Calculate program.
- Fujitsu 45%
- HP 16%
- Canon 13%
- Tic Tie Calculate 11%
- Nuance 7%
- Kofax 6.5%
- Others 1.5%
Tax Document Automation
Insight: For tax engagements, the biggest technological shift is in getting client source documents digitized as early as possible, where they can be organized into electronic workpapers and the data can be extracted and automatically put onto a client’s return. Time saved equals more clients, which equals more revenue… a no-brainer for tech-savvy practices. Of voters selecting a preference this year, Intuit’s Tax Import for Lacerte & ProSeries was once again the leader, followed by systems from SurePrep, Thomson Reuters, CCH and GruntWorx.
- Intuit Tax Import for Lacerte & ProSeries 33%
- SurePrep 1040Scan Pro, 1040Scan Organize 26%
- Thomson Reuters Source Document Processing 14.5%
- CCH ProSystem fx Scan 10%
- Copanion/Drake GruntWorx 7.5%
- CCH Small Firm Services ATX & TaxWise PaperlessPLUS 6%
- Others 3%
Comprehensive Workflow Management Systems
Insight: What exactly is workflow? Well, every firm has a different definition and model, but there are best practices and workflow systems are designed to help ensure that they are followed, while still following specific firm standards, and streamlining all kinds of engagements. We’ve divided this into two groups: Comprehensive, End-to-End Workflow, which is designed for larger practices; and Other Workflow Tools, which are designed for aiding in specific tasks and engagements.
- OfficeTools Pro 31%
- XCM Solutions 26%
- Thomson Reuters FirmFlow 18%
- CCH ProSystem fx Workstream 17%
- Autonomy iManage 4.5%
- Others 3.5%
Other Workflow Tools:
- eFileCabinet 25%
- Thomson Reuters Practice CS & GoFileRoom 16.5%
- Drake Software Document Manager 16%
- Intuit Lacerte & ProSeries DMS 12%
- Bill.com 10%
- Treeno 8%
- CCH ProSystem fx Scan and fx Document 7.5%
- Others combined 5%
Website Builders & Services for Accounting Firms
Insight: If you don’t build it, someone else will… and potential clients will see that firm instead of yours. Whether you are actively seeking new clients or not, a firm’s website is an essential and generally inexpensive tool for keeping your brand out there. Emochilla, recently acquired by Thomson Reuters, led this year’s voting, followed by the loyal Drake users and RootWorks, which offers website services along with business consulting to CPA practices.
- Emochila Websites for Accountants 23%
- Drake 1040.com Preparer Sites 19.5%
- RootWorks 16%
- Service2Client CPA Websites 8.5%
- CCH ProSystem fx SiteBuilder 6.5%
- Intuit Websites 6%
- GetNetSet 6%
- AccountantsWorld Website Relief 5%
- CPASite Solutions 4.5%
- Others 5%
CLIENT SIDE ACCOUNTING SYSTEMS
Insight: As professionals know quite well, their business clients often seek their advice for more than just bookkeeping, write-up, payroll and tax services. These entrepreneurs ask for recommendations on other aspects of their business, from managing growth, helping trim waste, planning for expansion and many other areas. And when it comes to what technologies they should use to run their business, especially their bookkeeping, they most frequently ask their professional accountant.
In this year’s voting on technologies for small businesses, the tax and accounting professionals who read our publication once again overwhelmingly chose various QuickBooks versions for different types of client verticals. This isn’t because the professionals are benefitting directly, but the choice of program that clients use does affect the firm, mostly through simplified data transfer. If most clients are on the same system, it also makes it simpler to support them during write-up and other services.
Small Business Accounting - Installed Programs
- Intuit QuickBooks Simple Start, Pro or Premier 62%
- Sage 50, 100 or 300 – 11.5%
- AccountantsWorld 7%
- A-Systems 5.5%
- Cougar Mountain 5%
- CheckMark 4%
- MYOB 3.5%
- Others 1.5%
Small Business Accounting – Web-Based
- QuickBooks Online 62%
- Thomson Reuters Client CS 10.5%
- Sage One 6.5%
- NetSuite 6%
- Xero 5%
- Freshbooks 3.5%
- Intacct 3%
- Others 3.5%
- Intuit QuickBooks Premier Construction Edition 63%
- Sage Construction & Real Estate 50/100/300 ---- 15%
- Microsoft Dynamics 8%
- Cougar Mountain 4.5%
- ISS Construction Manager 3%
- Others Combined 6.5%
QuickBooks/Small Business Paperless Add-Ons
- Bill.com 51%
- SmartVault 25%
- Papersave.com 6%
- Personable Inc. 5.5%
- Cabinet NG 4.5%
- Others 8%
GENERAL BUSINESS TECHNOLOGIES
ASP/Hosted Solution Providers
Insight: Virtually every software program that a business or accounting firm uses can be turned into a web-based system simply by having it hosted by an Application Service Provider (ASP). This lets users continue to work in the program they are used to, while also relieving them of the headaches of IT functions and program updates.
- Right Networks
- Real Time Data Services
Insight: Just as many firms partner with a local legal practice or other professionals for certain areas of client work, many are starting to use the services of other companies that specialize in handling certain areas of practice functions. These providers range from ASPs to virtual servers, digital fax systems, email management and even tax form preparation.
Laptop and Desktop Computers
Insight: What brand of computer do our readers prefer? Dell holds the lead again, with HP following and Apple moving into third.
- Dell 35%
- HP 21%
- Apple 10.5%
- Toshiba 10%
- Lenovo 6%
- Compaq 5%
- Gateway 4.5%
- Sony 3%
- IBM 2.5%
- Others 2.5%
Insight: The rise and fall of the BlackBerry has definitely been shown over the years of our Readers Choice Awards. From being in a strong first place only a few years ago, the brand has now fallen to a distant third, behind the king iPhone and Android devices.
Insight: Tablets started out as mostly fun entertainment devices, but they have quickly become a light-duty replacement for some laptops, providing work applications and mobile access to professional data without having to squint at a smart phone screen. The iPad continues to rule here, as well, but several other brands are strong with our readers.
Printers & Scanners
Insight: These devices are integral to all firms, especially as they continue to digitize and take everything paperless.
- HP 41%
- Brother 15%
- Fujitsu 12.5%
- Canon 9.5%
- Dell 7%
- Xerox 4.5%
- Epson 3.5%
- Lexmark 3%
- Others 4%
Insight: Sometimes we shop for office supplies online, but most small businesses and accounting firms still shop in physical stores.
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Insight: Everybody’s more mobile it seems, or at least have more options for remotely accessing work and entertainment via phones and tablets. Yet, as mobile as we are, speaking personally at least, I don’t seem to get the exercise I know I should. Our readers seem to agree.
New Technologies for Professional Firms
Technology continues to shape the modern tax and accounting professional, and certainly is helping firms be more productive and profitable, as they can get more done and serve more clients, on more profitable engagements. Thank you to the more than 2,000 voters who took the time to share their views in the 2013 Readers Choice Awards. As always, let us know if there are any additional programs or technologies you think would be a fit for the awards.
Here’s to a successful new year in 2013!