If anyone ever needed more proof of the dynamic world in which we live, 2008
has been perhaps one of the best examples in decades. With hurricanes, a tumultuous
financial market and an historic election, we’ve gotten more than our
share of change lately.
In addition to these notable, perhaps seismic, social events, the year 2008
has also provided us with notable events in technologies that hold the promise
of reshaping workflow practices in professional tax and accounting firms. While
most of these new innovations have been under development for years, the widespread
adaptation of them in the profession shows that tax professionals and accountants
aren’t as curmudgeonly regarding technological advance as many observers
Year-in-Review & Executive
Mike Sabbatis, President – CCH,
a Wolters Kluwer business
Shafat Qazi, CEO and
Founder, BQE Software Inc.
Jeff Gramlich, President,
CCH Small Firm Services (SFS)
The most notable of these new technologies are part of the larger movement
toward greater efficiency in the public practice, with “workflow optimization”
being the key defining phrase. In this arena, we’ve seen the near universal
addition of scan-and-fill and scan-and-populate technology to professional tax
preparation systems. These utilities take much of the manual data entry out
of tax preparation by automatically detecting forms and using optical character
recognition (OCR) technology to extract data, which is then routed to worksheets
or the actual form in the professional’s compliance system. These programs
were also accompanied by more robust workpaper automation systems that help
to reduce the tedious work involved in organizing and bookmarking client documents.
The next step in the process, then, was implementing data management systems
that offered intelligent control over data in a manner that promoted integration
with the other programs a firm uses to service clients. As such, document management
systems also continued to grow in professional use, with expanded capabilities
far more advanced than systems that simply store documents.
But as professional practices continue to adopt these paperless technologies
and evolve into truly digital environments, major changes to workflow processes
are necessary in order to provide senior staff with productivity management
and the ability to ensure practice efficiency. In a digital office, old methods
of managing engagements are no longer applicable; the way review functions are
processed is inherently different; management functions have changed. In short,
the paperless revolution has brought new challenges and new opportunities to
further increase productivity and enhance efficiency.
As Executive Editor Gregory L. LaFollette, CPA.CITP, noted regarding our annual
Tax and Accounting Technology Innovation Awards, “The movement toward
the paperless accounting and tax practice, which professionals have been undertaking
for nearly a decade, is well on its way to completion. The next step in the
continuing evolution of the professional digital environment is rethinking workflow
processes to maximize productivity, and each of the products selected for awards
this year approaches various workflow processes with the goal of streamlining
tasks and management functions.”
The 2008 Innovation Awards highlighted a new genre of workflow management
systems that are geared precisely along LaFollette’s comments, by helping
professional firms harness the power of all of these paperless technologies
by reorganizing their workflow processes into more efficient models. The workflow
optimization process will be a continuing evolution, just as the movement toward
paperless processes was, and continues to be. But the profession has reached
the point where it is looking at the larger paradigm from a top-down perspective,
with a keen eye on overall productivity.
We’ve also gotten a glimpse of the technologies that tax and accounting
practices will be using in the near future. While some early adopter firms have
already started implementing virtualization and cloud computing, most have yet
to see the considerable benefits they will provide. With virtualization, servers
and desktops can be set up to run multiple operating systems, which allows professionals
to continue to use older programs that may not work with Vista or XP. This can
also help reduce the number of servers required by a firm, which cuts IT costs.
The promise of cloud computing lies in the tangible benefits we’ve already
seen through Web 2.0. In essence, the philosophy of cloud computing is the same,
with programs and data accessed online, which also reduces IT requirements in
a practice, and gives firms the ability to scale up by instantly acquiring more
storage or processing capabilities.
In 2008, we also saw Apple’s iPhone, barely entering its second year
on the market and newly upgraded to a 3G version, continue its rapid ascension
and become the top-selling mobile phone. But the competition has joined the
touch-screen market, and the fight will rage on for the business-oriented smart
phone market as Microsoft and BlackBerry continue their development efforts.
On a few other technological fronts, the profession was reintroduced to “greenbar,”
but not the paper variety. The new website security feature provides an easily
recognizable reference for users. And Microsoft introduced a surface computing
platform that some think may lead to a wide array of touch-based interfaces
for personal and professional work environments.
Looking back on the innovations of the past year, the significant advancements
in technologies available and being adopted by professionals is remarkable.
