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2007 Review of Engagement & Trial Balance Systems

Engagement and Trial Balance systems can be the heart of a full-service accounting firm, and advanced systems can help a practice improve efficiency. In any engagement, there are specific workflow processes, which can be streamlined using Engagement management systems. On the Trial Balance side, increased efficiency and productivity can be achieved by doing more than just electronically handling the grouping and adjustment of GL account information, but also taking advantage of tools and features that promote collaboration, standardization, accuracy and communication.

From the August 2007 Issue

Improving engagement efficiency is a topic of huge importance to accounting
firms. In every part of the country, staff resources are scarce, and costs are
escalating rapidly.

When you are assessing opportunities for improving engagement efficiency,
start with the big dollars first. This means identifying the services that produce
the most revenue for the firm as well as the tools that can help the high-value
firm members
do their jobs faster. For many firms, financial statement preparation and business
tax returns are the core services offered. Additionally, these are relatively
complex services and are performed by the highest costing firm members. Since
these services generate high revenues and have high costs, they are good candidates
for getting a good return on your efficiency improvement efforts.

Almost every firm has experience using some sort of electronic tool for manipulating
the client’s general ledger balances that serve as the basis for financial
statements and business tax returns. The problem is that many firms are doing
nothing more that electronically handling the grouping and adjustment of GL
account information. They are not taking advantage of the tools and features
that promote collaboration, standardization, accuracy and communication that
can make a huge difference in engagement profitability.

  • The first step on the road to improved efficiency is to evaluate your firm’s
    current business processes for handling these types of engagements. Typically,
    you will find that different team members will be handling similar processes
    differently. So your first opportunity is to standardize processes, wherever
    it makes sense. Some words of warning: Many firms will try to build one single
    process that will be applicable to all financial statement/business tax engagements.
    Watch for opportunities to create different “standards” for different
    types of services. This approach will result in fewer “not applicable”
    steps and, therefore, less training and less review time.
  • Next, train team members on the new standard approaches. Emphasize training
    here. While education is important in gaining the knowledge to set the standards
    (and continuing education is critical to continue the process), team members
    should clearly understand the steps, workpapers, formatting rues, sign-off
    procedures, etc. that have to be followed.
  • Third, look for integration and template opportunities.
    Features that allow you to create information in a particular form and then
    re-use it on future or similar engagements are important. Three of the vendors
    in this article — CCH, Intuit and Thomson Tax & Accounting —
    are in the process of developing suites of tools that exchange data with a
    high degree of automation. Additionally, there are also many opportunities
    to create information in an application from one vendor and then use it in
    another vendor’s package. Best-of breed tools can trump suites in many

Engagement & Trial
Balance Systems

Key Features/Capabilities:

  • Workpaper management and workflow functions.
  • Data import, export and integration capabilities.
  • Dynamic data that automatically updates information in other
  • Financial statement creation functions.

Firms Should:

  • Evaluate their engagement processes.
  • Determine workflow needs and whether an integrated package would
    be best.
  • Look at the other tools available in a vendor’s suite
    of products.
  • Implement new collaboration and review processes that can substantially
    improve engagement efficiency.

This year, this article has separate evaluations for engagement workpaper applications
and trial balance tools. This was done to acknowledge the significant differences
between the two types of tools. Some firms may need trial balance features but
not the engagement management and collaboration tools found in workpaper tools.
The new evaluation format will provide a more accurate evaluation of the applications.
The following five elements of workpaper applications have been considered in
this review:

Ease of Use: In the context of a workpaper application,
ease of use is a very relative term. The work process of performing a financial
or business tax engagement is complex. Many steps, a lot of information and
multiple team members are involved in the process. The tools required to perform
these types of services in an electronic environment require planning, training
and constant review in order to be used in an effective and efficient manner.

Data Import/Export/Integration: Using detailed information
from a client’s system is a requirement of every financial statement
and tax preparation engagement. If it is easy to do, pulling the data electronically
costs a lot less in resources than having it manually keyed. Additionally,
a product’s features for using this information with other applications,
either through an export process or by directly linking to other systems,
has a lot of value.

Trial Balance Features: Creating, grouping and adjusting
a trial balance is the cornerstone for creation of the financial statement,
tax return and the documents that support these products. Features that make
it easy to create, review and edit the trial balance can make a substantial
difference in efficiency.

Financial Statement Preparation: In many firms, the creation
and formatting of financial statements is almost an art form. The problem
with this is that quality art carries a high cost. Systems that have features
that promote the standardization and preparation of complete high-quality
financial statements offer many firms an opportunity to greatly improve on
their current processes in this area.

Engagement Process Features: This is the big one. Workflow
technology is one of the hottest technology areas in today’s accounting
firm. An increased awareness of the benefits and possibilities combined with
the critical resource shortages most firms face have gotten firms thinking
about how to use technology tools to implement or modify existing processes
to increase engagement efficiency. Because the Engagement Process Features
are not relevant to the stand-alone trial balance applications, those particular
products have not been evaluated in this area.

– – – – – – – – – – – – – – – – – – – – – – – – – – –

Caseware International- Caseware
Working Papers
CaseWare has an outstanding history of providing
trial balance, financial statement and workpaper creation functionality.
The company introduced new features in 2007 that improved engagement efficiency,
strengthened document security, and streamlined creation of electronic
CCH, a Wolters Kluwer business
— ProSystem fx Engagement
ProSystem fx Engagement is part of CCH’s
ProSystem fx Office suite of products. Engagement provides a
complete workpaper solution for preparing business tax returns, financial
statements and other types of services.
Thomson Tax & Accounting
— Engagement CS
Engagement CS from Thomson Tax & Accounting
provides “work-in-process” capabilities for performing paperless
financial statements and business tax preparation services. The product
combines trial balance, professional guidance, engagement collaboration
and workflow, and offers integration with other applications in the vendor’s
CS suite of products to support financial statement preparation and tax
preparation engagements.

CCH, a Wolters Kluwer Business
— ProSystem fx Trial Balance
ProSystem fx Trial Balance is the stand-alone trial
balance application in the CCH ProSystem fx Office suite. Its
strengths lie in its presentation of data, its setup features, and its
DynaLink capability to ProSystem fx Tax.
Pendock Mallorn Ltd. —
Accounting for Practitioners
Accounting For Practitioners (AFP) is designed
for small to midsize firms that have up to 15 users. It provides the basic
functionality for taking a client’s chart of accounts, adjusting
the balances, and grouping the information for the preparation of financial
statements and tax returns.
Thomson Tax and Accounting —
Trial Balance CS
Trial Balance CS is the trial balance product from
Thomson Tax and Accounting. It does a good job of handling all the basics,
including import of client information, financial statements preparation,
tax return groupings, and the production of many trial balance-related
Intuit — Lacerte Trial
Balance Utility
In mid-July, just as this article went to press,
Intuit released a new component to its Lacerte Tax application, the Lacerte
Trial Balance Utility.