But being able to foresee major advancements and their likelihood of success
is a challenging feat that technology vendors must continually undertake. Just
as prudent tax or financial planning can help a client be more fiscally prepared
for future developments, being able to identify the underlying trends in the
accounting profession, understanding the broader landscape of the business market,
and seeing potential opportunities before they arise are the keys to continued
innovation and the success of the tax and accounting profession.
Reporting on new technologies and their potential benefit to public practices
is our job here, but the greatest challenge is in predicting what the profession
will look like tomorrow. In the following pages, several prominent technology
leaders offer their views of the past year and what to expect in 2009. One thing
you can be sure of is that the new year will bring change. But what kind? For
change is not inherently good or bad until it has a direction. To provide positive
results, it must be meaningful and intelligently applied in order to reap its
promised benefits. n
CCH, a Wolters Kluwer
business — 2008 Year in Review & Predictions
|Mike Sabbatis, President –
CCH, a Wolters Kluwer business
Mike Sabbatis is the President of CCH, a Wolters Kluwer business and a leading
provider of tax, accounting and audit information, software and services. At
CCH, Sabbatis leads the U.S. tax, accounting and business in serving as a strategic
partner in delivering leading integrated online solutions to professionals to
help them create more intelligent businesses.
During his 28 years in the software, technology and information industries,
Sabbatis has successfully led businesses domestically and globally including
activities in strategic planning, sales, marketing, business development and
consulting. Sabbatis is a featured speaker with a focus on technology, industry
trends, leadership and business effectiveness. He’s presented at industry
conferences as a keynote speaker at the CCH User Conference and at the Wolters
Kluwer Global Leadership Forums. Previously, Sabbatis was the executive vice
president of global sales and marketing for Wolters Kluwer Tax and Accounting
focusing on the US, Canada and Asia Pacific businesses.
CCH continued to set the bar in 2008 with the introduction of innovative new
software and workflow solutions as well as continued record investment in existing
resources. The net result is that CPA firms know CCH is a partner that is focused
on helping them succeed today and in the long-term, as a fundamental part of
CCH delivered several new and enhanced solutions to the ProSystem fx
suite. Across our suite, we continued to expand and drive paperless solutions
with ProSystem fx Scan and Scan with AutoFlow Technology, ProSystem
fx Engagement with knowledge based tools, and ProSystem fx
Document ASP and with e-mail management, which was awarded the prestigious Tax
and Accounting Technology Innovation Award from The CPA Technology Advisor
and the Software and Information Industry Association award as the 2008 best-in-class
document management solution. In ProSystem fx Tax, we delivered more
new releases than ever before — on schedule and to specification —
as we added numerous customer-requested features, such as added electronic filing
capabilities. We also continued to make enhancements to our ASP solutions, including
Global fx, and today among our industry peers, CCH supports more professionals
doing tax return work in an ASP environment than anyone else.
In the sales and use tax area, CCH enhanced CorpSystem Sales Tax Online and
CorpSystem Sales Tax Return Online, both of which were awarded top honors in
The CPA Technology Advisor 2008 review of sales and use tax programs.
For the fourth consecutive year, the Internal Revenue Service also picked CCH
to provide the agency with sales tax data.
Throughout 2008, innovative features and functionality were added to CCH research
tools. For the CCH Accounting Research Manager this included a wealth of enhancements
from knowledge-based audit solutions to e-mail updates. The CCH Tax Research
NetWork also strengthened its role as the leading tax research solution with
its CCH@Hand interface being recognized as a finalist in best solution integrating
content into workflow by the Software and Information Industry Association.
This innovative desktop interface allows professionals to do tax research without
opening a browser or interrupting their workflow. We also continued to significantly
expand our international offerings with our Worldwide Tax Rates portfolio.
CCH was on the forefront in helping firms understand the impact of new regulations,
most notably the federal financial rescue plan that will have an impact on tax,
accounting and audit professionals for years to come. With 2009 bringing new
leadership in Washington and across the states, more legislation will be forthcoming,
and CCH will monitor the issues, analyze the information and embed the knowledge
essential for complying with changing regulation into our software and workflow
As we look to 2009, CCH will continue to lead the industry driven by investment
and innovation, and guided by our customers. This will include innovative evolutions
to our software and research platforms that will be game changing in the profession.
As a strategic partner that helps professionals build more intelligent businesses,
CCH dedicates hundreds of thousands of hours to product development and customer
meetings each year. The result for customers is a partner that understands and
is delivering the software, content and knowledge management that firms need
to be successful year after year.
SURVEY SAYS: TOP 5 TRENDS IN THE ACCOUNTING PROFESSION
I will share with you findings from a nationwide study CCH recently commissioned
on trends in the accounting profession. The CCH Accounting Trends Survey provided
proof that the demands on the accounting profession have changed in unexpected
ways in recent years, driven by increasing regulatory complexity, the need for
specialization, the globalization of businesses and shifting demographics.
We have issued a white paper on the survey findings, which you can obtain
at CCHGroup.com/Trends. Let me highlight five of the trends:
- The need for continued growth is driving greater client specialization
and firm alliances to expand and enhance client service. One-half of firms
report that specialization is important to their future growth and two-thirds
report that their specialized services are growing.
- Increased efficiency and productivity needs require the accelerated adoption
of paperless workflows and technology. The majority of firms believe paperless
processes are critical to their success and most say that their use of paperless
solutions will evolve quickly over the next 12 months.
- Staffing challenges and increased emphasis on a collaborative culture compels
the adoption of knowledge management practices and tools. The importance of
knowledge management is shifting from optional to critical with just one in
five firms reporting they have a knowledge management program today, but 59
percent expecting to have a program within three years.
- Demographics and cross-generational demands are requiring firms to become
increasingly flexible and creative to address staffing issues. Firms are responding
with a range of approaches, most commonly: increasing staff management skills;
using non-CPA administrators to perform task; and allowing more flexible full-time
- Meeting client, firm and employee needs requires anytime, anywhere access
to information and knowledge. No longer a 9-to-5 desk job, firms report that,
on average, 22 percent of their professional staff works remotely to some
extent and nearly one-half expect to see this increase over the next three
Ultimately, the trends identified across the survey reinforce what CCH is hearing
as we work with our customers. The challenge for tax and accounting professionals
is to ensure that they are implementing the right management processes, tools
and workflows to prosper. As a strategic partner, our focus is on providing
firms with the resources to do this successfully.
Software, Inc. — 2008 Year in Review & Predictions
|Shafat Qazi ,
CEO and Founder, BQE Software Inc.
Shafat Qazi is CEO and Founder of BQE Software Inc. Shafat posseses in-depth
knowledge of business management and accounting practices for Small and Medium
size businesses in the Professional Services domain. With over a decade of annual
face-to-face customer visits, time set aside daily for customer and prospect
conversations, and regular participation in conferences, Shafat gains insights
and monitors trends in technology usage and management styles and capabilities.
BQE Software also actively solicits customer ‘Wish List’ items.The
result is new and innovative features, products and services.
Founded in 1995, BQE Software, Inc. released the first version of its flagship
product, BillQuick, in 1996. BQE has subsequently grown BillQuick into a leading
time billing and project management software solution with a user base of over
140,000. BQE develops products for the professional services industry that automates
and optimizes timekeeping, project management and billing processes. The BillQuick
Family can manage time, expenses, projects, billing, reporting and more via
the Web. In addition, time and expenses for off-site consultants, on-the-go
professionals and satellite offices can be managed via Smart Phones, Outlook,
email and PDAs. BillQuick solutions employ advanced technology, such as workflow
automation and fuzzy logic self-learning algorithms. Via Microsoft Access, Microsoft
SQL Express and Microsoft SQL Server, BillQuick serves SMB companies of any
size with robust features, exceptional adaptability, and a time-saving user
interface/interaction design. Current users range from one-man to 5,000-person
organizations. BillQuick integrates with cornerstone SMB applications such as
Microsoft Outlook. Also, BillQuick integrates in real-time with Intuit QuickBooks
Pro, Premier and Enterprise Editions (U.S. and Canadian), Microsoft Office Accounting
and Peachtree Accounting. Integration is also available with QuickBooks Online
Technology will continue to shape our professional and personal lives more
than ever before, and there are several major changes that will occur in the
near-term (4 to 5 years) that will dramatically alter the way we interact with
computers, use programs and even in how we collaborate with other people.
- Software-as-a-Service will replace desktop software in the next
10 years, completely. The rate at which people will transform to
browser-based, or cloud computing, is going to grow exponentially in the next
few years, and will really begin to take off in 2009. It will grow tremendously
from there. The nature of this change is as significant as the boom for the
personal computer was in the 1980s or as e-mail was in the 1990s. As a simple
example, what e-mail did to the fax, SaaS will do to desktop computing.
- As a result of SaaS growing in popularity, PCs as we know them
will fade over the same timeframe. What that means is that the monitor
based PCs, or ePCs/Web PCs as they are commonly referred to, will become the
new standard. With 400-500 GB of simple flash memory on them, they will carry
an operating system and will have the intelligence to synchronize with servers
or cloud-based systems where the actual programs are ran from and all of the
data is stored. Then, either with built-in wireless cards or LAN-based internet
ports, users can log into their familiar personalized desktop, just like they
were on a traditional PC, and instantly get to their applications and data
no matter where they are.
Since there will be no hard drive on these new PCs and the processing requirements
will be far less, the cost of the units will continue to drop considerably
and the size of the PC box will greatly reduce or even disappear, with the
basic computing components located in the monitor. What this new remote computing
paradigm means for professionals and individuals is that there will no longer
be concern for data backups or loss of data, since it will be constantly backed
up to secure and remote servers and will always be available to work with.
- Automation of business processes will boom. Most businesses,
from small to big, are realizing the considerable benefit of automation across
virtually all of their work processes, and they will start to invest significantly
more in automation technologies, perhaps 2 to 3 times more, in the next few
years. More and more businesses have seen the value offered by the productivity
enhancements and efficiency gains of automation, from good email systems,
to exchange-based domains, to popular accounting software and enhanced collaborative
tools like SharePoint. Many of these businesses have just started to wet their
feet, but this area is about to explode in the next few years, with greater
investment in these technologies.
- GPS will combine with time management and billing for user tracking.
This combination will allow businesses to automatically time users
on tasks, so the process of tracking an individual’s activities throughout
the day- where they’ve been and what they’ve done- they won’t
have to fill out time cards or reports since it will be automated. So for
service professionals, for example, who go out to client offices during the
day, all they will have to do is the real work, not the administrative stuff.
Their cell phone will be able to track exactly how long they stayed at an
address, and the software will match the address with the client job and then
record the time for it. So at the end of the day, the worker simply reviews
their time card and adds notes rather than having to fill it in from scratch.
This automation will make the time tracking process much more efficient because
of the GPS technology now freely available in iPhones and other Smart Phones.
- The time for energy-saving and other green technologies is now.
We believe that one of the next major waves of growth for businesses
will be enjoyed by those that invest in green technologies, especially energy-focused
ones. The businesses that service these industries or provide products that
help people work more efficiently and save energy are going to experience
expansive growth, so this is also a good place to look for investment. If
you think about the companies who were first to get on board with internet
technologies back in 1995-1996, well, the green technology sector could experience
the same boom.
- The world is going to get even flatter. The ability for
us to collaborate with other teams around the world is going to become more
and more possible because the countries that did not have the capability a
few years ago are rapidly implementing newer technologies, with broadband
often being available free to homes and businesses. So opportunities for collaboration
with remote companies or offshore companies is going to be astounding. This
is a massive change wherein the playing field is going to level-off even further
in the next few years and more workflow processes that were traditionally
handled locally will increasingly be processed remotely. While this has nominally
been around for a few years, we see it growing exponentially in many new areas
including functions in the legal and accounting professions. The rapidly increasing
and often free availability of broadband access across the world is going
to change the dimension of the working class, shifting it to countries where
the processes can be done more rapidly and efficiently.
- The way we interface with computers is about to dramatically change.
New advancements in touch screen technologies will replace the mouse,
enabling more efficient gesture-based input, where users don’t interact
with their computer by clicking or tapping, but by using gestures like pinching
documents or zooming in with their hands, much like the features on the iPhone.
Moving to this new method will play a huge role in how we interact with our
computers, and therefore cut the steps it takes to do something from perhaps
seven clicks to one single gesture. So we’ll see significant productivity
increases because of these new powerful input devices that allow us to express
through intuitive movement rather than through taps and clicks.
Firm Services — 2008 Year in Review & Predictions
President, CCH Small Firm Services (SFS)
CCH Small Firm Services (SFS) provides tax and accounting software solutions,
research products and training to 50,000 small professional firms throughout
the United States and Puerto Rico.
SFS offers both the ATX™ and TaxWise® complete suite of products,
including complete federal, state and local tax compliance programs, Client
Write-Up, Trial Balance, Fixed Asset and Payroll programs along with Scan&Fill,
a powerful document management program that automatically files many tax documents.
SFS products lead the industry in offering Spanish language solutions to serve
the rapidly expanding Hispanic/Latino market. SFS also provides training and
continuing professional education in a wide range of live and web-based formats
SFS is part of Wolters Kluwer Tax and Accounting.
Jeff Gramlich has been president of CCH Small Firm Services (SFS) since it’s
creation in late 2006. Previously, Jeff was the Executive VP of Business Development
for CCH Tax and Accounting, where he spearheaded a number of key acquisitions
in the U.S., Canada and Australia, including the purchases of TaxWise and ATX/Kleinrock
that led to the creation of SFS. Before joining CCH in 2003, Jeff was with The
Thomson Corporation for five years and with CLR Fast-Tax for 10 years. His tax
career began with Arthur Young. Jeff is a CPA, a member of the Texas Society
of CPAs and the American Institute of Certified Public Accountants. He is also
a Certified Information Technology Professional. He is a graduate of the University
TAX & FINANCIAL PROFESSIONALS FACE A ‘PERFECT STORM’
IN THE YEAR AHEAD
President-elect Barack Obama, supported by overwhelming Democratic majorities
in the House and Senate, promises to make changes that will dramatically impact
tax and financial professionals in the coming year. At the same time, the economic
challenges facing our country mean that many families and businesses will be
financially hard-pressed in the months ahead.
The result will be a “Perfect Storm” of change and challenge for
our industry. The demand for timely and accurate expert advice will be more
acute then ever in recent memory. And the need for up-to-date and cost-effective
professional solutions will grow as tax and financial professionals strive to
provide that advice to their clients.
Consider, for example, just a few of the proposals in Obama’s economic
- Changes in the tax rates, including increases for taxpayers with over $250,000
- At least six new refundable tax credits, including a $1,000 credit for
working families to offset the payroll taxes they pay, a health care credit
for small businesses and a 10% mortgage credit for homeowners.
- Expansion of the existing Earned Income Tax Credit to include more taxpayers
and elimination of all income tax liability for seniors making less than $50,000.
- Elimination of capital gains taxes on investments start-ups and small businesses
while increasing the long-term capital gains tax for higher income taxpayers.
- Expansion of the existing Savers Credit and making it fully refundable.
There’s even a plan to have to have the IRS complete tax returns for
up to 40 million Americans, who would then simply sign the forms and send them
back to the government. The idea is to eliminate the need for those taxpayers
to seek help from tax professionals.
We don’t have a crystal ball that can tell you which of these proposals—or
others we haven’t seen yet—will become law in the year ahead. But
we can tell you to expect many of them to be approved. Our job is to be certain
you’re not surprised. And our goal is to ensure that all of our tax and
accounting solutions include the latest tax law changes and calculations.
We serve nearly 50,000 tax and accounting firms. We understand that these
busy professionals don’t have the time to monitor such a constantly changing
tax environment. They rely on us to keep them abreast of all the new laws and
So we’ll be sharply focused in the year ahead on timely updates to our
two tax compliance programs—ATX and TaxWise. Just as we did this year
with the late-breaking changes in the Alternative Minimum Tax and the mid-season
enactment of an economic stimulus package, we’ll make immediate changes
in our software and proactively alert our customers so they can be sure they
have the tools they need to complete accurate tax returns and to provide up-do-date
advise for their clients.
When it comes to training and continuing professional education, we will offer
timely Webinars so that our customers and non-customers alike can stay afloat
amid this sea of change. You’ll be able to find out about these late-breaking
informational opportunities by checking either www.atxinc.com/training
on the web. If you’d like to be informed of upcoming events, please drop
an e-mail to firstname.lastname@example.org
and we’ll put you on a list for e-mail alerts.
We also know that small firms will have more need than ever for efficient
and cost-effective software solutions. That means programs that “talk”
to each other and exchange client information so that financial professionals
don’t have to spend their time re-keying data.
Our unique Scan&Fill program is the first step toward a paperless office.
Using state-of-the-art optical character recognition technology, it “reads”
W-2s, 1099s and other tax forms, then creates a client folder and automatically
files those forms.
And our Client Write-Up suite, including a live payroll module, import client
data from QuickBooks, Peachtree and other accounting products and export that
same data directly into our tax compliance programs. We even offer the ability
to create financial statements and charts-of-accounts in Spanish so you can
better serve the rapidly expanding Hispanic/Latino population.
Regardless of your personal opinion about the changes ahead, it will be vital
to stay ahead of the curve so you can help your clients cope in turbulent and
difficult times. We pledge to do everything we can to help you fulfill that